Description

Introduction

This report presents the findings, lessons, and recommendations of an independent assessment of more than three decades of partnership experience between ADB and the development of water supply services in Metro Manila.

The special evaluation study assesses the relevance of ADB's strategies to government priorities for development of Manila's water supply and sanitation, the relevance of project designs, the effectiveness and efficiency of ADB assistance, the sustainability of outputs and outcomes, and impact. It also assesses progress made in private sector participation through water concessionaires and the expected impact of improving water supply on people in Metro Manila. For project level performance assessment, the evaluation examined the three recently completed projects, based largely on their project completion reports:

• the Angat Water Supply Optimization Project,
• the Manila South Water Distribution Project, and
• the Umiray-Angat Transbasin Project, based largely on their project completion reports.

Summary of findings

The evaluation found that the value addition of ADB assistance to Manila water services was largely limited to augmenting raw water supply to the Metropolitan Waterworks and Sewerage System water treatment and supply system.

Overall, ADB's assistance to improving water supply services in Metro Manila is assessed as partly successful.

All projects are rated relevant, as they were consistent with the sector challenges and with ADB's and the Government's strategic priorities, and were well coordinated with other development partners. With the exception of the Manila South Project, they were generally effective in achieving their immediate objectives, efficient in resource use, and likely sustainable from the financial and economic perspectives, which was eventually strengthened following upward tariff revision. The Manila South Project experienced a shortage of raw water and did not utilize the full loan amount; hence, it could not meet its immediate objectives.

Lessons

Key lessons identified from experience with implementing water supply projects in the Philippines relate to the need

• for greater attention to demand-side issues in project design
• to reduce the high levels of nonrevenue water as an integral way of responding to rapidly increasing demand
• for water utilities to give priority to adequate maintenance of existing water supply facilities and investment for rehabilitation to reduce nonrevenue over the investment in new assets
• for better readiness for project implementation
• to improve transparency and accountability in preparing concession agreements

Recommendations

This evaluation recommends the following in future operations:

• Given the long partnership with MWSS and the rising demand and widening demand-supply gap for water in Metro Manila, ADB should provide further lending assistance to improve Metro Manila's raw water supply by drawing from known but untapped sources and surveying other possible sources. Additional raw water on a large scale to meet the pressures of the growing metropolis will require significant investment to develop a significant alternative to the Angat Reservoir.
• There is continued potential for an ADB role in developing water distribution services in Metro Manila, particularly in the West Zone. However, given the possibility of alternative, sometimes lower-cost bilateral and multilateral financing sources, ADB will need to package and deliver its assistance more efficiently than before.
• Assist in developing new mechanisms for addressing NRW reduction issues. To address the NRW issue, project design should take into account both demand- and supply-related factors that contribute to NRW.
• Consider providing lending assistance for groundwater-related environmental protection and wastewater management. The sector continues to be faced with problems of indiscriminate extraction of groundwater, and pollution from municipal and industrial wastewater. Further support for these areas should be assessed.

Contents

• Executive Summary
• Map
• I. Introduction
• II. Water Services Sector in Metro Manila
• III. ADB’s Strategy and Assistance Program
• IV. Performance Assessment of ADB Assistance
• V. Assessment of Private Sector Participation Impact
• Vi. Conclusions, Lessons, and Recommendations
• Appendixes