Revisiting Successful Public Private Partnership （PPP） Business in Asia

the Case of Water Concession in Metro Manila in the Philippines

抄録

Both public and private sectors have high expectations for PPP (Public-Private Partnership) infrastructure businesses in Asia. However, successful PPP projects are not necessarily abundant. Under such circumstances, the water concession project in Metro Manila in 1997 was the largest in the world at the time. This PPP project is recognized internationally as a successful case of PPP for the improvement of water distribution coverage and quality of water services. On the other hand, more than 20 years after the concession agreements were signed, there are several issues in the project. In December 2019, the permanent court of arbitration in Singapore ordered the Philippine government to pay Manila Water Company, Inc. 7.4 billion peso (about USD 148 million) to recoup foregone revenues from rate increases that were rejected by the Philippines government. In response, President Duterte ordered the filing of criminal charges against the two water private utilities in Metro Manila and demanded new contracts to replace “onerous and disadvantageous” contracts. Another issue is water “crisis” in Metro Manila. The problem even introduced water supply rationing mainly in the dry season in recent years. This paper analyzes the current situation and issues of the Metro Manila Water Concession Project, which is one of notable PPP projects in the early years of PPP in Asia in 1990s. The paper aims to draw lessons for future PPP infrastructure business in Asia based on the case of Metro Manila Water Concession Project. The paper argues that regulatory function is the key for the sustainable delivery of PPP. The importance of regulator which is independent and competent in implementing PPP infrastructure business is the important lesson for other PPP infrastructure business in Asia.