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Pest Analysis on Manila Water

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Submitted By Lcasino
Words 1035
Pages 5
Lyndy Marie T. Casiño
Business Policy

A PEST Analysis on “Manila Water Expanding in Southern Philippines”

Political Not many companies are comfortable in entering long term agreement with local governments whose elected official’s tenure lasts only for three years (unless re-elected, but only up to a maximum of 9 year-stay in office ) due to changes that can be incurred in terms of governance and contract management. In fact in 2000, Manila Water initially negotiated with Metro Cebu Water District, a state-owned utility but failed due to disagreements before negotiations with the local government commenced (1).

The Cebu bulk water project is a Build-Operate-Transfer (BOT) project. Under the law, one of the most important conditions needed to be met for BOT projects is that it has to undertake the price or “Swiss” challenge. Manila Water in September 2009 declared its unsolicited proposal for the project to be subjected to “Swiss” challenge before approval or acceptance of partnership from Cebu Provincial Government (2). After the bidding process, in 2012, Manila Water successfully bagged the P700M project.

Partnership of Manila Water Consortium and Cebu Provincial Government to provide water service to Cebuanos is one of Pres. Noynoy Aquino’s goals in his Public-Private Partnership (PPP) program. This partnership has been duly supported by the administration.

Economic

With the strategic location of Cebu, it has been a favourite destination of tourists and investors since Philippine history began to be known. Among the provinces in the Southern Philippines, Cebu has always been the leader in economic growth, population and technology. But decades of negligible investments in water supply has left residents unsatisfied with the waters services they received. In a study in 1998 by David and colleague entitled Water in Metro Cebu: The Case for

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