Philippines - Metropolitan Manila Water Distribution Project

Documeni of The World Bank FOR OFFICIAL I SE ONLY Repurt No. P-4169-PH a REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$69 MILLION TO THE REPUBLIC OF THE PHILIPPINES FOR A METROPOLITAN MANILA WATER DISTRIBUTION PROJECT March 19, 1986 This document has a restricted di%tribution and may be used bs recipients only in the perf.mrmance of their official duties. Its contents may not otherwise be disclosed without Uorld Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Pesos P 1 US$0.0535 P 18.7 = US$1.00 (as of February 11, 1986) FISCAL YEAR January 1 to December 31 WEIGHTS AND MEASURES cu m = cubic meter (1,000 Liters or 264 US gallons) ha = hectare (2.47 acres) km = kilometer (0.62 miles) 1 = liter (0.26 US gallons) 1/cd = liter per capita per day (0.26 US glcd) m = meter (3.ZS foot) MI/d = million liters per day (264,172 US g/d) PRINCIPAL ABBREVIATIONS AND ACRONYMS USED ADB Asian Development Bank IDC = Interest During Construction LWUA = Local Water UtiLities Administration MLG = Ministry of Local Government MOH = Ministry of Health MPWH = Ministry of PubLic Works and Highways MWS II = Second Manila Water Supply Project MWS III Third Manila Water Supply Project MWSS = Metropolitan Waterworks and Sewerage System RWDC = Rural Waterworks Development Corporation RWSA Rural Water Supply and Sanitation Association USAID = United States Agency for InternationaL Development WD Water District  FOR OMCIAL USE ONLY PHILIPPINES METROPOLITAN MANILA WATER DISTRIBUTION PROJECT Loan and Project Summary Borrower Republic of the Philippines Beneficiary: Metropoiitan Waterworks and Sewetage System (MWSS) Amount: US$69 million equivalent Terms: Repayable in 20 years, including 5 years of grace, at the standardi variable rate. Relending Terms: Government would relend the entire loan proceeds to M1SS on the same terms and conditions as the Bank loan under a Subsidiary Loan Agreement acceptable to the Bank. MWSS would carry the foreign exchange risk. Project Description: The proposed project would assist MWSS to optimize the utilization of existing infrastructure and thus make signifi- cant improvements in its level of internal cash generation and financial performance. It would also assist MWSS to improve its operational efficiency. Specifically, this would be achieved under the proposed project by improving the water supply in the MWSS service area through: (a) the completion of works commenced under the Second Manila Water Supply Project, including construction of about 3 km of bulk water supply mains, 17 km of primary, secondary and tertiary distribution lines, and installation of about 100,000 service connections; (b) construction of about 8 km of additional bulk water supply mains; (c) construction of additional water distribution works providing water to about 72 existing subdivisions, comprising some 16,000 households; (d) infilling the distribution network in about 24 areas covering about 13,500 households; (e) pro- vision of yard connections and standpipes in about 160 low- income areas to serve about 70,000 households; (f) acquisition of about 100,000 water meters; (g) improvement to the distribution system through the installment of control valves; {h) development of about five deep wells; (i) future project preparation including seismic monitoring system for a future dam site; and (j) institutional support including consulting services, training and provision of motor vehicles and computing facilities. The proposed project would provide water to many unserved low-income areas and directly benefit the urban poor. This documcnt hag * rr distribution and may be umd by rwcipients only in the performance of tbeir offlcd dutiL Its contents myr nototherwise be disclmnd witbout World Bank authrization.  - ii - There are no unusual risks associated with this project. The major challenges to MWSS are to meet the water meter connection and water loss reduction targets. The management and coordina- tion of these activities, which must be regarded as the two most difficult tasks in water supply management, will preoccupy the implementing agency. However, through a recent reorganiza- tion including the strengthening of the upper levels of manage- ment, decentralization of operations, and the continuation of a staff training program, appropriate steps have been taken to minimize risks. Project Costs: Local Foreig Total mlI lion) Water mains - ongoing works 15.8 14.6 30.4 Water mains - new works 1.6 2.7 4.3 Distribution and connections 19.4 9.5 28.9 Technical assistance 1.4 8.0 9.4 Base cost 38.2 34.8 73.0 Physical contingencies 2.8 1.6 4.4 Price contingencies 4.3 3.6 7.9 Total project cost /a 45.3 40.0 85.3 Interest during construction - Bank financed - 8.0 8.0 - Other 3.0 3.0 Total financing required 45.3 51.0 96.3 Financing Plan IBRD 21.0 48.0 69.0 MWSS 24.3 3.0 27.3 Total 45.3 51.0 96.3 Estimated Disbursements: Bank FY 1986 1987 1988 1989 1990 1991