Unbundling

Unbundling is the reverse of bundling. In this case, non-viable business elements are split off from the concession to improve the viability of the remaining elements. For example rather than require a water supply BOT including source development and treatment, transmission and distribution, the source development can be unbundled from the distribution business. Hence from the point of view of the private developer the project is now structured as a single-user rather than a multiple user project, which can be supported by a guaranteed off-take agreement with the LGU. Or in the case of solid waste management projects, the private sector can take care of the landfill construction and operation, and will charge the LGU a tipping fee for disposal. The LGU can take care of garbage collection and will in turn charge fees to households.