City Hall Moves Forward With Aboitiz’s Bulk Water Supply Bid

By Rjay Zuriaga Castor

The Iloilo City Government has approved Aboitiz InfraCapital Inc.’s (AIC) proposal to develop and operate the Iloilo Bulk Water Supply Project, valued at PHP 8.45 billion, after initial concerns led to its rejection four months ago.

Mayor Jerry Treñas confirmed on Thursday, January 16, that the city’s Pre-Qualifications, Bids, and Awards Committee (PBAC) has resolved to accept AIC’s unsolicited proposal (USP).

“I signed a letter confirming to AIC that the PBAC has decided to accept the firm’s proposal,” Treñas said.

Aboitiz InfraCapital, the infrastructure arm of the Aboitiz Group, expressed gratitude for the decision.

“We are grateful for the Iloilo City government’s confidence in our bulk water proposal. Aboitiz InfraCapital is dedicated to collaborating with local government units and other stakeholders to find sustainable solutions to the city’s water challenges,” the firm said in a statement to Daily Guardian.

The proposed project will provide 80 million liters of potable treated water per day to Iloilo under a 33-year Build-Own-Operate (BOO) and Build-Lease (BL) scheme.

Treñas emphasized the importance of securing affordable, high-quality water for the city.

“Water is a fundamental need, and the city remains committed to securing a competitive price and ensuring high-quality water services for every Ilonggo household,” he said, adding that the evaluation of AIC’s proposal was “thorough and transparent.”

Under the Public-Private Partnership (PPP) code, the implementing agency—in this case, the city government—must conduct a detailed evaluation of the USP within 90 days.

If the proposal is deemed viable, negotiations between AIC and the city will commence, lasting between 30 to 80 days, with a possible extension of up to 150 days.

Successful negotiations will grant AIC Original Proponent Status (OPS), valid for one year. This will lead to a Swiss Challenge, allowing other bidders to match or surpass AIC’s offer to ensure transparency and competitiveness.

The Swiss Challenge also ensures that the best proposal is selected and prevents monopolistic practices.

“We thank Aboitiz InfraCapital for their proposal and reaffirm our commitment to fairness, sustainability, and progress. The Iloilo City Government will always prioritize the welfare of our people in every decision,” Treñas said.

The city government initially rejected AIC’s proposal in August 2024. At the time, Treñas said the project was “under reconsideration” as the city needed more time to study the proposal.

In September, Treñas said the BOO and BL contractual agreements proposed by the AIC were unfamiliar to the city government, making the deal “complicated.”

Under the proposed scheme, the city and provincial governments will purchase treated water from AIC and resell it to distributors, a new and challenging approach for the city.

Treñas previously expressed concerns that this setup could result in higher consumer water rates due to dual charges—from the city government and distributors.

Despite initial reservations, the mayor reassured residents of the city’s commitment to fairness and sustainability.