Metro Manila's 2019 water crisis: Of efficiency traps and dry taps

Abstract

AbstractIn 2019, Metro Manila experienced a water supply crisis, barely 2 years after the government and its private concessionaires were given international recognition for a successful water privatization, with success defined in terms of high operating efficiencies and improved service levels. These service‐level improvements, however, brought about a surge in consumer demand, which necessitated the construction of a new water supply infrastructure. Regulatory failures resulting in nondelivery of the infrastructure effectively negated and trapped the efficiency gains that were built slowly over the years, at a cost of US$5.4 billion. Such failures resulted in public indignation over dry household taps, as well as a presidential anger that threatened to cancel the program in its entirety. Using the lessons learned from this crisis, the paper enumerates measures to help unlock the traps set by these regulatory failures.