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Water Champion: Elsa Mejia on Operating as a Small-Scale Private Water Provider

Water Champion: Elsa Mejia on Operating as a Small-Scale Private Water Provider

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Published by adbwaterforall
Water Champion: Elsa Mejia on Operating as a Small-Scale Private Water Provider
Water Champion: Elsa Mejia on Operating as a Small-Scale Private Water Provider

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Published by: adbwaterforall on Dec 03, 2012
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02/18/2014

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Water Champions initiate or implement water reforms in their chosen field, and are directly involved inimproving the water situation in their respective countries.
Water ChampionElsa Mejia: Operating as a Small-Scale Private Water Provider
June 2008
Web Writer 
ABOUT THE CHAMPION
Elsa D. Mejia is General Manager of the Inpart Waterworks and Development Company (IWADCO), a family enterprise that started as asmall construction company specializing in the production of water tanks for small towns and municipalities in and around Metro Manila.During the 1990s, IWADCO (then known as Inpart Engineering) invested US$350,000 over a 5-year period in low-income communities.Raising this amount, which enabled IWADCO to deliver water to 125,000 people either through piped connections or hose connectionsfrom storage tanks, wasn’t easy.At the onset of the Metropolitan Waterworks and Sewerage System privatization in 1997, IWADCO started water service delivery toconsumers not yet reached by the big Metro Manila concessionaires—Maynilad Water Services, Inc. and Manila Water Company, Inc. Ms. Mejia realized thegreat opportunity this market offered to her company so she approached commercial banks for loans. Unfortunately, IWADCO failed to convince them thatselling water in poor districts is a bankable enterprise, even if it already had more than 25,000 customers and good commercial indicators.With very few options available to it, IWADCO borrowed money from relatives and other nonbank lenders, often at usurious rates of 5%-15% interest permonth, to raise up to US$100,000 for a small piped water supply system. Elsa took this risk knowing that IWADCO can recover its costs and even earnprofits because people were willing to pay for water. With its US$100,000 investment (around US$30-40 per household), IWADCO sold 30,000 cubic meters(m3) of water in a month, serving over 3,000 households.Since then, governments have shown increasing interest in partnering with small enterprises for water supply provision. With its extensive experience,IWADCO stands out as one of the most viable and trustworthy partners in the water sector. In August 2007, Elsa became president of the National Waterand Sanitation Association of the Philippines (NAWASA), a new organization of SSPWPs in the country.
 
How can small entrepreneurs help improve the country’surban water sector?
Small-scale private waterproviders (SSPWPs) like usdeliver water to pockets of poorcommunities in the countryunserved by the bigger waterutilities. When combined, thesesmall efforts become asignificant contribution.In the Philippines, it’s onlyrecently that we got theattention of the water sector. I think this is an exciting development—I’m hoping it means that better support services, increasedfinancing, and responsive regulation that we have been lobbying forare forthcoming.As for IWADCO, we’ve been working closely with other waterproviders, utilities, national and local governments, hoping that thiscould facilitate more private sector engagement in the sector.
What are your toughest challenges as a private waterprovider?
In the mid-1990s, when IWADCO was still Inpart Engineering, theneighboring village where some of our employees lived haddifficulties accessing safe, drinking water. So we decided not only tohelp our employees get water, but also to work with them in bringingwater to the community. This marked the beginning of our waterservice business.Our operations hinge on the partnerships we forge with communitiesand local governments. So changes in leadership are always difficulttimes for us—there is always the risk that the new leaders will affectour original agreements.Fortunately, because we work directly with, and provide employmentfor, the poorest segments of the communities, we earn their trustand support. This, somehow, minimizes the risks involved inchanging leaderships. 
How does IWADCO maintain good working relationships withlocal governments and customer communities?
I think it’s because we have alot to offer them.We usually aim for amanagement contract, buildingon whatever water supplysystem is already in place. Weoffer to operate, improve, andexpand it at no cost to them.And they also get a share in thegross income of the project.Local governments and customers also appreciate our flexibility interms of payments, which are chiefly based on consumption. We donot charge connection fees. We work with them to define water ratesand, from there, decide on the billing systems—whether daily,weekly, or bi-monthly depending on customer income flows.We also have an effective feedback mechanism. Our customers givefeedback on a daily basis through the water tenders and thecommunity officials. They can also provide feedback through textmessaging. They help us protect the pipes by reporting leakages,which keeps our nonrevenue water to a minimum.
How does the tariff compare with other providers likeMaynilad and Manila Water?
Of course, our rates are more expensive than Maynilad’s or ManilaWater’s. That’s mainly because they treat us as commercial buyers of bulk water (since we use this for business). Our pass-on rate tocustomers includes costs and a percentage that goes to the watertenders and the community or local government. Despite the higherprice, though, our customers still generally appreciate our projectsbecause they don’t have to pay for service connection fees. 

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