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Pilot and Demonstration Activities
Rationalizing Tariff for Private Water Utilities Under NWRB

This PDA introduced policy reforms to the Philippines' National Water Resources Board (NWRB)—the country's apex body. NWRB's economic regulation functions were enhanced as the PDA provided capacity building activities for NWRB officials and staff, and improved the delivery of water supply services.

 
PDA SNAPSHOT
Project Site Philippines
Cost Estimate $50,000
Status Completed
Approval Date 2004/01/20
Completion Date 31 March 2005
Category Urban Services
Type Policy Reforms
Proponents

Almud Weitz, India Resident Mission
Rudolf Frauendorfer, Southeast Asia Department

Partner National Water Resources Board
BACKGROUND

The National Water Resources Board (NWRB) is the government coordinating agency for all water resources development activities. Its jurisdictional powers, functions and duties include the

  • supervision and control of all waterworks utilities, and their franchises and other properties
  • regulation and setting of water rates to be charged by waterworks operators

NWRB's responsibility for tariff regulation recently expanded to include water districts, LGU run water systems, and private water utility operators except those covered by special concession and joint venture agreements. Private water utility operators essentially refer to water operators in subdivisions1 that are required to secure a Certificate of Public Convenience (CPC)/Certificate of Public Convenience and Necessity (CPCN)2 from NWRB as well as approval of their respective water tariffs prior to operating their respective water systems.

Given its extensive mandate, NWRB requires enhancement of its capabilities, particularly in the areas of tariff setting and review activities, especially for private water utility operators, monitoring of financial performance of water operators, and economic regulation.

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OBJECTIVES

General

Improve the delivery of water supply services, particularly to poor communities, and to enhance economic governance consistent with ADB's country strategy.

Specific

  • Review and identify issues relating to the current regulatory arrangement, particularly the tariff setting and supervision and monitoring by the NWRB of subdivision water operators

  • Identify ways to improve the NWRB rate setting methodology and prepare guidelines on tariff setting

  • Identify ways to enhance governance through transparency/ accountability in the performance monitoring system for subdivision water operators

  • Encourage stakeholder participation in problem analysis and formulation of recommendations

  • Introduce institutional reforms in order to strengthen the capacity of NWRB as the economic regulator in the water sector

  • Assess various institutional options, determine preferred options and develop appropriate proposals for implementable arrangements

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EXPECTED RESULTS
  Outputs     Outcomes     Impacts  

  • Revised guidelines for rationalizing water fees for subdivisions / waterwork systems and for performance monitoring
  • 4 stakeholder consultation workshops
  • At least 10 workshops and seminars, as well as skills development programs and related training materials
  • Progress reports (Inception Report, Midterm Report and Final Report)

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REPORT CARD

This PDA was completed on 20 January 2004. Read the Final Report [PDF].

  Achievements     Recommendations  

This PDA
  • Involved clients and other water sector stakeholders in the consultations, including water utilities and consumers, several of whom proposed solutions and recommendations to improving NWRB’s tariff setting methodology
  • Served as an eye-opener for the NWRB
  • Resulted in a new tariff system that was acceptable to all stakeholders, and in increasing NWRB’s client base
  • Compiled and documented the training modules, consultation guidelines, and design methodologies and processes used in the activity, ready for dissemination and possible replication in other water regulatory bodies in the region

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REPORTS AND RELATED DOCUMENTS


_________________

  1. Subdivisions also include condominiums, townhomes and compounds
  2. Certificate of Public Convenience (CPC) is a formal written authority issued by NWRB to a qualified applicant upon notice and hearing authorizing him to operate and maintain a waterworks supply service and for which a franchise is not required by law. Certificate of Public Convenience and Necessity (CPCN) is essentially the same as CPC, with the difference that a certificate of public convenience and necessity is issued to an applicant for the operation of a public service for which a franchise is required by law.