Philippines' Bases Conversion and Development Authority Signs Joint Venture Agreement for New Clark City Smart Water Utility

The consortium of Prime Water Infrastructure Corporation, Prime Assets Ventures, Inc., (PAVI), MGS Construction, Inc., and Israel's TAHAL Group, a global provider of sustainable infrastructure, today signed a joint venture agreement with the Philippines’ Bases Conversion and Development Authority (BCDA) to deliver next generation smart water and waste water facilities for New Clark City. The Asian Development Bank (ADB) acted as transaction advisor to BCDA on the project.

“By offering state-of-the-art water and wastewater services at competitive rates, we are staying true to BCDA’s promise for New Clark City to become the Philippines’ most attractive destination for residences and businesses, and the action-oriented ethos of President Rodrigo Duterte’s administration,” said BCDA President and Chief Executive Officer Mr. Vivencio Dizon.

“ADB is pleased to deliver a successful outcome for BCDA and support the development of the Philippines’ greenest and smartest city,” said the Head of ADB’s Office of Public–Private Partnership (OPPP) Mr. Yoji Morishita. “The joint venture agreement establishes an innovative framework that equitably balances risks and returns, offering one of the lowest tariffs across the country while ensuring the availability of next generation smart water and wastewater services.”

On 12 November 2018, a consortium comprising Prime Water, PAVI, MGS Construction, and TAHAL Group submitted a bid of 9.45 Philippine pesos (Php) per cubic meter to win the tender. The proposed Php9.45 ($0.18) per cubic meter rate shall apply for the water supply only. The same amount will be charged for wastewater services, resulting in a total tariff of Php18.90 ($0.36) per cubic meter for both services over the first five years of the 30-year joint venture period.

The winning bid for New Clark City is viewed as highly competitive when compared against rates for cities in the Philippines and other parts of Southeast Asia as well as globally, and is expected to attract leading businesses and investors to the city.

New Clark City, located within the Clark Special Economic Zone, is envisioned to become the country’s first smart, green, and sustainable metropolis. Phase 1A, which covers 60 hectares, involves the construction of the National Government Administrative Center, including a world-class sports complex to be used when the Philippines hosts the Southeast Asian Games in 2019.

ADB has been providing advisory services to BCDA since June 2017. The services cover multiple sectors within New Clark City including water, power, gas distribution, and IT infrastructure. ADB’s advisory services are, in turn, supported by the Urban Climate Change Resilience Trust Fund, a multi-donor fund aimed at reducing risks to the urban poor from climate change and natural disasters, through strategic planning of resilient infrastructure.
ADB has long supported PPPs and, in 2014, established the OPPP to provide independent transactional advice and develop broader PPP knowledge and expertise in the region.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.

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