Aboitiz’ privatization of Iloilo’s water supply stalled

By Rjay Zuriaga Castor

The unsolicited proposal (USP) by Aboitiz InfraCapital Inc., the infrastructure arm of the Aboitiz Group, to privatize the Iloilo Bulk Water Supply Project has hit a snag in the evaluation process.

According to the Public-Private Partnership (PPP) Center website, the USP was endorsed to the city and provincial governments of Iloilo on August 9 this year. The city and provincial governments are the proposed implementing agencies for the project.

However, the USP encountered a setback after the PPP Center received a letter from the city government on August 19, indicating its rejection of the proposal.

City Mayor Jerry Treñas confirmed the rejection to Daily Guardian, stating, “It is under reconsideration. We need time to study it.”

Meanwhile, the PPP Center noted that as of August 22, it has not yet received a decision from the provincial government regarding whether to proceed with the detailed evaluation of the project.

When asked for updates on their recent discussions, Governor Arthur Defensor Jr. said on Thursday that they are still evaluating the firm’s proposal but refused to provide further details.

“It is not ready yet. There is still a confidentiality aspect to it. It’s premature. We have evaluated it,” he said.

“It’s not good to discuss their proposal first because it might lead to a reaction that is not yet warranted. Right now, we are evaluating it, and they have presented it to us,” he added.

Section 54 of the PPP Code stipulates that the provincial government has exceeded the 10-day deadline to submit its decision. However, there is no specific provision detailing what occurs if the deadline lapses.

If the provincial government decides to reject the USP, it is required to submit a written decision with a corresponding justification for the rejection.

The Iloilo Bulk Water Supply Project, covering its construction, operation, and maintenance, will follow a Build-Own-Operate and Build-Lease contractual arrangement.

Under this setup, Aboitiz would sell treated bulk water to the implementing agencies, which would then resell it to water distributors and third-party purchasers.

Valued at P8.45 billion, the water supply project is expected to provide 80 million liters of potable treated water per day to Iloilo over a concession period of 33 years.