LGU-run water utilities serve 50% of the population in the community. However they have the weakest performance indicators compared to other water service providers such as the water districts and other private service providers. A PPP arrangement is one way of improving the water service. In the example discussed in volume 3 of this manual, the most appropriate scheme is for a BOT arrangement. In some cases where existing distribution networks are already operated by the LGU, the PPP contract can be limited to water source development and treatment. Below are highlights of the proponent and the LGU's responsibilities.
Private Proponent | |
● Design, finance, build and operate and maintain the facility ● Provide construction warranties and operation performance bond ● Charge fees, rentals and charges not exceeding the amounts proposed in the bid | ● Issue exclusive franchise ● Pass ordinance for cost-based tariffs, non-refundable service connection fee and authority for water operator to disconnect service of concessionaires for non-payment of water bill ● Provide right of way for the deep wells, transmission and distribution mains, laterals and service manholes, and site for office building ● Provide termination/buy out payment, if contract is cancelled due to LGU's fault ● Take over facility in case of default by the private proponent |