Ex-post Evaluation

1. Outline of the Project

Country:

Philippines

Project title:

The Project for the Rehabilitation of the Balara Water Treatment Plant

Issue/Sector:

Water Supply

Cooperation Scheme:

Grant Aid

Division in Charge:

Grant Aid Management Department

Total Cost:

3,543 million yen

Period of Cooperation

FY 1994-1995

Partner Country’s Implementing Organization:

Department of Public Works, Manila Metropolitan Waterworks and Sewerage system, Manila Water Company

Supporting Organization in Japan:

Related Cooperation:

1-1 Background of the Project

Various efforts had been made to increase the water supply from major water treatment plants including the Balara Water Treatment Plant, aiming to solve the water shortage and insufficient water production in the Philippines. However the budgetary constraints caused the facilities/equipment to deteriorate and resulted in inadequate water purification and urgent actions had to be taken.

Under these circumstances, the government of the Philippines requested a Grant Aid Project rehabilitation of the Balara Water Treatment Plants for the government of Japan, aiming to improve the quality of water and supplying potable quality water to the residents in the Metro Manila and its surrounding areas.

1-2 Project Overview

The Grant Aid Project aimed to rehabilitate the facilities and equipment at Balara Water Treatment Plant in order to supply safe and potable water to the residents in the Metro Manila Area.

(1) Overall Goal
1) To contribute to development of industrial sector in Metro Manila Area.
2) To improve the living and health conditions of the residents of Metro Manila Area.

(2) Project Purpose
1) To improve the treated water quality in order to meet the National Drinking Water Standards.
2) To restore facilities and equipment of the plant to its design capacity.

(3) Outputs
1) Rehabilitation of the plant’s facilities and equipment.
2) Replacement of deteriorated facilities/equipment.

(4) Inputs

Japanese Side:

131 million yen (Detailed Design, 1993)

1,632 million yen (1994)

1,780 million yen (1995)

Philippine Side:

Others Equipment and materials for construction

2. Evaluation Team

Members of Evaluation Team

Rey Gerona, JICA Philippine Office
Danilo Jaque, Center for Local Development Studies
Edgar Kintanar, Center for Local Development Studies
Nigel Paul Villarete, Center for Local Development Studies
Josie Ilao, Center for Local Development Studies

Period of Evaluation

December 13, 2002 – March 12, 2003

Type of Evaluation:

Ex-post Evaluation by Overseas Office

3. Results of Evaluation

3-1 Summary of Evaluation Results

(1) Impact
Residents receiving water from the Balara Water Treatment Plant were able to use the time previously spent fetching water on other activities once they received water from the plant. Moreover, it is cheaper to receive water through a connection to water supply system of the Balara Water Treatment Plant than to fetch or buy water from water-can sellers (the average amount spent per month on fetching or buying water was 800 pesos, while the average monthly water bills were only 114 pesos). This allowed residents to save from 500 to 1,000 pesos a month.

A comparison of statistics for 1997 and 1999 demonstrates that the number of those suffering from water-borne diseases in the Manila metropolitan area has fallen. In 1997 there were twenty-four cases of typhoid per population of 100,000, but this fell to five cases in 1999. Similarly, there were 2,221 cases of diarrhea in 1997, but this dropped to 996 in 1999 (according to data from the Department of Health). In a survey given to 171 people, 50% responded that sanitary conditions had improved. However, water-borne infectious diseases are not caused only by drinking water--there may be many cases in which people are infected through food poisoning and food contamination. Therefore it should be noted that the adequate supply of potable water cannot be solely attributed to the decrease in water-borne infectious diseases or improvements in water quality.

With water supply to industrial sectors, it was also difficult to quantify the extent of contribution from the rehabilitation of the water plant to industrial development, because the Manila Water Company (MWC) only supplies water to a small proportion of the industrial sector, accounting for only 10% of the total water supplied, and companies often have their own water supply facilities.

(2) Sustainability
MWC surveys the contamination rate (the probability of discovering Bacillus coli) in a sample survey of drinking water from customers’ taps, and these studies show that the contamination rate was 9.0% when the project finished, but dropped to 0.4% in 2000, and the quality of the water from Balara Water Treatment Plant has improved since 1997. The quality of water also meets the Philippine National Standards for Drinking Water (PNSDW), which is set at 5%.

(2001 MWC Annual Report)

Except in 1998, when the Philippines was subjected to a drought caused by the El Nino phenomenon, the Balara Water Treatment Plant has maintained its water production of 1.6 million cubic meters per day. Since 1998, MWC has expanded the serviced area and increased its serviced population from 70% in 1997 to 90 % in 2002 with 24-hour uninterrupted water service.

The maintenance and operation unit of the Metropolitan Waterworks and Sewerage System (MWSS) was privatized in 1997 and its service region was divided into two. Manila Water Company (MWC) holds the concession for the east zone, and is responsible for the waterworks operations there (MWC has jurisdiction over the Balara Water Treatment Plant repaired in the project). After privatization, the MWSS mission was changed to focus on monitoring waterworks and the waterworks system in the Manila metropolitan area where the water supply system was established was centered around MWSS. The MWC has support, mainly on policy by MWSS.

Privatization made MWC independent financially, and it generates the revenue from its own waterworks business. After 1997, when it started operations as a concessionaire, MWC strived to reduce non-revenue water, which is water supplied from the water treatment plant that leaks or is stolen so that fees cannot be collected and finances have been stabilized at the time of ex-post evaluation. Since 1997, 21-27% of its annual revenue has been spent on maintenance costs for water facilities. However, the potential problem for MWC is the spare parts that need to be imported from overseas, due to the considerable time it takes to obtain them. Therefore, there are concerns that the efficiency of operations might fall while MWC is waiting for the parts to arrive.

Although MWC cut the number of employees in 1997, MWC increased salaries and succeeded in improving the retention rate. To keep the morale of the employees at high levels and motivate the staff, MWC launched an employee award system that selects “outstanding employees” monthly and introduced a Stock Option Plan program for employees. MWC strives to improve the technical level of its staff, and improve operations and management efficiency at its water treatment plants. In addition to training, MWC has adopted a staff rotation system that allows each employee to experience various types of maintenance works and educate them comprehensibly. These staff training policies are one reason behind the continuation of stable water supply after the project was completed.

3-2 Factors that promoted realization of effects

(1) Factors Concerning the Planning N/A

(2) Factors Concerning the Implementation Process
Privatization of the operation and maintenance unit of water services made its management more efficient, which brought about the impacts of the project. MWC has carried out the strategic water business emphasizing the operation and management at the water treatment plant, staff training and prioritizing its business, and it helps to stabilize water supply and finances. Moreover, MWC kept up its cooperative relationship with MWSS even after privatization and built up an organizational structure, which ensured that services ran smoothly.

3-3 Factors that impeded realization of effects

(1) Factors Concerning the Planning N/A

(2) Factors Concerning the Implementation Process
Non-revenue water is still a major concern for MWC, it is important to clamp down on illegal water intake to expand the service.

3-4 Conclusion

The project brought benefits to residents within the MWC service region and has also ensured its own sustainability. The next issues for MWC will be to reduce non-revenue water in order to ensure more stable finances and increase the volume of water to keep up with the rising demand sparked by population growth.

3-5 Recommendations

(1) Securing a water source is of key importance to running a stable water supply. There is no problem on the water source at the moment, but it is recommended that MWC continue to secure good water sources. MWC is planting trees to protect watersheds, and this work is expected to continue with funds regularly allocated. MWC may also consider working in collaboration with regional governments and NGOs to promote this work.

(2) Since maintaining water treatment technology is so important to ensure water quality, MWC is expected to continue actively to train staff.

3-6 Lessons Learned

N/A

3-7 Follow-up Situation

N/A