Tuesday, 9 February 2010

Manila Water in joint venture to supply water to Indian states

J. B. F. Santos

EAST ZONE water concessionaire Manila Water Co., Inc. has entered into a partnership with an Indian company to provide water services in a number of states in India.

In a disclosure, Manila Water said it had signed a joint venture agreement with Jindal Water Infrastructure Ltd. “which [embodies] their commitments to jointly develop new business in the field of water supply, wastewater and other environmental services in the states of [Rajasthan], Gujarat and [Maharashtra] in India.”

The two companies will form a joint venture, the disclosure said. Key officers of both parties will compose the joint venture company’s management and project team “where business development initiatives shall be carried out through a pre-agreed development project.”

“Though this partnership, Manila Water and [Jindal Water] seek to leverage on their key strengths and core competencies and eventually provide synergies in establishing a regional presence in India,” Manila Water said.

Jindal Water is part of the O.P. Jindal Group in India, a $10-billion business conglomerate.

Manila Water officials did not return calls for further details on the project.

The utility has been aggressive in its expansion plans, although it withdrew from a bidding for bulk water services in Iloilo last December as “conditions the company requires for such investment were not present.”

In September 2009, the Cebu provincial government accepted a joint venture proposal by Manila Water for a bulk water supply project.

Manila Water also completed the acquisition of AAA Water Corp. that month. AAA Water owns 70% of Laguna AAA Water Corp., a joint venture with the province of Laguna which has a 25-year concession for water supply services to Sta. Rosa and the towns of Biñan and Cabuyao in Laguna.

Manila Water also has a joint venture deal with the government to run the water utility in Boracay, one of the country’s top tourist destinations.

Manila Water provides water and wastewater services to nearly six million people in 23 cities and municipalities covering the east zone concession of Metro Manila, which includes Pasig, Mandaluyong, Marikina, Taguig, Pateros, and parts of Manila and Quezon City.

The publicly listed utility secured last year regulatory approval to extend by 15 years its east zone concession to 2037.

Profits of Manila Water grew by 14% in the third quarter of 2009 to P2.3 billion from P1.99 billion on account of higher revenues.

Shares in Manila Water declined by 1.61% to P15.25 apiece yesterday.

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