Cavité Water/Wastewater Treatment Privatization, Philippines

  • For the U.S. Trade and Development Agency and Operations Management International, K&M undertook key assignments in the economic and financial analysis of the Province of Cavité, Philippines’privatization of its water and waste water systems. This included:
  • Development of a project financing model that calculates required tariffs at indicative Internal Rates of Return (IRR) to meet private debt and equity financing criteria.
  • Development of a project affordability model that allows for sensitivity analysis of the tariff affordability among different user groups, and, in particular, evaluates the ability of low income domestic water users to pay this tariff.

  • Surveyed usage pattern for treated water and wastewater among domestic, commercial, institutional and industrial user groups.
  • Prepared projections on supply and demand for the aforementioned user groups.
  • Analyzed per capita income and household income within the user group.
  • Reviewed ongoing privatization of the Manila Water Supply and Sewerage Authority, and its implications for the proposed privatization in Cavité Province.
  • Identified key legal, financial, and regulatory issues for implementing a bulk water supply project, a full concession to manage the water/wastewater system, or an Operations and Management (O&M) contract.
  • Preparation of an action plan and strategy for project implementation.