MWSS Privatization: Implications on the Price of Water, the Poor and the Environment

Although MWSS has the responsibility for providing urban water and sewerage services in Metro Manila, actual service coverage has been low particularly for sewerage and quality of service has been poor despite subsidies from the national government. This paper examines the impact of the recent MWSS privatization on the coverage and quality of water and sanitation services and ultimately on the groundwater levels, water pollution, human health, and welfare of the poor. Analysis of the performance targets and other provisions of the MWSS concession agreement together with revised projections of water demand indicates that a significant share of water supply will have to be met through groundwater pumping by individual households, commercial, and industrial establishments and by private water markets. Moreover, the exception of a significant number of households who already have tap water from own sources, private water markets, as well as industrial and commercial establishments from the performance targets on sewerage coverage suggests that water pollution may not be adequately addressed. This study foresees that without some adjustments in the concession agreement with the private water concessionaires and acceleration of water supply expansion projects, specifically the Laiban Dam project, the water shortage problem will persist and the poor will continue to pay much higher price for water as they are rationed out of the low-priced MWSS water. The progressive water price structure itself for MWSS water also ends up having regressive effects as the poorer households have to rely on shared water connection or public faucets and thereby pay higher water prices.