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Philippines: Winners in Public-Private Partnerships

  • For generations, residents of Sta. Cruz, Davao del Sur suffered from an acute shortage of potable water and sanitation services.
  • Since 2007, residents in the urban areas started enjoying safe, reliable, and 24-hour water supply since the local government started tapping private sector expertise in the construction, maintenance, and management of the water system.
  • Since then, Sta. Cruz has attracted more investments, boosting the town’s efforts to address poverty.

Davao del Sur, Philippines, December 29, 2009—There’s no reason why residents of this seaside town should worry about the availability of drinking water. About six kilometers from the town center are springs of cool, fresh water. But for generations, most residents have been suffering from want of potable water amid that abundant supply. Talk about going thirsty when there’s water all around.

It’s only after the local government started tapping private sector expertise in water supply when the town got adequate, reliable, and clean water flowing through the taps. “That was in April 2007,” recalls Vizminda Panocho, 39, resident of Barangay Bato in Sta. Cruz, and a factory worker, recalling the time when water supply got to their seaside village. “We were so happy!

Residents of the village used to stay up until midnight to collect water rationed by the local government through a community faucet. The rush to get buckets lined up at the faucet started as early as lunchtime even though water started flowing only in the evening. Hiring someone to watch buckets at four pesos per container to make sure these are not bumped off the line by cheats was common.

Our lives were so miserable then,” said Vizminda.

Mayor Joel Ray Lopez explained that the town’s old water system was more than 50 years old. Collecting payments proved to be difficult for the local government, but finding money to subsidize its operations and maintenance was even more so. "When you are a politician, it’s so hard to say no to a constituent who asks for a deferment of payment of water bills", says Mayor Lopez.

Thus, the water system had pipes that leaked, water pressure that was too low, and intermittent supply to a thousand households who were connected. More importantly, the local government did not have money and technical expertise to make sure the water was regularly treated. Many residents were forced to construct private wells, buy expensive water from water vendors, or purchase costly bottled water.

The old system perennially tested positive for bacteria and coliform,” said Aidilita Aguilar, Sta. Cruz’s sanitary inspector. “Now, with the new water system, things have really changed for the better, quantitatively and qualitatively.

She explained that the new system covers close to 2,600 households in the town center and surrounding villages from only about a thousand in 2005. The new system is also equipped with a water treatment facility to ensure that water flowing through the tap 24 hours a day is clean.

Mayor Lopez said that it was in 2005 when the local government decided to tap the expertise of the private sector in rehabilitating and managing the town’s water system. Financed by a P40-million loan from the Development Bank of the Philippine’s (DBP) LGU Urban Water and Sanitation Project supported by the World Bank, the local government bid out the lease to the private sector to ensure efficient and reliable service.

The LGU Urban Water and Sanitation Project aims to support local government in providing safe, reliable, and sustainable water supply and sanitation services in urban areas of the country.

Having experienced a reliable and round-the-clock water supply delivered through their taps, residents’ attitude quickly changed. “People are the ones coming to the office to pay their bills regularly,” observed Mr. Simplicio Belisario, president and chief executive officer of SIG Construction and Industrial Corporation, the private sector concessionaire who won the bid to construct, rehabilitate, and manage Sta. Cruz’s water system. “There was no need to hire water bill collectors.

It’s really good that we got this project through because now we [the LGU] don’t have to suffer the headache of managing it day to day,” said Mayor Lopez. “Now we could focus our energy and resources on other urgent matters. It’s like having a thorn in our flesh removed.

The mayor also noticed that the much-improved water supply system has other unintended effects. Sta. Cruz, he said, has started to attract investments. Since 2007, several private companies producing banana chips came in, thus boosting its industry sector. Since the last few decades, Sta. Cruz has been home to various companies producing coconut-based products, sugar, poultry, industrial gases, plastics packaging, hogs, durian, and hand-woven textile.

Partnership between the local government and the private sector in water is a good policy,” said Mayor Lopez.


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