1. IPN – Israel Water Week Improving the Water Service: The Case for Replicating Manila in Mexico Gerardo Angeles Castro Economic Development Network - IPN Mexico City 17 th to 19 th September, 2014

2. Discussion in the relevant literature Impact of ownership on water utilities’ performance Da Silva et al. (2008), Le Lannier and Porcher (2013), Correia and Marques (2011), Braadbart (2002), Competition Estache and Rossi (2002) Use of scale economies Zschille and Walter (2012), Pozzoli et al. (2014)

3. Approaches to water management Supply-Oriented Provision of essential resources to as many people as possible Infrastructure, maintenance, technology, Demand-Oriented Supply, sustainability, quality, efficiency United Nations (1992), Sosa-Rodríguez (2010) Integrated Water Resource Management (IWRM) Supply, demand, middle and long-term planning, targets

4. Maynilad, Manila, Philippines Philippines’ largest water provider, Oldest in Asia (136 years), privatised in 1997, managed by MPIC and DMCI since 2007 Maynilad’s Profile in 2012 KPISituation Population served8.2 million Service coverage95 percent Number of services1.073 million Water treatment plants3 Total Capacity2,500 MLD NRW*43 percent Annual revenue376 MUSD Source: (Dimaano 2013) * NRW = Non-revenue water, the difference between the amount of water put into the distribution system and the amount that is billed to customers.

5. Maynilad’s Non Revenue Water (NRW) Source: (Dimaano 2013)

6. Evolution of Maynilad’s Indicators Source: (Dimaano 2013) KPIUnit200720132013 vs 2007 NRW Percentage points 6639-27 Service coverage Percentage points 819615 Number of services (1000)7001,12961% Coverage 24- hr supply Percentage points 469852 Coverage 7 PSI pressure Percentage points 5310047 Average leak repair run time Days165-11 Billed volume MUSD7781,21556%

7. Maynilad’s Strategies (1) Separation of the network into unique hydraulic systems and district metered areas (DMAs) Integrated meter management: replacement, correction of sizing, selection of quality meters, increase coverage Replacement of pipes, sustained maintenance, disconnection of illegal pipes, pressure management, pressure regulating valves in DMAs, above-ground pressure monitoring points. Between 2008 and 2013: 1090 Kms of pipes were replaced or rehabilitated, 697,000 meters were replaced, 929 pressure reducing valves and 1,198 pressure monitoring points were installed

8. Maynilad’s Strategies (2) Better relations with local customers, local governments and stakeholders Incentive and capacity building program for its staff Full trained and well equipped teams Creation of a data management system

9. Maynilad Before 2008 Old and complex pipe system Large diameter leaking Meter inaccuracies Illegal connections Unreliable water supply Meter tampering, pin hole Source: (Dimaano 2013)

10. Maynilad After 2008 Diagnose and assess NRW Source: (Dimaano 2013) Pipe replacement Above-ground PMP Leak detection laboratory Leak repair control center Fully trained and well equipped Leak detection teams

11. SACMEX, Background Largest water utility in Mexico, it is a de-concentrated entity dependent on the local Ministry of Environment Source Proportion Percentage Transferred water Cutzamala-Lerma system 22 Surface, local sources3 Local groundwater68 Sustainable36 Unsustainable, overexploited32 Water treatment7 Water supply sources in Mexico City Source: Sosa-Rodríguez (2010), World Bank (2013)

12. SACMEX, Recent Evolution (1) KPIUnit20102012 2012 vs 2010 Population served Million8.2968.4421.8% Service coverage Percentage points 98.497.9-0.5 Number of services Millions1.9872.0261.94% Total CapacityL/S34,98835,2550.76% Meter coverage residential Percentage points 63 Meter coverage commercial Percentage points 077 Meter coverage industrial Percentage points 077 NRW Percentage points 41432 Physical efficiency Percentage points 5957-2 Commercial efficiency Percentage points 7861-17 Global efficiency Percentage points 4635-11

13. SACMEX, Recent Evolution (2) KPIUnit20102012 2012 vs 2010 Annual bill Million USD 35960268% Annual revenue Million USD 281.7 368.131% Annual expenses Million USD 733.6 748.42% Annual net profit Million USD -451.9 -380.3-16% Average revenue $/M 3 $MEX3.915.0228.3% Average production cost $/M 3 $MEX10.1910.20 0.01% Water treatment plants Units25

14. Prospects for SACMEX Law of water and hydric sustainability (proposal) 1 Million people on the network Full and high quality coverage by 2018 19 new water treatment plants and renewing 16 more Renewing or substituting 3,115 pipe Km Investment: 0.741 BUSD Integral management of water resources (PGIRH) 2012-2032 Strategies and targets on infrastructure, stakeholders, aquifer recharge, improvement of commercial and financial system, water treatment, mitigation of climate change effects, sustainability, efficiency Concept20122032Change Income MUSD368.1864.7135 % Expenses MUSD466.2436.1-6.5% Investment172.4451.1161%

15. Conclusions Water provides can achieve great transformation in developing countries in a relative short period of time, the case of Maynilad Different owner ship but it shouldn’t make a change Both companies can take advantage of economies of scale SACMEX still faces many challenges But has set middle and long-term planning with clear actions and targets According to the plan it can be transformed in the middle- term as Maynilad But needs to become a decentralised organism to achieve management autonomy and to have control of its resources