Philippines: Water District Development Sector Project

Sovereign Project | 41665-013

Summary

The Project will enable water districts (WDs), corporatized water utilities operating outside Metro Manila, to expand and rehabilitate supply systems and to build pilot sanitation facilities, in order to reduce water-related diseases due to unsafe drinking water and the lack of sanitation facilities. It will also provide capacity development technical assistance to strengthen the sustainability of WDs and promote partnerships between local government units (LGUs) and WDs in septage management.

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Consulting Notices

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Project Name Water District Development Sector Project
Project Number 41665-013
Country Philippines
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
ND
Source of Funding / Amount
Grant: Water District Development Sector Project
Urban Environmental Infrastructure Fund-UFPF Multi US$ 2.00 million
Urban Environmental Infrastructure Fund-UFPF Multi US$ 500,000.00
Loan: Water District Development Sector Project
Ordinary capital resources US$ 60.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Water and other urban infrastructure and services - Urban sanitation - Urban water supply

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Project will enable water districts (WDs), corporatized water utilities operating outside Metro Manila, to expand and rehabilitate supply systems and to build pilot sanitation facilities, in order to reduce water-related diseases due to unsafe drinking water and the lack of sanitation facilities. It will also provide capacity development technical assistance to strengthen the sustainability of WDs and promote partnerships between local government units (LGUs) and WDs in septage management.
Project Rationale and Linkage to Country/Regional Strategy

The government seeks to urgently catalyze urban water supply and sanitation investments to expand access to potable water and to address water resources pollution and overburdened service and infrastructure capacities in many provincial cities and towns. 90% of Metro Manila's 12 million population has access to piped water, while less than half of the 33 million in provincialother urban areas do. Sanitation remains a big challenge outside Metro Manila where there are no significant sewerage systems and most septic tank effluents are discharged without treatment.

The 1973 Provincial Water Utilities Act (Presidential Decree or PD 198) sought to address grossly inadequate water and sanitation infrastructure by encouraging local government units (LGUs) to form corporatized utilities called water districts (WDs). PD 198 also established LWUA, a government-owned specialized lender mandated by law to oversee the development of water supply systems in the countryside and to support WDs. This water district-specialized lender model has become a working model for other Asian countries.

A WD is a local corporate entity that operates and maintains a water supply system in one or more provincial cities or municipalities. Classified as a government-owned and controlled corporation (GOCC), a WD is run by a five-person Board of Directors appointed by the Mayor or Governor, through a General Manager. LWUA helps the WD develop its system and achieve sustainability, taking local conditions into account. WDs are not subsidized by LGUs and must operate on a cost recovery basis. To ensure affordability, WDs offer a lifeline tariff for poor households, and tariff increases are implemented only after a public hearing. Most WDs provide access to poor households through installment or socialized payment schemes for connection fees. For sustainability, tariffs are socialized, with big commercial/industrial users subsidizing smaller, more numerous, consumers. When a WD defaults on its debt obligations, LWUA can take over management, fully or partially, and assign a sixth Board member.

At the end of 2012, 511 operational WDs were serving more provincial households than other types of water supply providers including LGU-run water utilities, private operators and small barangay/community systems. Private operators mostly target larger and dense franchise areas, while many LGU-run and community systems are small and struggle financially. WDs are GOCCs with a development mandate, with operations ranging in size from 30,000+ service connections to a few hundred. In general, WDs provide better service, according to studies, than LGU-run utilities, because of corporatization and LWUA's financing, training and technical assistance. But chronic underinvestment by WDs has resulted in resource pollution and over-extraction, limited system coverage, and high non-revenue water (NRW) levels. Most WDs have low efficiency and profitability and weak institutional and technical capacity, and are not yet bankable. 60% of operational WDs [305 WDs] are small with less than 3,000 connections and/or a low point-rating score; 271 WDs are non-operational.

At the end of 2012, 511 operational WDs were serving more provincial households than other types of water supply providers including LGU-run water utilities, private operators and small barangay/community systems. Private operators mostly target larger and dense franchise areas, while many LGU-run and community systems are small and struggle financially. WDs are GOCCs with a development mandate, with operations ranging in size from 30,000+ service connections to a few hundred. In general, WDs provide better service, according to studies, than LGU-run utilities, because of corporatization and LWUA's financing, training and technical assistance. But chronic underinvestment by WDs has resulted in resource pollution and over-extraction, limited system coverage, and high non-revenue water (NRW) levels. Most WDs have low efficiency and profitability and weak institutional and technical capacity, and are not yet bankable. 60% of operational WDs [305 WDs] are small with less than 3,000 connections and/or a low point-rating score; 271 WDs are non-operational.

Impact Improved public health and living conditions for the communities outside Metro Manila that participating WDs serve.
Outcome Increased access to safe drinking water and to improved sanitation for the communities outside Metro Manila that participating WDs serve.
Outputs

Extension and improvement of water supply systems; pilot sanitation projects

Capacity and institutional development for participating WDs and LWUA; increased awareness about sanitation.

Geographical Location National
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design A socio-economic survey, including household surveys and focus group discussions, was conducted as part of the preparation of the Project.
During Project Implementation Project implementation will be complemented by further socio-economic surveys as part of the project performance monitoring activities.
Business Opportunities
Consulting Services tbd
Procurement tbd
Responsible ADB Officer Stella Tansengco-Schapero
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Urban Development and Water Division, SERD
Executing Agencies
Local Water Utilities AdministrationKatipunan Road, Balara
Diliman, Quezon City
Philippines
Timetable
Concept Clearance 10 Oct 2007
Fact Finding 17 Dec 2012 to 19 Jun 2013
MRM 08 May 2014
Approval 30 Nov 2015
Last Review Mission -
PDS Creation Date 08 Jun 2010
Last PDS Update 16 Dec 2011

No documents found.

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Water District Development Sector Project: Metro San Fernando (La Union) Water District Resettlement Plan Resettlement Plans Mar 2014
Water District Development Sector Project Environmental Assessment and Review Framework Mar 2014
Water District Development Sector Project Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks Mar 2014
Water District Development Sector Project: Septage Treatment Subproject Initial Environmental Examination Initial Environmental Examination Mar 2014
Water District Development Sector Project: Barangay Paraiso Water Supply System Initial Environmental Examination Initial Environmental Examination Mar 2014
Water District Development Sector Project Resettlement Frameworks Mar 2014

Evaluation Documents

See also: Independent Evaluation

No documents found.


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