JAIME, JOHNRHEY 6/30/19

BS-ENT 2-1

CASE STUDY # 1

MAYNILAD

AN INNOVATOR

I. BRIEF HISTORY
According to my research, it was began with the successful privatization of the
Metropolitan Waterworks and Sewerage System (MWSS) Maynilad Water Services,
Inc.(Maynilad) was formed in 1997. Before then, MWSS was the government
corporation in charge of providing water supply and sewerage disposal services in the
greater Metro Manila area. It was after the consortium of Benpres Holdings Corporation
and Suez Lyonnaise de Eaux was awarded the exclusive right to run the water and
wastewater operations in the West Zone of Metro Manila. Towards its 10th year, after a
string of financial, legal, and regulatory disputes, Maynilad went through a change of
ownership, with the consortium of Metro Pacific Investments Corporation (MPIC) and
DMCI Holdings, Inc. (DMCI) acquiring 83.96% of the water company’s shares.
Lyonnaise Asia Water Limited (LAWL) held a 16% share. The MPIC-DMCI consortium
took over on January 24, 2007, and immediately worked on the financial and
operational rehabilitation of Maynilad. In August of the same year, the consortium
signed a prepayment and settlement agreement with Maynilad’s creditors and MWSS.
By January 2008, the new owners of Maynilad had already paid off the company’s
outstanding debts, which had then reached $240 million. An aggressive catch-up plan
was also implemented to increase company revenue, improve water service operations,
and drastically cut commercial losses. To herald the sweeping transformation that was
about to take place, Maynilad launched its new company logo in November 2008. Since
its re-privatization, Maynilad has spent over P47 billion to improve and expand its water
services. As a result, over 9 million people in Valenzuela City down to Cavite City are
now enjoying safe, reliable water supply. The new logo reflected the new direction and
renewed mission of the company’s management team. Positive change has finally
come to Maynilad. And soon, the results will be felt in all of West Zone.
II. ISSUE ENCOUNTERED/PROBLEM
The Issues encountered of Maynilad mostly is the shortage of the water on
different area. According to my research, The water interruption in parts of Metro Manila
last Friday confused Filipinos on the duration and the scheduled allocations of water
which was announced after. Only Manila Water, which covers the east side or zone of
Manila, announced a water interruption in the areas it covers. According to Jennifer
Rufo (Maynilad Corporate Communications), the west zone of the metropolis will not be
affected with the ongoing El Niño or drought season. Suddenly, some Filipino residents
of these locations aired online that the news or updates of Maynilad were not followed
accordingly. According to Ram On Santiago (Filipino residence) “ Do you read any of
the comments posted Manila Water? You keep posting “updates” but the water
allocation schedule is not adhered to. We haven’t had a single drop from our faucets
since Thursday night ( March 7 ). What is the point of posting water distribution
schedules that are not followed? To make it seem like you’re taking action? It’s very
clear that you’re not. “ Maynilad struggled to meet its service and financial obligations
because of the Asian financial crisis and El Nino phenomenon. These events led to a
string of financial, legal and regulatory disputes between Maynilad and MWSS. It’s
really obvious that many residents from west metropolis is really disappointed from
Maynilad’s services.
III. INNOVATION IMPLEMENTED
According to Jennifer Rufo (Maynilad Corporate Communications), The
turnaround story of Maynilad has been hailed here and abroad as one of the most
dramatic ever accomplished by a company that came from rehabilitation mode. But
what happens after this turnaround—whether the growth momentum will stay strong or
fall flat—is another chapter altogether, one that is just as fraught with difficulties and
uncertainties. The ever-changing business climate, not to mention tectonic shifts in
operational realities, forces Maynilad to rethink old way of doing things and
acknowledge that innovative thinking will allow it to keep growing and stay relevant for
the evolving needs of customers. Indeed, it was innovativeness that made Maynilad’s
turnaround possible in the first place, and it is this same innovativeness that will ensure
it stays on top.There are many teams that contribute to transform the Maynilad to it’s
best. According to Team TLM, Instruments like data loggers and flow meters installed
in Maynilad’s concession area are powered by disposable batteries. These instruments
are being maintained, and batteries are replaced yearly at a cost of about PhP30
million. Massive battery replacements and impractical maintenance cost on data
loggers, flow meters, among other instruments can be reduced through the utilization of
thermoelectric energy. This project aims to efficiently extend battery life based on the
proper analyses of power generation and power consumption of every instrument
installed without affecting data-gathering operations. According to team RMC
Entreprise, The use of RMC-Blocks can serve as improvement and reinforcement to the
current design and construction of several Maynilad projects. Establishment of new
designs for different concrete structures ( anchor/ thrust blocks and concrete
encasement, which are frequently used for pipe-laying projects) will secure the integrity
of the pipe network and limit the occurrence of leaks and other pipe abnormalities. The
use of RMC-Blocks will guarantee operational efficiency, as it will shorten construction
duration and ensure the longevity of underground assets. The culture of innovation in
Maynilad gets stronger year after year. According to TEXTMATIC team, The team aims
to develop a system that will automate the SMS protocols of WSO, Central Control and
Monitoring (CCM), and Putatan Water Treatment Plant (PWTP) on plant and network
status. The SMS protocols inform PWTP and Water Network managers about the
parameters of the different components of the water distribution system which are
essential for decision making on operational changes. With this project, the routine and
time-consuming task of following the SMS protocols can be eliminated, enabling the
officers to allocate more time on monitoring and analysis tasks. The culture of
innovation in Maynilad gets stronger year after year. The 2017 Think Maynilad InnoFest
proves it, as 200 employees submitted a total of 77 entries for consideration in the
annual competition.
IV. ANALYSIS
SERVICES
- They provide to customers with piped-in water supply that meets the Philippine
National Standards for Drinking Water of the Department of Health. This means, their
water is safe and fit for drinking, bathing, cooking, and other household activities. Their
goal is to provide the entire West Zone with 24 hour supply at a minimum pressure of 7
psi ( pounds per square inch ). Maynilad also have the water treatment. Maynilad
maintains and operates three world class water treatment plants. La Mesa Treatment
Plant 1 is a conventional-type plant with a maximum design capacity of 1500 million
liters per day (MLD). It was designed by American company Camp, Dresser and Mckee.
La Mesa Treatment Plant 2 is a pulsator-type plant that has a design capacity of 900
MLD. It was designed by Degrémont, a French company recognized as a world
specialist in water treatment plants. Both treatment plants are ISO 9001:2000-certified
which means that Maynilad’s water treatment process meets global standards for
Quality Management. Putatan Treatment Plant is the largest membrane-based water
treatment plant in the Philippines, and is also the first of its kind in the country to use
large-scale microfiltration and reverse osmosis. All three water treatment facilities
produce water that meets the Philippine National Standards for Drinking Water
(PNSDW) of the Department of Health (DOH). According to my research, Aside from
delivering potable water, Maynilad provides sewerage services to its customers.
Currently, only residents and establishments in Tondo, Sampaloc, South Manila,
Malabon, Navotas, Caloocan, Projects 7 and 8 in Quezon City, Magallanes Village in
Makati and parts of Muntinlupa may connect to Maynilad’s sewerage system. And also,
Customers in areas not covered by Maynilad’s sewerage network dispose of their
wastewater through their own septic tanks or sewerage treatment facilities (for big
commercial and industrial customers). Residential and semi-business customers who
are located outside sewered areas and maintain their own septic tanks may avail of
Maynilad’s septic tank cleaning (desludging).
V. CURRENT SITUATION OF THE COMPANY
The Philippine Atmospheric, Geophysical, and Astronomical Services
Administration (PAGASA) has warned the public of a weak El Niño in 2019, which will
delay the onset of the rainy season and, consequently, affect the water supply situation
in the country. Maynilad is in constant coordination with the National Water Resources
Board (NWRB) and Metropolitan Waterworks and Sewerage System (MWSS) to ensure
that it gets its normal raw water allocation from the Angat Dam—the major source of
raw water for Metro Manila—so it can sustain the water requirements of its customers
despite the weak El Niño. Maynilad has also been continuously enhancing its
operational efficiencies and is implementing infrastructure improvements to prepare for
the impact of El Niño events. Since the last strong El Niño in 2010, the company has
built additional reservoirs to boost water-storage capacity, pumping stations to better
manage supply in the network, and water treatment facilities to increase available water
supply for distribution to its customers. Aside from these, Maynilad also has mitigating
measures in place in case the NWRB will be constrained to reduce Maynilad’s raw
water allocation in an effort to manage water level in Angat Dam. Among these are
water pressure management, prompt repair of pipe leaks, and extension of operating
hours of our pumping stations. The company is also encouraging its customers to do
their part in the water conservation effort through efficient use of water.