WATER DISTRICT DEVELOPMENT SECTOR PROJECT

Transcription

1 FINAL REPORT VOLUME 9: SUPPLEMENTARY APPENDICES A TO G (TECHNICAL ASPECTS) Asian Development Bank LOCAL WATER UTILITIES ADMINISTRATION WATER DISTRICT DEVELOPMENT SECTOR PROJECT Project Preparatory Technical Assistance (PPTA) TA No: PHI PÖYRY IDP CONSULT, INC., PHILIPPINES in association with TEST Consultants Inc., Philippines PÖYRY Environment GmbH, Germany APRIL 2010 PÖYRY IDP CONSULT, INC.

2 This report consists of 12 volumes: Volume 1 Volume 2 Volume 3 Volume 4 Volume 5 Volume 6 Volume 7 Volume 8 Volume 9 Volume 10 Volume 11 Volume 12 Main Report Institutional and Financial Assessment of LWUA Subproject Appraisal Report: Metro La Union Water District Subproject Appraisal Report: Quezon Metro Water District Subproject Appraisal Report: Legazpi City Water District Subproject Appraisal Report: Leyte Metro Water District Subproject Appraisal Report: City of Koronadal Water District Report and Recommendation of the President (RRP) Supplementary Appendices A to G (Technical Aspects) A Review and Assessment of Water Supply and Sanitation Sector Outside Metro Manila B Water Sector Laws and Policies C Assessment of Existing Water Supply Systems in Pilot Water Districts D Proposed Water Supply Component for Pilot Water Districts E Non Revenue Water Contract Mechanisms F Sanitation G Health Supplementary Appendices H to J (Social Aspects) H Socio-economic Survey I Stakeholder Consultation and Participation J Indigenous Peoples Supplementary Appendices K to S (Financial, Implementation Aspects) K Financial Management Assessment L Detailed Project Cost and Financing Plans for Water Districts M Financial Analysis N Financial History of Water Districts O Economic Analysis P Institutional Strengthening and Capacity Building Q Indicators for Measuring Development Objectives and Performance R Terms of Reference for Consultants (Project Implementation Support Services) S Profiles of Priority Water Districts from Long-list Supplementary Appendices T to V (Safeguard Aspects) T U V Initial Environmental Examinations Resettlement Framework Resettlement Plans

3 WATER DISTRICT DEVELOPMENT SECTOR PROJECT PPTA TA NO PHI FINAL REPORT SUPPLEMENTARY APPENDICES A - G A Review and Assessment of Water Supply and Sanitation Sector Outside Metro Manila B Water Sector Laws and Policies C Assessment of Existing Water Supply Systems in Pilot Water Districts D Proposed Water Supply Component for Pilot Water Districts E Non Revenue Water Contract Mechanisms F Sanitation G Health

4 i GLOSSARY AND ACRONYMS ABD ACP AIFC A/R AP APIS ARI AusAID barangay BNA BOT BSP BWSA CAP CBO CCF CCI CDA CDD CFR CFT CI CKWD CLTS COA C&P CPC CSC CSS CY DBL DBO DBM BDP DED DENR DFR DHF DILG DMA DOF DOH DPWH DRA DSA DSCR EA EARF EIA EIRR EMP EO EOCC Asian Development Bank asbestos cement pipe average incremental financial cost accounts receivable affected person annual poverty indicator survey acute respiratory infection Australian Aid village basic needs approach build-operate-transfer basic sanitation package Barangay Water and Sanitation Association community action plan community-based organization community consultation forum cement-line cast iron (pipe) Cooperatives Development Agency community-driven development case fatality rate community facilitator team cast iron (pipe) City of Koronadal Water District community-led total sanitation Commission on Audit consultation and participation certificate of public convenience community sanitation center city sanitation strategy calendar year design-build-lease design-build-operate Department of Budget and Management Development Bank of The Philippines detailed engineering design Department of Environment and Natural Resources draft final report dengue hemorrhage fever Department of Interior and Local Government district metering area Department of Finance Department of Health Department of Public Works and Highways demand responsive approach delineated service area debt service coverage ratio executing agency (LWUA) environmental assessment review framework environmental impact analysis economic internal rate of return environmental management plan executive order economic opportunity cost of capital

5 ii FGD FMAQ forex FS FY GFI GI GIS GOCC GOP GR HDI HH HRD IA IBRD ICC ICG IDAP IDC IDCB IEC IEE IFS IOL IPDP IRA IRR IT IWA JICA KABP KFP LCWD LG LGC LGU LIDAP LIHH LLI LMWD LOI lps LWUA MDFO MDG M&E MFF MIS MLUWD MOU MPA MTPDP focus group discussion financial management assessment questionnaire foreign exchange feasibility study fiscal year (1 January 31 December) government financial institution galvanized iron (pipe) geographic information system government owned and controlled corporation Government of the Republic of the Philippines (i) government regulation, (ii) general record (in legal cases) Human Development Index household human resources development implementing agency International Bank for Reconstruction and Development (World Bank) Investment Coordinating Council (NEDA) internal cash generation institutional development action plan interest during construction institutional development and capacity building information-education-communication initial environmental examination Investment and Financial Services (LWUA) inventory of losses indigenous peoples development plan internal revenue allotment implementing rules and regulations information technology International Water Association Japan International Cooperation Agency knowledge-attitudes-behavior-practices an adaptation of KAP (knowledge, attitudes and practices) Legazpi City Water District local government local government code local government unit local institutional development action plan low income household local level institutions Leyte Metro Water District letter of intent liters per second Local Water Utilities Administration Municipal Development Fund Office Millennium Development Goals monitoring and evaluation Multitranche Financing Facility (ADB) management information system Metro La Union Water District memorandum of understanding Methodology for Participatory Assessments Medium Term Philippine Development Plan

6 iii MTPIP MWSS NAMRIA NAPC NEDA NGA NGO NPV NRW NSCB NSO NSSMP NWRB OCR ODA OGCC OJT O&M PB PD PFI PHAST Php, PhP PIU PMO PMU PNSDW PPMS PPTA PRV PSA psi PSP PWSSR QC QM QMWD RA RIAP RRP RWSA SES SHBC SLA SPAR SSC SCSS SLA SWG SWM TA TB TOR Medium-Term Public Investment Program Metropolitan Waterworks and Sewerage System (Metro Manila) National Mapping and Resources Inventory Authority National Anti Poverty Commission National Economic Development Authority national government agency non-government organization net present value non-revenue water National Statistical Coordination Board National Statistics Office National Sewerage and Septage Management Program National Water Resources Board Ordinary Capital Resources (ADB) official development assistance Office of the Government Corporate Counsel on-the-job training operation and maintenance polybutylene (pipe) presidential decree private funding institution Participatory Hygiene and Sanitation Transformation Philippine peso project implementation unit project management office project management unit Philippine National Standards on Drinking Water project performance monitoring system project preparation technical assistance pressure reducing valve poverty and social assessment pounds per square inch private sector participation Philippine Water Supply Sector Roadmap quality control quality management Quezon Metro Water District republic act revenue improvement action plan report and recommendation of the president (ADB) Rural Waterworks and Sanitation Association socioeconomic survey sanitation and health behavioral change sub-loan agreement subproject appraisal report school sanitation centre simplified community sewerage system subsidiary loan agreement sanitation working group solid waste management technical assistance tubercolosis terms of reference

7 iv TOT UFW UNICEF USAID V VIP WASCO WD WHO WPEP WQ WS WSP WSP-EAP WSS WTP WWTP training-of-trainers unaccounted-for water United Nations Children Fund United States Agency for International Development variation (contract) ventilated improved pit (latrine) Water Supply Coordination Office (NAPC) water district World Health Organization Water Supply and Sanitation Performance Enhancement Project water quality water supply water service provider Water and Sanitation Program East Asia Pacific water and sanitation willingness-to-pay wastewater treatment plant

8 v Location Map Metro La Union WD Quezon Metro WD Legazpi City WD Leyte Metro WD City of Koronadal WD

9 i Supplementary Appendix A REVIEW AND ASSESSMENT OF WATER SUPPLY AND SANITATION SECTOR OUTSIDE METRO MANILA 1 Introduction Institutional Arrangements, and Legal and Regulatory Framework Institutional Arrangements Sector Institutions: Laws and Regulatory Framework The Local Water Utilities Administration (LWUA) National Water Resources Board (NWRB) LGU Operated/ Regulated Waterworks or Water Supply Systems Other Sectoral Agencies Water District Organizational Structure Small and Medium Enterprises Manual Analysis of Water District Organizational Structures/Personnel Water Supply Water Availability Water Supply Service Coverage LWUA and WD Sector Performance Reliability of Supply Water Quality Sanitation Introduction Policies and Strategies LWUA Sanitation Service Coverage Water Related Health and Hygiene Situation and Current Practices Water Sector Financing Needs Sources of Financing WSP Sources of Financing LWUA Sources of Financing Sector Financing Framework Targets Financing Framework Principles LWUA Financing Framework Development Targets Current Financing Framework Initial Financing Framework For LWUA LWUA s Long-Term Viability Second Generation Loans Sector Policies and Development Planning Current Sector Policies Sector Development Planning Sector Issues and Constraints Water Supply Fragmented Institutional Framework Ownership of the Water Districts Constraints in Governance of Water Districts Inadequate Economic Regulatory Framework Financing Issues Inadequate Support to Rural Water Supplies Share of National Wealth Issue Court Decision Ending Exclusivity of WSPs in their Service Areas Sanitation... 46

10 ii Supplementary Appendix A Tables 1 Comparison of MDG and MTPDP Target vs Actual Performance 1 2 Key Water Supply Agencies, Respective Roles and Responsibilities 2 3 Population Served by Level III WSPs 11 4 Water Service Providers, Indicators, Figures, and Sources of Data on Sanitation Coverage 19 6 Sources of Investment/ Capex Funding 24 7 Access to Financing 25 8 LWUA Debt and Equity as of Population Served by Water Supply Providers, as of Current and Projected Population Served Additional Population Served by Water Districts Current Financing Framework vis-à-vis EO Features of Proposed LWUA Financing Framework Proposed Realignment of Beneficiaries under LWUA s Loan Windows and Programs Philippine Water Sector Roadmap Log Frame Investment Requirement per Year to Meet Targets 38 Figures 1 National Water Supply Coverage 11 2 Water Supply, Wastewater and Sanitation 15 3 Transmission Pathways of Fecal-Oral Diseases 21 4 Incidence Rate of Diarrhea, by Region 22 5 Households with Access to Safe Water and Sanitary Toilets, Access to Safe Water and Sanitation, by Region, LWUA Capital Expenditures, Funding Needs of Water Service Providers Depending on Creditworthiness 29

11 1 Supplementary Appendix A 1 INTRODUCTION The Midterm Progress Report for the Millennium Development Goals 1 reported that (i) based on the 2004 Annual Poverty Indicator Survey (APIS) conducted by the National Statistics Office (NSO) the target for access to sanitary toilet facility has been achieved, and (ii) there is a high probability that the targets for water supply will be achieved. The Medium Term Philippine Development Plan (MTPDP) has actually set a target higher than the MDG targets, as shown in Table 1. Table 1: Comparison of MDG and MTPDP Target vs Actual Performance Baseline 1990 (Actual) 2005/6 (Actual per APIS [NSO]) MDG target (2015) MTPDP target ( ) % HH with access to safe % drinking water % HH with sanitary toilet facility % Source: Medium Term Philippine Development Plan (MTPDP) INSTITUTIONAL ARRANGEMENTS, AND LEGAL AND REGULATORY FRAMEWORK 2.1 Institutional Arrangements There are thirty (30) agencies that are involved in the whole water sector covering water supply, irrigation, flood control, pollution control, watershed management, financing, policy formulation and coordination. However, there are only ten (10) key national agencies involved in the planning, financing, implementation, operation and regulation of the domestic water sector outside of Metro Manila. Table 2 illustrates these institutions and their functions. In the water supply subsector, the key national government agencies include NEDA, DPWH, DOF, DILG, DENR, DOH, NAPC, LWUA and NWRB. However, except for LWUA and NWRB which are agencies dedicated entirely to the sector, the involvement of the rest merely forms part of their overall mandates. Despite the multiplicity of agencies involved in the sector, there is no apex body that oversees the whole water supply and sanitation (WSS) sector. Several agencies exercise oversight responsibilities over certain functions or utilities which results in overlaps. For example, DENR and LGUs have mandates for resource regulation. LGUs regulate their own utilities which is a clear conflict of interest issue, and so with LWUA. LWUA, NWRB and LGUs all exercise economic regulation over WDs, non-wds and LGU-run utilities respectively. MWSS and the Subic Freeport have their own regulatory office that regulates their respective WSPs. 1 Philippines Mid-term Progress Report on the Millennium Development Goals, National Economic Development Authority (NEDA) and United Nations Development Programme (UNDP), 2007.

12 2 Supplementary Appendix A Table 2: Key Water Supply Agencies, Respective Roles and Responsibilities Agency Roles and Responsibilities 1. Local Government Units (LGUs) 2. Department of Interior and Local Government (DILG) 3. Department of Public Works and Highways (DPWH) 4. Local Water Utilities Administration (LWUA) 5. National Water Resources Board (NWRB) 6. National Economic Development Authority (NEDA) 7. Department of Finance (DOF)/ Government Financing Institutions (GFI) 8. National Anti- Poverty Commission (NAPC) Water Supply Coordination Office (WASCO) 9. Dept of Environment and Natural Resources (DENR) 10. Department of Health (DOH) Source: PPTA. Planning and implementation of WSS programs - preparation of WSS master plans - monitoring of local WSS coverage and update of sector coverage - provision of support to WSPs such as RWSAs, BWSAs and cooperatives including funding from IRA Financing, regulation and operation of water systems Based on the LGC, LGUs bear multiple mandates in the sector such as resource regulation, water supply provision and economic regulation of their utilities Capacity building support to LGUs - provision of capacity building training to LGUs - coordination of LGU master plan preparation - provision of information to LGUs on sector programs and financing Assists LGUs in implementing water and sanitation projects Provision of technical support to LGUs upon request including implementation of Level I and Level II projects Technical Assistance to LGUs Implementing agency for Level I and II systems Capacity building support to WSPs - provision of technical advisory services and financial assistance to WDs - provision of technical and institutional support to LGUs and WSPs - setting design standards for water supplies operated by WDS and other WSPs Regulation of WSPs including some consenting LGU-run utilities - tariff regulation - coverage and service regulation - management of sector database including WSP performance data Water resource allocation and economic regulation of WSPs Coordinates the preparation of national development plans and investment programs - formulation of sector policies and strategies - monitoring implementation of policies, programs and projects Sector macro-planning; approval of major sector projects Financing support for the water supply sector - DOF oversees performance of GFIs - GFIs provide funding for the water supply sector Coordinates the President s Priority Program on Water (P3W) water supply projects for 432 waterless municipalities outside Metro Manila, 210 communities within MMA and 201 municipalities in conflict zones Based on EO 192, DENR serves as the lead agency in promulgating rules and regulations for the control of water, air and land pollution, and ambient and effluent standards for water and air quality Watershed management programs and oversight body for wastewater effluents Develops /updates drinking water quality standards; formulates policies on drinking water quality and sewage disposal; formulates drinking water and sanitation programs to prevent environmentalrelated diseases

13 3 Supplementary Appendix A In 1973, LWUA was created to act as a specialized lending agency, providing the Water Districts (WDs) with financial support. LWUA and the Water District concept were created through Presidential Decree (PD) 198 of 1973, also known as the Provincial Water Utilities Act of This law authorized local governments through their sangguniang bayan to form autonomous water districts to develop and operate local water supply systems. It also established LWUA as a national-level agency to cater to the needs of these water districts. PD 198, as amended by PD 768 of 1975, states that LWUA shall primarily be a specialized lending institution for the promotion, development and financing of local water utilities. To carry out this function, according to the PD 768 amendment, LWUA may also: Prescribe minimum standards and regulations in order to assure acceptable standards of construction materials and supplies, maintenance, operation, personnel training, accounting and fiscal practices for local water utilities. Furnish technical assistance and personnel training programs for local water districts. Monitor and evaluate local water standards. Effect system integration, joint investment and operation, district annexation and deannexation whenever economically warranted. WDs are the best performing type of WSPs. The LGUs, which manage some 1,000 water utilities at the moment, do not have the kind of support that the WDs get from LWUA. DILG, which has oversight function over LGUs, does not have enough capacity and resources to undertake its functions of providing capacity building support to the LGUs. This particular function is performed by the DILG-WSS Program Management Office (DILG-WSS PMO) which is just a project office designated to manage foreign-assisted WSS projects. Ironically, LGU-run utilities constitute one of biggest groups of water service providers in the country whose performance to date is mostly below expectation and with the majority of utilities being poorly managed and financially not viable. Under the current MTPDP , NAPC, through its newly created Water Supply Coordination Office (NAPC-WASCO) has been designated as the central coordinating unit for the implementation of the President s Priority Program on Water (P3W). This program is the focus of the current plan, addressing the waterless 2 municipalities/ communities within and outside Metro Manila, including those in conflict zones. P3W can be seen as an attempt to consolidate the efforts of various agencies and WSPs at expanding access to water supply, even if this program is focused only on waterless areas. However, a more comprehensive program of integration is now in the offing with the preparation of a Philippine Water Supply Sector Roadmap (PWSSR) which is expected to be completed and adopted in 2009 as the overall master plan for the sector. 2.2 Sector Institutions: Laws and Regulatory Framework Since the enactment in 1971 of RA 6234 that created MWSS, a series of legislations/ issuances was issued to provide policy guidelines and support for the development of the water supply (WS) sector. Supplementary Appendix B provides a list of the legislations/policy issuances with a brief definition of their respective intent and coverage. Quite noticeable in the list is that more than half of the policies were issued after 1986 and that most of the policies were in the form of executive orders of the President. Secondly, there seems to be no unifying sector development framework and principles that govern their development or upon which they are anchored. Policies appear to be fragmented and are without the benefit of a coordinated, coherent and integrated framework for greater synergy and impact. 2 Waterless is defined as an area (barangay or municipality) with less than 50% water supply coverage.

14 4 Supplementary Appendix A The Local Water Utilities Administration (LWUA) Presidential Decree 198 (PD198), also known as the Provincial Water Utilities Act of 1973, created water districts and the Local Water Utilities Administration (LWUA). LWUA is a specialized lending and technical advisory institution for the water districts. It is governed by a Board of Trustees and an Administrator who implements the policies set by the Board. Its task is to set technical standards for water districts and enable the financially viable water districts to obtain financing from private capital markets. As to rates set by the water districts, LWUA reviews the same and establishes compliance with the guidelines set by the Presidential Decree. Its review decision is appealable to the National Water Resources Board (NWRB). A local water district is considered a government owned or controlled corporation with original charter. It is formed for the purposes of acquiring, installing improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses for residents and lands within boundaries of said district. The other purpose of the district is the provision, maintenance and operation of wastewater collection, treatment and disposal facilities. Under Executive Order No. 123 issued on September 12, 2002, the tariff regulation powers of the LWUA were transferred to the NWRB. However, LWUA retains a rate review function over local water districts with which it has financial exposure. The transfer of responsibilities has not been effected due to the lack of NWRB personnel to carry out the function. On February 2, 2004, Executive Order 279 was issued instituting reforms in the financing policies for the supply and sewerage sector and water service providers and providing for the rationalization of LWUA s organizational structure and operations. An Oversight Committee was formed for the purpose of coordinating and overseeing the implementation of the reforms in the financing, graduation and regulatory policies in the water supply and sewerage sector. The Committee is also tasked to prepare an action plan for the reforms in the financing policies in the water supply and sewerage sector for the near term and mediumterm, including incentive schemes that agencies may consider to offer to Government Financial Institutions and Private Financial Institutions to encourage such institutions to lend to Water Service Providers. Executive Order No. 279 was followed by Executive Order No. 421 issued on April 13, EO 421 implemented the reforms called for in EO 279, specifically on refocusing the functions and organizational structure of LWUA. The organizational reforms in LWUA, however, are presently on hold in view of a temporary restraining order and preliminary injunction issued by the Regional Trial Court in a court case filed by LWUA employees association questioning the reorganization to be implemented by LWUA under EO 279 and EO 421. On July 14, 2008, Executive Order No. 738 was issued transferring the LWUA to the Department of Health. Thus, the Secretary of Health was authorized to exercise administrative supervision over LWUA and directed to coordinate with the Secretary of Public Works and Highways and the Metropolitan Waterworks and Sewerage System to ensure that there will be concerted efforts in formulating policies, in planning and implementing programs for the water sector. On August 1, 2008, Executive Order No. 279 was amended by Executive Order No. 279-A attaching LWUA to the Department of Health and making the LWUA Board of Trustees appointees of the President of the Philippines.

15 5 Supplementary Appendix A National Water Resources Board (NWRB) The National Water Resources Board (NWRB) is the lead government agency in the Philippine water sector, conferred with policy-making, regulatory and quasi-judicial functions. The NWRB's functions and responsibilities are three-fold: i. formulation and coordination of policies, programs and standards relating to the Philippine Water Sector; ii. management and regulation all water-related activities; and iii. regulation and monitoring of water utilities. Under Executive Order No. 123, the NWRB Board is composed of five (5) cabinet secretaries, a representative from the academe, and the executive director and chaired by the Secretary of Environment and Natural Resources. Although independent, insofar as its regulatory and quasi-judicial functions are concerned, the NWRB is under the administrative supervision of the Department of Environment and Natural Resources, as an attached agency. It has twin roles as a water resource regulator and as an economic regulator of water services. Its role as water resource regulator can be traced to the National Water Resource Council (NWRC) which was created by virtue of Presidential Decree No. 424 on March 28, In 1976, Presidential Decree No. 1067, otherwise known as the Water Code of the Philippines was enacted. Based on the principles that: (a) all water belongs to the State; and (b) the State may allow the use or development of its waters by administrative concession, the NWRB was instituted as a water resource regulator tasked to regulate and control the utilization, exploitation, development, conservation and protection of all water resources, and created a water permits system The specific functions of the NWRB, as a Water Resource Regulator, include among others, (a) the issuance water permits for the appropriation, and use of waters; and (b) adjudication of disputes relating to the appropriation, utilization, exploitation, development, control and conservation, and protection of waters. As to its role as the economic regulator of water services of private water utilities, the powers and functions of the NWRB can be traced to the Public Service Commission created under Commonwealth Act No. 146 as amended. In 1972, the said Commission was abolished and its adjudicatory and regulatory functions over water supply services were transferred to the Board of Power and Waterworks. In 1977, the Board of Power and Waterworks (BPW) was abolished pursuant to Presidential Decree No The functions of the BPW were later transferred to the NWRC which was later renamed the National Water Resources Board, pursuant to Executive Order No. 124, which was issued on January 30, The NWRB regulation of private water utilities covers subdivisions, private water operators, resettlement areas, economic zones, rural water and sanitation associations, water cooperatives, locators, small-scale service providers and condominiums in 78 provinces and 115 cities nationwide. Under Executive Order No. 123 issued on September 12, 2002, the tariff regulation powers of the LWUA were transferred to the NWRB. However, LWUA retains a rate review function over local water districts with which it has financial exposure. However, implementation of this provision of the executive order has not gained progress.

16 6 Supplementary Appendix A LGU Operated/ Regulated Waterworks or Water Supply Systems Republic Act No or the Local Government Code (LGC) of 1991 and its Implementing Rules and Regulations (Administrative Order No. 270) provides the basis of the power of the LGUs to allow or permit the establishment and operation of waterworks or water supply systems within their area of jurisdiction as well as to provide for their regulation. In barangay where there are waterworks, the LGC empowers the sangguniang barangay to regulate said waterworks and to charge reasonable fees for the use thereof. Section 391 (a), (7), Chapter IV, Title I, Book III of LGC. In municipalities, the sangguniang bayan shall approve ordinances which shall, subject to existing laws, provide for the establishment, operation, maintenance and repair of an efficient waterworks system to supply water for the inhabitants; regulate the construction, maintenance, repair and use of hydrants, pumps, cisterns and reservoirs; protect the purity and quantity of the water supply of the municipality and for this purpose, extend the coverage of appropriate ordinances over all territory within the drainage area of said water supply and within 100 meters of the reservoir, conduit, canal, aqueduct, pumping station, or watershed used in connection with the water service; and to regulate the consumption, use or wastage of water. Section 447 (a) (5) (vii) LGC. In cities, the sangguniang panglungsod is empowered to enact ordinances that shall provide for establishment of waterworks systems very similar to the power of sangguniang bayan and additionally to fix and collect charge for such waterworks. Section 458 (a), (5) (vii) of LGC. As to provinces, the sangguniang panlalawigan can approve ordinances that shall, subject to applicable laws, facilitate or provide for the establishment and maintenance of waterworks system or district waterworks for supplying water to inhabitants of component cities and municipalities. Section 468 (a) (4) (ii) LGC. The qualification in the LGC subject to existing laws or subject to applicable laws, has been interpreted to mean that laws pertaining to local water districts (PD 198) or the regulatory jurisdiction of the National Water Resources Board (Public Service Act) will still have to be applied and respected. Thus, the issuance of tariff rate adjustments of waterworks whether run by the LGUs or by a private operator, is vested in the NWRB. However, jurisdiction over tariff rate adjustments in the LGU-operated waterworks or waterworks run by private operators within the LGU is still unclear, as the LGUs also exercise such power. The Department of Interior and Local Government (DILG) through its Contract Administration Unit (CAU) administers the LGU-Urban Water and Sanitation Project. It supports the water supply requirement in the urban centers of small and medium-sized municipalities. It caters to (a) municipalities/cities, irrespective of income class, which have not formed water districts, and (b) municipalities/cities, irrespective of income class, which have water districts but are not in LWUA s current program of assistance Other Sectoral Agencies There are other government agencies that are directly or indirectly involved in the water sector in the Philippines. These agencies are: a. National Economic Development Authority (NEDA). The task of NEDA is preparation of national development and investment plans, including the WSS sector. It formulates sector policies and objectives, approves public investment programs and monitors the implementation and performance of those programs

17 7 Supplementary Appendix A b. Department of Environment and Natural Resources (DENR). The Environmental Management Bureau, which is part of the DENR, is responsible for setting standards for the disposal of wastewater. c. Department of Health (DOH). The Department of Health is responsible for setting and enforcing water quality standards, on-site sanitation standards, sewage collection and disposal standards, and drainage standards. d. Department of Finance (DOF). The Department of Finance provides financing support for the water supply sector by overseeing the performance of GFIs that provide funding to the sector. e. National Anti-Poverty Commission (NAPC) - Water Supply Coordination Office (WASCO). NAPC-Wasco coordinates the President s Priority Program on water supply projects for waterless municipalities outside Metro Manila, the MMA and municipalities in conflict zones. There are legislations that form the basis of the water regulation. They were enacted in order to strengthen the regulatory framework and allocate responsibilities between different institutions. These legislations are: a. Presidential Decree 1152 (P.D. 1152), also known as the Philippine Environmental Code, was enacted in 1977, sets standards for water quality and guidelines for the environmental management of water resources. b. Local Government Code (LGC), enacted in 1991, decentralized the provision of public services and shifted the responsibility for provision of these services to the local governments at all levels. c. The BOT law of 1992 created the enabling framework for private sector participation in the infrastructure. d. Republic Act 9275 (RA 9275) formalized the Philippine National Drinking Water Standards (PNDWS) and allocated the responsibility for monitoring of water quality to the Department of Health. e. The National Water Crisis Act of 1995 provided the government with special powers to reorganize WSS Sector entities and pursue private sector participation. This law resulted in the privatization of water supply in Manila. f. Executive Order 279 (EO279) redefined LWUA s role in the financing of the water districts, with an emphasis on the graduation of financially viable water districts to private capital markets. g. RA 9275: Philippine Clean Water Act of 2004 and DAO PCWA Implementing Rules and Regulations. 2.3 Water District Organizational Structure The organizational structure for all WDs is prescribed by both LWUA and the Department of Budget and Management (DBM). All the organizational structures of WDs are in fact approved by DBM every time the WD changes its category (size). There is a Small and Medium Enterprise (SME) Manual on Categorization 3 of WDs which includes model 3 Approved by the DBM on May 11, 1997.

18 8 Supplementary Appendix A organizational structure/staffing pattern, compensation policy and rules for implementation Small and Medium Enterprises Manual The SME Manual was formulated specifically for WDs by DBM since it was classified as a government owned and classified corporation (GOCC) by the Supreme Court in The Manual consists of several parts: I. Categorization Methodology This contains the parameters for categorizing newly organized WDs or those without DBM-approved Position Allocation List. II. Recategorization Contains the standards and methodology for evaluation of WDs requests for recategorization (to a bigger size). III. Model Organization Structure/ Staffing Pattern per Category Contains generic organizational structures as well as the organizational units (Office of the Board, Office of the General Manager; Office of the Assistant General Manager; the various departments and divisions) for every category. Also contains reclassification of personnel positions and salary and allowances rules Analysis of Water District Organizational Structures/Personnel An analysis of organizational structures indicates that all the WDs have followed the Manualrecommended organizational structures for the appropriate category. However, all the WDs were found to have exceeded the allowable number of personnel as per approved structure and approved number of organic personnel. This was done by the WDs through the hiring of job order personnel or contractual personnel. WDs are supposed to submit monthly data sheets (MDS) to LWUA containing therein various operational and financial results. Two of the items in the MDS are the number of personnel and number of service connections. From these, LWUA is able to determine connections per employee, for which the minimum standard is 120 connections/employee. In getting this ratio, WDs do not include contractual personnel, as these people are not permanent and are hired only for a definite period. However, it was discovered that many of these job order employees have been with the WD for more than five years. And almost all WDs resort to this practice of hiring job order staff, not only the five pilot WDs. 4 When asked why these people have been on contractual status for so long, the three most common replies are: a) we have vacancies and none of them have the necessary qualifications, although they can do the job; b) we now have more connections which can justify the number of additional staff, but the recategorization and DBM approval takes long and we need these people now: and c) these are field labor people needed for construction purposes and we always have excavation works, repair/emergency and pipe or meter replacement work, and recruitment takes a lot of time hence, we keep these people since they are already experienced on the job and know office procedures very well. Whatever the reason, some of these contractual staff add to the operating cost of the WD and eventually the tariff levels. But the Commission on Audit, and even LWUA, seldom 4 A case in point is that of La Union Metro WD. It has a plantilla position of 40 staff but has additional job order staff of almost 40; hence, in effect doubling the number of employees. There are some vacancies though in the approved position list.

19 9 Supplementary Appendix A mentions anything about these people, hence the practice is deemed acceptable. 3 WATER SUPPLY 3.1 Water Availability The Philippines is one of the few countries that is blessed with fresh water abundance. Data from the World Resources Institute suggest that the country has a per capita water availability twice as much as the rest of Asia and about six times above the global scarcity threshold of 1,000 cubic meters per person. However, the level of water resources varies from island to island due to uneven rainfall pattern and quality of the watershed s holding capacity. 5 Although the amount of raw water available is more than the demand, a significant percentage of the population does not have adequate and sustained access to potable water supply. Prevailing problems of excessive and wasteful use, pollution of sources, illegal connections and inefficiencies in the distribution are but some of the causes of the shortages. 6 Low well yield, poor water quality, biological contamination, decline of regional water levels and poor well construction and development are some of the many problems dealt with in groundwater source development through wells. For spring development, reliable flows have to be established. On the other hand development of surface water sources requires accurate forecasting of long-term supply, large capital investment and costly operation and maintenance to remove suspended matters, and ensure that the water is bacteriologically safe. 3.2 Water Supply Service Coverage Formal water supply in Philippines is divided into three levels: Levels I to III. Level I is communal wells (point source); Level II is communal tap-stands via pipe network; and Level III is individual connections through a pipe network. For households without formal access to water, the alternatives are self-provision (individual wells, fetching from rivers, springs) or services from vendors or tankers or neighbors. Historical data on access to potable water for the entire country is very limited and some sources show diverging trends. The National Statistics Office (NSO) data shows an increase from less than 75% in 1990 to 80% in However, data from the World Development Indicators show a decrease in access to potable water source from 1990 to Data on urban areas from the World Health Organization and the UNICEF show a decreasing trend from 1994 to 2003 but shows a slight increase in rural areas over the same period. 7 Data from the Medium-Term Philippine Development Plan show that access to potable water decreased from 81.4% in 1999 to 80% in Coincidentally, data from the Annual Poverty Indicators Survey (APIS) shows the same decline, and APIS further adds that access to potable water by the bottom 40% of the population declined from 71.5% in 1999 to 70.2% in Additional data from the NWRB shows an increase in access of households to safe 5 Water Sector Roadmap, NEDA Secretariat, Ibid. 7 CASTALIA Strategic Advisors, Diagnostic Study of the Water Sector in the Philippines, Draft Report to the World Bank, November NWRB, The Integrated Water Resources Management (IWRM) Plan Framework, Summary Document, November 2008.

20 10 Supplementary Appendix A drinking water from 72% in 1988 to 79.1% in 1999, then a decline to 78.1% in The decline was larger, at 2.1%, from 1999 to 2000 for rural households. 9 The GOP set, as one of its main goals in the Medium Term Public Investment Program, , that the entire country has access to potable water. However, given the information available, assessment is a challenge and it seems unlikely that this goal will be met in the near future. While data from APIS indicate that access to safe drinking water has increased from below 75% in 1990 to about 80% in 2005/6, data from other sources such as the World Development Indicators, the World Health Organization and UNICEF indicate a decrease in access to an improved water source between 1990 and The recently conducted World Bank Study, Diagnostic Study of the Water Sector in the Philippines, 10 reports that data on access to drinking water in the Philippines are sparse and conflicting, and this creates a real difficulty of measuring progress in the sector. Measurement of the current situation as regards sector coverage is critical as a starting point in the measurement of the gap to be filled in the coming years. This will be the heart of the design of a sector program to gradually bridge the gap, including estimation of the costs of such an effort as well as the identification of possible sources of financing. Determining the current population levels with access to potable water systems has been extremely difficult, as the monitoring systems have been weak and fragmented. There are variances in estimates made by the different government offices like NSO, DILG and LWUA. Nevertheless, Figure 1 illustrates the declining coverage levels over the past few years. There are four types of organization providing water service to the country s population outside of the service area of the MWSS. These are (i) the water districts, (ii) LGUs, (iii) cooperatives or water associations, and (iv) private suppliers. According to the World Bank s Philippine Infrastructure Study, 2004, and the Philippines Small Towns Water Utilities Data Book, 2005, about 79% of households outside the MWSS Service Area had access to formal levels of service, leaving 21% of the households outside of the MWSS serviced area dependent on whatever sources are available. Of the 79%, only 44% have piped connections (Level III systems), with the remaining 35% dependent on communal systems. Less than half (44%) of the total number of households that had piped connections directly to their homes (Level III systems) were actually supplied by the water districts. About 27% were managed by LGUs, 18% percent were supplied by cooperatives or associations, and the remaining 11% were served by private suppliers. Of the 35% of households that were dependent on communal systems, 10% had access to piped systems with communal faucets serving 4 to 6 households (Level II systems), and the remaining 25% received water through point sources serving an average of 15 households (Level I systems). Level II and Level I systems are operated by LGUs and cooperatives or associations. 9 NWRB, Domestic Water Supply and Sanitation, Undated. 10 Diagnostic Study of the Water Sector in the Philippines. Report to the World Bank, Draft Final Report, November 2008.

21 11 Supplementary Appendix A Figure 1: National Water Supply Coverage 90 Population with Access to Safe Water Supply 85.2 m 2010 MTPDP Target: 92-96% % 60.7 m 78% 68.6 m 81% 76.5 m 62.3 m Coverage is declining 79% 67.4 m 2015 MDG Target: 87% 53.6 m 50 Population (millions) m Sources: National Statistic Office, Data from Census of Population and Housing: 1998, 1999 and 2002 Data from Annual Poverty Indicators Survey. After Ramon Alikpala, Water for Every Filipino (2nd National Conference of Small Water Service Providers), 16 October Data from DILG s Provincial Water Supply, Sewerage and Sanitation (PWSSS) indicate that 21.6% of the 2000 Philippine population had access to Level III water from various water providers. 11 WDs were serving more than 50% of these 21.6%. Table 3 shows the DILG estimate of population served by Level III water supply providers (WSPs) outside of Metro Manila as of Table 3: Population Served by Level III WSPs WSP Type Population Served Water Districts 6,851,487 LGU systems 1,511,680 RWSAs/BWSAs 296,886 Cooperatives 100,216 Private/NGO 286,007 Total Population Served 9,046,276 Source: DILG and Philippine Water Supply Sector Roadmap, Philippine Water Supply Sector Roadmap,NEDA, 2008.

22 12 Supplementary Appendix A It should be noted though that the figure for WD coverage reported by DILG is significantly lower than that reported by LWUA see Section 3.3 below To date, there are an estimated 6,280 water service providers (WSP) in the Philippines (Table 4) serving service levels I, II, and III. Despite the apparently large number of WSPs, however, service coverage to date is still much lower than the 86.8% target that is aimed under the MDG. Most water service providers are small, with very low number of service connections. Generally, service provision of these small water providers is poor and most utilities are not financially viable. Table 4: Water Service Providers, 2005 Water Service Provider Number Water districts (WD) LGU-run utilities 1,000 Rural water supply associations (RWSA) 500 Barangay water supply associations (BWSA) 3,100 Water cooperatives 200 Private firms 900 Total 6,280 1 As of 2004, 127 WDs were not operational Source: Philippine Water Supply Sector Roadmap, LWUA and WD Sector Performance In 2000, LWUA had 425 operational WDs with a total of million service connections serving million people for a coverage ratio of 13.3% of the entire country. As of December 2007, LWUA had facilitated the formation of 598 WDs of which 473 are operational with a combined total of 2,500,947 service connections serving a total population of million in 580 towns/cities. The total franchise population of the operational WDs is 43,561, for a served population ratio of 33% within their franchise area. The WD-served population covered for the entire country is 16.4%. These figures materially differ from those in Table 3. Since most of the sector data emanates from LWUA and the DILG, an analysis of both these data will be investigated during the PPTA to determine cause/s of the variances, especially with respect to Level III coverage. In IBRD s Water Utilities Data Book, 13 the overall performance of WDs as compared to non- WDs is generally better, except on tariffs (WDs have the highest) and staff/connection ratios. This observation had been borne by Castalia s Diagnostic Water Sector Study (2008) and even the WPEP Study of Small Town Utilities in 2004, which were both funded by IBRD. In more specific terms, the key performance indicators drawn directly from DILG s 14 benchmarking exercises reveal that WDs have on the average higher coverage rates (69%) compared to non-wd models (62%). This is adequately explained by a stronger commitment exhibited by WDs management towards developing and planning infrastructure, and towards attaining preset service standards. Higher service coverage among WDs is complemented ably by an impressive 99% revenue collection efficiency, which is testament to consistent policy enforcement (periodically aided by incentive schemes and payer discounts), and active monitoring of both present dues and arrears; non-wd models such as cooperatives 12 NCSO Philippines Small Towns Water Utilities Data Book, 2004 and 2005, IBRD-WSP. 14 As presented by DILG on July 2008 in ADB for LGU-managed Water Systems.

23 13 Supplementary Appendix A and private utilities comparably enjoy at least 99% collection efficiency within their limited coverage area. Stricter monitoring of obligations is also reflected in accounts receivables, where WDs sustain an average of only 1.3 months-worth of A/R, lower compared to non- WDs such as RWSAs (2.5 months) and LGUs (2.3 months). 3.4 Reliability of Supply Reliability of supply is measured through two indicators: (i) water availability and (ii) water pressure at the customer meter. These indicators are important for a number of reasons: (i) with continuous supply at reasonable pressure, the quality of water supply will be maintained by ensuring that contamination of the water supply through ingress of contaminated groundwater will not happen; (ii) continuous supply means that water is available at the convenience of the concessionaire; and (iii) adequate pressure will allow the concessionaire to satisfy his total water need in a reasonable period of time. The indicators also ensure that essential social support services such as fire-fighting can be effective at any time. LWUA sets targets for water districts. NWRB sets targets for those cooperatives/rwsas and private suppliers that acquire Certificates of Public Convenience (CPC) and for LGUs that request for regulatory assistance. LWUA s targets are: 24-hour supply at a minimum pressure of 7 meters for residential customers and 11 meters for commercial establishments and institutions. 15 The NWRB sets 8 hours/day minimum supply effective 2007 and minimum pressures of 5 psi for residential users and 25 psi for commercial establishments. Households served by WDs on average enjoy nearly 24-hour water availability, which is more satisfactory compared to the majority of communities under non-wd service models who only benefit from shorter 20-hour water service. Corollary to this WD efficiency, unaccounted for water (UFW) among sampled WDs is 26%, compared to 30% among non- WDs with LGU-run utilities incurring a considerable 36% UFW due to factors such as declining infrastructure, and socioeconomic and capital financing constraints. Data taken among sampled water districts (Philippines Small Towns Water Utilities Data Book) showed that most water districts are able to provide water 24 hours a day. LGU systems, cooperatives/rwsas, and private systems far exceed the NWRB guidelines, but fall short of 24 hours supply availability which exposes customers to risk of contaminated water. Water districts are also able to meet pressure requirements (Philippine Infrastructure Study, World Bank, 2004) but no data are available for the other water systems. 3.5 Water Quality The country s standards for drinking water are set in the Philippine National Standards for Drinking Water (PNSDW) and are monitored closely among water districts. As a result, compliance among water districts is substantially higher than among LGUs where failure rates and lack of sampling activities have been observed. 16 Of the 31 water systems sampled in both Data Books 17 that are not water districts, seven water systems reported having taken less than 12 samples per year and two water systems reporting having taken no samples at all. 15 CASTALIA Strategic Advisors, Diagnostic Study of the Water Sector in the Philippines, Draft Report to the World Bank, November World Bank, Philippines Small Towns Water Utilities Data Book, December 2005 DILG-GTZ, Bohol and Negros Oriental Water Utilities Handbook, DILG, December 2005, Philippines Small Towns Water Utilities Data Book; GTZ, October 2008, Bohol and Negros Oriental Water Utilities Data Book.

24 14 Supplementary Appendix A Interviews conducted at the NWRB showed that compliance reports on all items indicated in the NWRB Economic Regulatory Guidelines 18 are submitted by regulated water service providers (323 CPC awardees) through annual reports or when there are requests for tariff increases and/or adjustments to CPCs. However, an actual review of these reports to determine the frequency of samples taken and the results of such samples have been done only when the need to do so arises. In areas where no formal water system exists, there is cause for concern. Results of the Water Quality Scorecard (as reported in the 2003 Philippines Environmental Monitor) indicate that only about a third (36%) of river systems/surface water areas are potential sources for drinking water. One percent was rated Class AA requiring only disinfection to comply with PNSDW. Thirty-five percent was rated Class A which requires complete treatment to pass drinking water standards. The remaining 64% was rated not fit for drinking SANITATION 4.1 Introduction The definition and scope of sanitation and wastewater has evolved over the years. Institutions involved in the sanitation and wastewater programs have come up with their own understanding of such terminologies. ADB uses the term sanitation to cover environmental sanitation the collection, treatment, disposal, and recycling of household, commercial, and industrial wastewater. Sanitation also encompasses changing attitudes and behavior, specifically hygiene habits, developing solutions (including financing), and creating a demand for sanitation as a means for making sanitation systems effective. Drainage too must be included because of its unintended use for wastewater and sewage disposal, which has led to fouling up waterways ( Other development agencies (e.g. World Bank, WHO, UNICEF) and the Philippine government have defined sanitation in relation to wastewater management and health. From the above existing definitions, it could be generalized that sanitation is a hygienic measure of isolating the hazards of wastes from human contact to promote health. Such hazards could be contained in gaseous, liquid, and solid wastes. Liquid wastes from residences, institutions and establishments are a combination of wastewater, stormwater, groundwater and surface water that may be present. Wastewater elements could include sullage, sewage (excreta, urine), gray water, and other forms of used water that need to be disposed to minimize risks to health and the environment. In the context of this Project, sanitation would mean an intervention that properly manages domestic wastewater to promote health. Figure 2 illustrates the relationship of water supply to wastewater and sanitation. The state of sanitation in an area can be illustrated using the concept of a sanitation ladder. WHO/UNICEF s Joint Monitoring Program Report (2008) described the four steps of the ladder: (i) open defecation, (ii) unimproved sanitation, (iii) shared sanitation, and (iv) improved sanitation. IRC (2007), on the other hand, has also enumerated four steps: (i) no 18 NWRB, Resolution No , 20 June NWRB, The Integrated Water Resources Management (IWRM) Plan Framework, Summary Document, November 2008.

25 15 Supplementary Appendix A sanitation, (ii) basic sanitation, (iii) environmental sanitation, and (iv) ecological sanitation. Each step of improvement has implications on the level of technology, cost, risks reduced and benefits. The importance of sanitation has been articulated in different occasions at international and local levels. Major activities initiated were: UN declaration of as the International Decade of Drinking Water and Sanitation; the 1992 Earth Summit in Rio de Janeiro adopting Agenda 21 with concerns on sound waste management; Johannesburg Summit of 2002 adopting sanitation as a companion target of safe water for the MDGs; and the UN Declaration of 2008 as the International Year of Sanitation (IYS). With the IYS declaration, global, regional, and national action plans were formulated. The Philippines participated in the East Asia Sanitation Conference (EASAN) participated by 14 Asian countries which was held in Japan in December EASAN ended with a Declaration containing a series of commitments aimed to reverse years of under-investment in and low prioritization of sanitation and hygiene. In the Philippines, there were series of country activities that supported IYS. There was a national launching of IYS and conduct of national and regional sanitation summits in In July 2008, ADB hosted the 2 nd National Sanitation Summit ( This activity forged a Social Contract, with Summit participants highlighting eight action points for improving sanitation and water safety in the Philippines. Figure 2: Water Supply, Wastewater and Sanitation Domestic Water Supply -Drinking -Cooking -Washing -Hygiene Wastewater -Sewage -Sullage -Gray water -Washwater Sanitation -Personal hygiene -On-site systems (e.g. septic tanks) -Off-site systems (e.g. septage/wastewater treatment plant) -Safe environment -Better health 4.2 Policies and Strategies The Philippine Constitution (Article II Section 16) of 1986 stipulates that the State shall protect and advance the people s right to a balanced and healthy ecology. While the current Constitution was only adopted in 1986, statutory provisions on sanitation and wastewater issues in the Philippine legal system date back more than 50 years ago. Criteria, guidelines and standards for the design and construction of sanitation and sewerage facilities are described in the National Plumbing Code (RA 1378 of 1955), Sanitation Code (PD 856 of 1975), Building Code (PD 1096 of 1977) and National Pollution Control Decree

26 16 Supplementary Appendix A (PD 984 of 1976). Collection, transport and disposal of septage and sludge is guided by the Supplemental IRR on Sewage Disposal of PD 856. Disposal of effluents is regulated by DENR through its Administrative Order No. 35. Institutions mandated to construct, operate and maintain sanitation and sewerage systems include MWSS for Metro Manila (RA 6234 of 1971), and Water Districts (PD 198 of 1973) and Local Government Units (RA 7160 of 1991) for those outside Metro Manila. The Clean Water Act (RA 9275 of 2004) stipulated the roles between LGUs and WDs in dealing with wastewater outside Metro Manila. Professionals authorized to conduct sanitary surveys, research, laboratory works, reports, design, direction, management, consultation, and investigation of drainage and sewer systems, sewage treatment plants, sewage disposal tanks, and other structures for public health and welfare are the Sanitary Engineers (RA 1364 of 1955). Other disciplines involved in sanitation at the LGU level are the sanitarians and sanitary inspectors who have the functions of inspecting sanitation facilities of establishments and households to determine compliance with recent sanitation standards as a basis for issuing sanitary permits or building permits. Universities and colleges offering sanitary engineering courses in the Philippines are as follows: Mapua Institute of Technology (Manila), National University (Manila), Technological Institute of the Philippines (Manila), Technological Institute of the Philippines (Quezon City), Partido State University (Naga City), St. Paul University (Tuguegarao City), University of Northern Philippines (Vigan City), University of the Cordilleras (Baguio City), University of Baguio (Baguio City), and Western Mindanao State University (Zamboanga City). The policies and strategies on sanitation and wastewater laid out in the Medium Term Philippine Development Plan for the are as follows: Ensure that all barangay/municipalities that will be provided with water supply services have the corresponding sanitation facilities for proper disposal of wastewater/septage. Continue to provide capacity building programs and technical assistance on water supply and sanitation planning, management and project implementation for all Water Service Providers (WSPs) needing assistance. The Clean Water Act of 2004 and its IRR further stipulates the following requirements: The agency vested to provide water supply and sewerage facilities and/or concessionaires in Metro Manila and other highly urbanized cities (HUCs) as defined in Republic Act No. 7160, in coordination with LGUs, shall be required to connect the existing sewage line found in all subdivisions, condominiums, commercial centers, hotels, sports and recreational facilities, hospitals, market places, public buildings, industrial complex and other similar establishments including households to available sewerage system (section 8). In areas not considered as highly urban centers (HUC), the DPWH in coordination with the DENR, DOH and other concerned agencies, shall employ septage or combined sewerage-septage management system. The DPWH, in coordination with other agencies, shall prepare a national program on sewerage and septage management (NSSMP). Such a program shall include a priority listing of sewerage, septage and combined sewerage-septage projects for LGUs based on established criteria. On the basis of such national listing, the national government may allot, on an annual basis, funds for the construction and rehabilitation of required facilities. Preparatory activities are ongoing for NSSMP

27 17 Supplementary Appendix A which is targeted to be completed by August WDDSP PPTA will coordinate with this initiative to align efforts on septage management. The DOH is mandated to lead the formulation of guidelines and standards for the collection, treatment and disposal of sewage, including guidelines for the establishment and operation of centralized sewage treatment systems. In January 2008, DOH published an Operations Manual on the Rules and Regulations Governing Domestic Sludge and Septage. Each LGU shall appropriate the necessary land, including the required rights-ofway/road access to the land for the construction of the sewage and/or septage treatment facilities. They may raise funds to subsidize necessary expenses for the operation and maintenance of sewerage treatment or septage facility servicing their area of jurisdiction through local property taxes and enforcement of a service fee system. Cities and municipalities which shall establish or operate sewerage facilities may be entitled to receive grants for the purpose of developing technical capabilities. A landmark decision of the Supreme Court ordered ten government agencies to coordinate for the clean-up, restoration and preservation of Manila Bay in response to the complaint of residents along Manila Bay concerning the uncontrolled pollution, despite existing regulations. i. Agencies affected are: Metropolitan Manila Development Authority (MMDA), Department of Environment and Natural Resources (DENR), Department of Education (DepEd), Department of Health (DOH), Department of Agriculture (DA), Department of Public Works and Highways (DPWH), Department of Budget and Management (DBM), Philippine Coast Guard (PCG), the Philippine National Police Maritime Group, and the Department of the Interior and Local Government (DILG). ii. iii. The Local Water Utilities Administration (LWUA), through the local water districts and in coordination with the DENR, is ordered to provide, install, operate, and maintain sewerage and sanitation facilities and the efficient and safe collection, treatment and disposal of sewage in the provinces of Laguna, Cavite, Bulacan, Pampanga and Bataan where needed at the earliest possible time. The DOH, within one year from finality of the Supreme Court Decision, should determine if all licensed septic and sludge companies have the proper facilities for the treatment and disposal of fecal sludge and sewage coming from septic tanks. The DOH was further directed to give the companies, if found to be non-complying, a reasonable time within which to set up the necessary facilities under pain of cancellation of their environmental sanitation clearance. Details on studies, documents and programs/projects in the sanitation sector are presented in Supplementary Appendix E. 4.3 LWUA LWUA s role in urban sewerage and wastewater sector is provided in PD No. 198 [Provincial Water Utilities Act of 1973 (as amended by PD Nos. 768 &1479 and RA 9286)], excerpts of which follow: Sec. 2 Declaration of policy. The creation, operation, maintenance and expansion of reliable and economically viable and sound water supply and wastewater disposal systems for population centers of the Philippines is hereby declared to be an objective of national policy of high priority

28 18 Supplementary Appendix A Sec. 5 Purpose. Local water districts may be formed pursuant to this Title for the purpose of (b) providing, maintaining and operating wastewater collection, treatment and disposal facilities, Sec.28. Sewerage. A district may require, construct, operate and furnish facilities and service, within or without the district, for the collection, treatment and disposal of sewerage, waste, and storm water. Based on this, LWUA issued Board of Trustees Resolution No. 261, Series of 2002, defining the LWUA Policy Statement on Urban Sewerage which states that LWUA intends to: identify low-cost funding sources, preferably subsides and grants-in-aid, to implement sewerage projects; strengthen cooperation among LWUA, WDs, LGUs, other national Government Agencies (NGAs) and Non-Governmental Organizations (NGOs) concerned with water and sewerage issues; harness LWUA s technical capability in sewerage system planning, design and construction; and enhance the application of low-cost, affordable and indigenous technologies to reduce costs impact in sewerage infrastructure for collection, treatment and disposal of liquid fluid. LWUA s Statement of Commitment also discusses that the major issues affecting sanitation are funding and cost recovery. While for the most part, WDs are prepared to take up operation and maintenance of facilities, capital cost and recovery thereof is a major concern particularly the (i) source of funds for sanitation, and (ii) affordability and willingness of beneficiaries to shoulder the additional cost burden of sanitation in addition to the cost of access to potable water. As a result, there have been few feasibility studies done by LWUA on sewerage 20 funded by internal funds from LWUA and grants from the USAID and the World Bank. Out of the 12 feasibility studies done, only one was implemented and this was in Baguio City.which was entirely funded by a grant from the Japanese government. The PWRF is currently funding five studies 21 on sanitation projects to be implemented by water districts. Despite these challenges, LWUA (i) has committed to ventures and initiatives into sewerage and septage management programs and projects beginning 2008, (ii) is initiating steps to source financing assistance from JICA, World Bank, JBIC and other external financing agencies, and (iii) commits to complete the World Bank funded National Sewerage and Septage Management Program (NSSMP) in 2009 to jumpstart planning for sewerage and septage management initiatives all over the country. The NSSMP Project has recently commenced and is expected to be completed within In the 1980s, LWUA funded feasibility studies for Ozamis City, Daet, Zamboanga, Baguio City, and Butuan City. In the 1990s, USAID funded feasibility studies for General Santos and Cagayan de Oro cities. World Bank also funded feasibility studies for Calamba, Cotabato, Roxas, Davao, and Dagupan in As of July 2009

29 19 Supplementary Appendix A 4.4 Sanitation Service Coverage Indicators and figures for sanitation coverage in the Philippines come from various sources with different methodologies and frequencies (Table 5). In 2000 it was estimated that 73-74% of the population had access to sanitation but only 4-5% were connected to sewerage systems. 22 Coverage in 2004 ranged from 72% to 86.2 %. Yet this data are just reflecting household access to sanitary facilities but not the entire sanitation system (e.g. from collection to disposal). For sewerage, except in Metro Manila where an estimated 8% of the population is currently connected to a sewerage network, overall service coverage for the whole country is only about 3%. Outside of Metro Manila, only three cities (Baguio, Vigan and Zamboanga) have sewer systems, serving less than 3% of their service area population (WPEP, 2003). The Vigan and Zamboanga systems were built by the Americans in the late 1920s or early 1930s. The systems cover limited areas in the downtown business districts and serve an insignificant portion of the urban population of the host cities. (EMB, National Water Quality Status Report: 2001 to 2005). Table 5: Indicators, Figures, and Sources of Data on Sanitation Coverage Source Indicators and figures Remarks MTPDP ( ) Access to sanitary toilet facilities % % MDG 86-91% World Bank (2003) Sewerage WHO/UNICEF (2004) Sanitation coverage -72% Urban 80% Rural 59 % World Bank (2005) NSCB, 2008 National Demographic and Health Survey, 2003 Access to sanitary toilets % % HH connection to sewer lines 4% Access to sanitary toilets % % % % % Sanitation Facility Urban Rural Total Sanitary Own flush toilet Shared flush toilet 15.9 Closed pit latrine Sub-total Unsanitary Open pit latrine No facilities/field rop/overhang Sub-total Other Figures are obtained from DOH Annual Reporting System. The Joint Monitoring Program of WHO/UNICEF has a methodology in determining the figures. Report is being generated every 2 years. From Philippine Environment Monitor Data comes from DOH Annual Reporting System Based on sampled households. Report is published every 5 years. Sources: As indicated. 22 Philippine Water Situation Report, 2006.

30 20 Supplementary Appendix A Thus, domestic wastewater largely goes untreated and the majority of the population is exposed to raw sewage. Most water utilities focus only water supply services. While LGUs are mandated to provide essential services, including water and sanitation services, 97% of its investments are for water supply and only 3% is for sanitation and wastewater treatment (Philippine Water Supply Roadmap, 2008). Previous efforts on nationwide sanitation projects of DOH were focused on the provision of toilet bowls as a subsidy to households, wherein households were expected to dig the pit, provide the slab, and install the toilet shelter. This strategy increased the awareness of the community on the importance of sanitary toilet. However, when the projects ended LGUs and households still requested DOH for toilet bowl subsidy. To address this, DOH is coming up with a new sustainable strategy through the development of the Sanitation Roadmap. There were pilot projects on sewerage and wastewater treatments which were implemented by national agencies and LGUs. However, some of them became non-operational (e.g. stabilization pond in Cauayan, Isabela) due to poor operation and maintenance. A septage management system is currently being piloted in Dumaguete City in partnership with the Water District. The turnover from LGU to the Water District of the management for operation and maintenance as well as collection of fees will be in the near future. 5 WATER RELATED HEALTH AND HYGIENE SITUATION AND CURRENT PRACTICES Water and sanitation are fundamental factors in the maintenance of hygiene situation and practices in order to prevent and or control related diseases. Pathogens such as bacteria and viruses are transmitted in various mechanism and pathways involving various routes and vehicles of transmission which are often complex and inter-related (Fewtrel and Colford, 2004). 23 Figure 3 shows this complex interplay of various factors; however, these are mostly controllable with the use of existing technology and interventions. Despite efforts both by the Department of Health (DOH) and LGUs to address health problems related to adequate access to access to safe water and sanitation, water and sanitation is still a public health concern. While public health programs like immunization for vaccine preventable diseases is high and TB prevention and control targets are met, disease outbreaks or epidemics due to water borne and or sanitation related diseases (cholera in Pangasinan; Typhoid outbreak in Calamba) continue to be a major problem in the country. This is compounded by the lack of a trained epidemiologist in the province as the LGU has to depend on epidemiologists from the regional or central levels to conduct the necessary epidemiological investigation activities and in mounting the appropriate public health responses. 23 Fewtrel L and Colford JM Jr. June Water, Sanitation and Hygiene: Interventions and Diarrhea, Health, Population and Nutrition (HPN) Discussion Paper. World Bank

31 21 Supplementary Appendix A Figure 3: Transmission Pathways of Fecal-Oral Diseases Source: HPN World Bank, With acute gastro-enteritis (diarrhea) and soil-transmitted Helminthiasis still posing significant public health risks, sanitation problems do not get sufficient and appropriate attention in the most of the LGUs. This may be indicative of lack of national program guidance, or lack of creative approaches to deal with the problems posed by rampant open defecation, inadequate excreta disposal facilities, and failures in enforcement of sanitation laws. Most LGUs address their respective sanitation problems simply by programming the distribution of toilet bowls, without the benefit of systematic problem analysis and site-specific investigation of the nature of the sanitation problems affecting various population groups. The Water and Sanitation Program at the DOH and as operationalized at the local level still focus on sanitary toilet distribution and construction, and as a result may give a false sense of security in terms of access to adequate sanitation facilities by households or families. While most of the public health programs focus on construction of sanitary toilet and improving access to safe water, complementary strategies related to behavioral change and communication is still wanting. Most of the information, education and campaign (IEC) activities at the local level are sporadic and do not have adequate budget support when compared with other local public health initiatives. There is a strong indication that water and sanitation is still a very big problem in the Philippines. Diarrhea still ranks as the second leading cause of morbidity in country. As of 2006, the target for reduction in diarrhea incidence set by the DOH had already been reached at 708 per 100,000. This decline was largely due to the increase in access to safe water and sanitation services, and handwashing. However, areas with high diarrhea prevalence continue to persist such as the Cordillera Administrative Region (CAR), Central Visayas (Region VII), and Central Luzon (Region III) (Figure 4). The target set by the DOH on access to safe water and sanitation is still short. The DOH has recently set the critical health targets for the country in the medium term. Despite the efforts at the national and local levels, the country has not reached its target (Figure 5) of reaching the 94% mark for access to safe water (86% in 2007) and 91% target for access to sanitary toilet (77% in 2007).

32 22 Supplementary Appendix A Figure 4: Incidence Rate of Diarrhea, by Region (DOH-NEC, 2007) Source: [DOH-NEC] Department of Health - National Epidemiology Center (2006) Field Health Services Information System (FHSIS), Annual Report 2003 to Manila: Department of Health. Figure 5: Households with Access to Safe Water and Sanitary Toilets, (DOH-NEC, 2007) Source: [DOH-NEC] Department of Health - National Epidemiology Center (2006) Field Health Services Information System (FHSIS), Annual Report 2003 to Manila: Department of Health.

33 23 Supplementary Appendix A ARMM (Autonomous Region of Muslim Mindanao) still has the worst performance compared to other regions in the country. The Region has the poorest access to safe water (56%) and sanitary toilets (28%) (DOH-NEC, 2007), and has the highest reported incidence of water pollution and sanitation, and hygiene-related diseases, in the country (Figure 6). It has been observed that in the Philippines, regions with poor access to safe water and sanitary toilets have higher incidences of diarrhea (Morton, et. al., 2006). 24 In areas with access to safe water and sewerage facilities, the quality of service is substandard. Surveys show that one half or more of LGU-operated water systems do not meet drinking water quality standards (De Dios, 2008). 25 This could explain why four out of seven waterborne disease outbreaks recorded in 2007 to 2008 were caused by the contamination of water from local water districts or LGU-managed water systems. In addition, although more than half of Filipino households having septic tanks, these are poorly constructed and not maintained properly. Less than 1% of septic tanks are known to undergo regular desludging and the appropriate treatment (Morton et al., 2006). To illustrate the seriousness of the need to set standards for these basic services, it would be instructive to take the case of Calamba, Laguna, which was recently struck by a massive typhoid outbreak despite the relatively high coverage of safe water (93%) and sanitary toilets (88%) water quality. 26 Figure 6: Access to Safe Water and Sanitation, by Region, 2007 (DOH-NEC, 2007) Source: [DOH-NEC] Department of Health - National Epidemiology Center (2006) Field Health Services Information System (FHSIS), Annual Report 2003 to Manila: Department of Health. 24 Morton J et al. (2006) Philippines Environment Monitor 2006 on environmental health. Washington: World Bank. 25 de Dios JR (2008) Program Implementation Review (PIR): Environmental and Occupational Health Office, February 8, Antipolo City, Philippines. 26 DOH, Health Policy Notes, Volume 1, Issue No. 5, April 2008.

34 24 Supplementary Appendix A 6 WATER SECTOR FINANCING NEEDS 6.1 Sources of Financing Access to financing may be viewed from two perspectives, (i) from water supply providers perspective, (WSP sources of financing for development works), and (ii) from LWUA s perspective, (LWUA s fund sources for its investment program) WSP Sources of Financing There are two types of financing for water districts, namely: conventional or formal fund soruces, and ad hoc sector subsidies (Table 6). As formal financing sources become less appealing to water service providers due to loan exposure (i.e., incremental interest payment obligations), alternative low-cost financing options become very opportune solutions on the other. Such solutions, perpetrated by congressional funds and grant apportions, tend to lower the appetite of WSPs to borrow, or to undergo proactive methods for attaining profitability and creditworthiness. Table 7 diagrams the sources of formal financing that various types of water systems limited to water districts, LGU-run water systems, and private WSPs have accessed over the past eight years. A new source of funds is the Philippine Water Revolving Fund which targets creditworthy WDs following the EO 279 concept. The less creditworthy WDs are expected to remain under the LWUA financing package and will undergo a reform program to become creditworthy. The PWRF loan terms however are not very much attractive compared with the the new LWUA terms. The LWUA interest rate for a 10 year loan of 9.2% is lower than the indicative rate for a PWRF loan which is 9.6%. Moreover, the LWUA repayment period is longer and its floating amortization feature make it more flexible and affordable to water providers. LWUA s new strategy is to provide more concessional terms to less creditworthy water districts which cannot access private financing such as the PWRF. Table 6: Sources of Investment/ Capex Funding Formal Fund Sources Loans accessed from government financial institutions such as Landbank, (LBP) Philippine National Bank (PNB) and Development Bank of the Philippines (DBP). Borrowings from the Local Water Utilities Administration (LWUA); LWUA loans are extended primarily to water districts. Internal Cash Generation (ICG), which essentially describes revenues gained from water sales, tariffs, and service and connection fees. Private Financial Institutions (PFIs) such as commercial banks that offer credit using competitive, market rates. Ad Hoc Sector Subsidies Priority Development Assistance Fund or PDAF allocated to Congress; this is inserted in the annual national appropriation (budget), and enables senators and congressmen to release substantial funding in support of particular development programs or sociopolitical priorities. Provincial Government Funding, derived from the LGU s Internal Revenue Allotment (IRA) or Budget. 20% of the IRA is to be spent on localized development projects Other grants provided by non-government organizations, sociocivic groups. Grants from other Public Sector Patrons refer to in-kind and monetary assistance extended by adjacent LGUs and other political executives

35 25 Supplementary Appendix A Table 7: Access to Financing Items LWUA DBP ( ) LBP ( ) MDFO Commercial Banks LGU Systems None P1,333 million, 54 projects; World Bank and internal funds P7,228 million, 556 projects; on-lends donor and internal funds Targeted to least credit worthy LGUs No evidence Water Districts Main source of financing for Water Districts; LWUA on-lends donor and internal funds LWUA loan refinancing projects: P2,486 million, 16 projects; on-lends World Bank and internal funds No evidence Not part of mandate : P424 million, 5 WD projects (including bulk water) and refinancing Private Systems No evidence P701 million, 3 projects; on-lends World Bank and internal funds No evidence Not part of mandate No evidence Lending Strategy Driven by source of funds Driven by source of funds Driven by source of funds Donor priorities Line of business DBP = Development Bank of the Philippines, LBP = Land Bank of the Philippines, LGU = local government unit, LWUA = Local Water Utilities Administration, MDFO = Municipal Development Fund Office, P = Philippine peso, WD = water district. Source: Castalia Strategic Advisors. March Diagnostic Study of the Water Sector in the Philippines. Report to the World Bank, Final Report. So far, no water service provider has availed of loans from the PWRF. While four water districts have already applied for loans not one has been granted loans yet from PWRF because LWUA still has to sign the waivers for these WDs (a precondition for WD loans outside LWUA) LWUA Sources of Financing (i) LWUA Water Supply Projects For the last 30 years, significant investments in the water supply sector were made through public financing, mainly in the form of loans from LWUA through subsidiary loan agreements (SLAs) with the water districts. These loans were made for water supply projects and were guaranteed by the national government through the Department of Finance. LWUA has also been a recipient of grants from international funding agencies.

36 26 Supplementary Appendix A Figure 7 shows that up to year 2003, foreign borrowing was the dominant and growing source of financing. National government subsidy (NG Subsidy) was the next major source during the study years. National government subsidy and internal cash generation are the main sources of LWUA s counterpart funding for its foreign-assisted projects. The government has had increasing difficulty in providing subsidies to LWUA in view of its worsening fiscal deficit as manifested in delays in cash releases. This has been aggravated by the continuing rise in the cost of servicing its foreign debt, making it difficult for LWUA to generate surplus for counterpart funding despite having a captive market of WDs and a monopoly in lending for technical assistance to WDs. As of 2008, LWUA s debt and equity profile as shown in Table 8 indicates that foreign loans continue to be the major source of financing of LWUA s investment program. While the Law does not limit local water districts to borrow only from LWUA, LWUA s requirement for a prior claim on the water district s revenues in case the water district has outstanding loan obligations and wants to borrow from other sources, has made it difficult for WDs to access the capital market. Also, water districts have found it difficult to comply with requirements of financial institutions, on for example collateral, equity, etc.; LWUA does not require collateral from the water district but has the power to take over the water district s management in case of loan default. LWUA is undergoing reform that would involve redirecting its attention to the development of less creditworthy WDs and other water service providers, in the process, weaning the creditworthy WDs from its financing support and encouraging them to source their financing needs elsewhere. Figure 7: LWUA Capital Expenditures, (P Million) Source: LWUA

37 27 Supplementary Appendix A Table 8: LWUA Debt and Equity as of 2008 Amount % (PhP billion) Long term Debt Loans Payable - Foreign Loans Payable - Local Total Equity Capitalization Donated Surplus (subsidy) Retained Earnings Total Total Long term debt and Equity (ii) LWUA Sanitation Projects Based on the Midterm Progress Report for the Millennium Development Goals, 27 the target for access to sanitary toilet facility has already been achieved. However, in spite of this, LWUA, realizing its mandated responsibilities over the urban sewerage and wastewater as provided in PD No. 198, issued Board of Trustees Resolution No. 261 Series of 2002 defining the LWUA Policy Statement on Urban Sewerage, which states that LWUA intends to: (i) (ii) (iii) (iv) Identify low-cost funding sources, preferably subsidies and grants-in-aid, to implement sewerage projects. Strengthen cooperation among LWUA, WDs, LGUs, other national government agencies, and non-governmental organizations concerned with water and sewerage issues. Harness LWUA s technical capability in sewerage system planning, design, and construction. Enhance the application of low-cost, affordable, and indigenous technologies to reduce cost impact on sewerage infrastructure for collection, treatment, and disposal of liquid fluid. LWUA s Statement of Commitment also cites that the major issues affecting sanitation are funding and cost recovery. While for the most part, WDs are prepared to take up operation and maintenance of facilities, capital cost and recovery thereof is a major concern, particularly the (i) source of funds for sanitation, and (ii) affordability and willingness of beneficiaries to bear the additional cost burden of sanitation in addition to the cost of access to potable water. The LWUA Comprehensive and Integrated Infrasrtucture Program includes the Provincial Urban Sewerage and Septage Management Programme to fund sanitation projects. The ADB WDDSP also includes a sanitation component. The ongoing ADB PPTA for WDDSP is currently considering financing schemes combining grant for capital works, community or beneficiary contributions for operation and maintenance, charging and incorporation of sanitation costs in the water bill, and creation of a revolving fund to ensure coverage of all beneficiaries. While most sanitation projects are implemented through LGUs, there is one particular case in Dumaguete where sanitation facilities were constructed by the LGU and is now in the process of being turned over to the water district for operation and maintenance 27 National Economic and Development Authority and UNDP, Philippines Midterm Progress Report on the Millennium Development Goals. Manila.

38 28 Supplementary Appendix A as well as collection of fees. We shall study the case of Dumaguete Water District to see opportunities to replicate the experience in ADB-assisted cities. 6.2 Sector Financing Framework Targets Planning for the water supply sector has been done as part of the preparation of the Philippine Water Supply Sector Roadmap (PWSSR), and the Medium-term Philippine Development Plan. The ADB Water District Development Sector Project deals with the subsector covering water districts under LWUA. The PWSSR shows that these water districts serve about 76% 28 of the water supply sector outside Metro Manila, as shown in Table 9. There is a serious lack of data on sector coverage and other performance indicators. The PWSSR states that 24.15% of households, or around 6.86 million people, have access to Level III water supply systems of water districts. 29 This represents a discrepancy of around 6 million from the LWUA figures which report that the water districts serve around 13 million of the population which represents around 27% of the city/municipal population. 30 Table 9: Population Served by Water Supply Providers, as of 2007 Items Population Served Number (million) Percent (%) Water District (1) LGU RWSA/BWSA COOP MWSS Private/NGO Total LGU = local government unit, MWSS = Metropolitan Waterworks and Sewerage System, NGO = nongovernmental organization, BWSA = Barangay Water and Sanitation Association, RWSA = Rural Water and Sanitation Association. Source: Philippine Water Supply Sector Roadmap Financing Framework Principles The financing framework for the sector should include the following: 31 Policy that Differentiates between Financing and Subsidies. A water sector financing framework should ensure that water service providers have access to capital for investments that can be recovered in the future. A financing framework may address both access to finance and subsidies. While it is common for financing frameworks to blend these elements, they should be considered separately, as they address needs that are very different, as follows: Access to financing involves ensuring only that water service providers have access to this finance entities with funds to lend (banks and other 28 Philippine Water Supply Sector Roadmap, Secretariat s Report to the Infracom Sub-Committee on Water Resources, November ibid. 30 Based on LWUA Corporate Planning Department data. 31 Source: Castalia Strategic Advisors. March Diagnostic Study of the Water Sector in the Philippines. Report to the World Bank, Final Report.

39 29 Supplementary Appendix A financial institutions) are paired with clients (water service providers) that need to borrow. Subsidies involve supplementing water service providers income in a reliable way when tariffs do not cover the cost of debt servicing. To secure a loan, a water service provider must first demonstrate to a financial institution that it is capable of repaying the loan. Thus, subsidies may be required before a water service provider can get a loan, but the concept is different from pure access to financing. Figure 8 illustrates the main funding needs of water service providers which depend on their degree of creditworthiness, using the terminology set forth in EO 279. Water service providers that are not creditworthy require pure subsidies, while those that are creditworthy only require access to financing. Water service providers in the middle of the spectrum require a blend of subsidy and financing. Water service providers may graduate up this spectrum as their financial viability improves. Figure 8: Funding Needs of Water Service Providers Depending on Creditworthiness Pure Access to Financing Creditworthy Semi- Pre- Non creditworthy creditworthy Creditworthy Pure Subsidy A More Detailed and Comprehensive Water Sector Financing Strategy. There are several gaps in the financing framework under Executive Order 279 as concessional lending in the sector tends to be driven by the source of funds rather than by a comprehensive sector financing strategy. A more detailed and comprehensive sector financing strategy will have to be established by the Government which donors and other providers of funds can support and should not interfere with commercial banks operations in the sector.

40 30 Supplementary Appendix A 6.3 LWUA Financing Framework Development Targets LWUA is gearing its efforts towards its goal of providing water supply to the countryside in line with the government s targets as follows: The Millennium Development Goals aim to ensure that 86.8% of the population has access to safe drinking water by The Medium-term Public Investment Program ( ) seeks to ensure the provision of water to all barangays (villages). Based on this target, the investment program established by the government gives priority to 212 waterless areas in Metro Manila and 633 waterless communities outside Metro Manila. The Medium-term Philippine Development Plan for aims to provide potable water to the entire country by The LWUA administration s current main concern is towards obtaining funds and implementing an accelerated program for the waterless communities. There is, however, very little information on the existing service coverage of this subsector that could be used as basis in planning for the water supply and sanitation infrastructure financing. Current planning process at LWUA is driven by information on available funds on the premise that financing need is so huge and that whatever funds are obtained can be used to help meet the demand. Based on LWUA data, WDs serve a total of million population representing 27.54% of the total population in the municipalities/cities covered by WDs. An illustrative model for the business planning model shows that the coverage can increase from the current 27.89% to 31.06% with an investment of P7.5 billion under certain assumptions, namely capital cost of P20,000 per connection and five persons served per connection (Table 10). If the investment plan is further extended to cover the entire CIIP period from 2009 to 2013, and targeted to specific categories following EO 279, the same illustrative model shows that the population served would increase to 43%, and semi-creditworthy WDs could be credited for serving the most number of persons (Table 11). In the medium to long term, however, the critical aspect of LWUA s operation is to ensure its long-term viability. A proposal on the development of a business planning model for LWUA is shown in Volume 2: Report on Institutional and Financial Assessment of LWUA. The business planning model will address the issues of LWUA s achievement of its mandate visa-vis sustaining its operations viably in the long term.

41 31 Supplementary Appendix A Table 10: Current and Projected Population Served Region Population Served % of Municipal Population Investment 2009 (P billion) Additional Population Served New Coverage of City/ Municipal Population (%) Region 1 632, , , Region 2 284, ,200 41, Region 3 2,752, , , Region 4 2,886, ,010, , Region 5 856, ,500 77, Region 6 911, ,085, , Region 7 979, ,058 98, Region 8 400, ,500 34, Region 9 399, ,400 24, Region , , , Region 11 1,251, ,300 28, Region , ,500 16, Region , ,000 37, CAR 239, ,500 16, ARMM 225, ,000 14, Total 13,135, ,981,658 1,495, ARMM = Autonomous Region in Muslim Mindanao, CAR Cordillera Autonomous Region, P = Philippine peso. Water District Classification Table 11: Additional Population Served by Water Districts No. of Population Served Investment Additional Population Served Water Districts Number % of City/ Municipal Population 2009 (P Billion) New Population Served a New Total Population New % Population Coverage 57 2,902, ,902, Creditworthy WDs Semicreditworthy 178 7,811, ,630,000 12,441, WDs Precreditworthy/ 369 2,420, ,525,000 4,945, Noncreditworthy WDs/Others Total 13,135, ,155,000 20,290, P = Philippine peso, WD = water district. a Assuming investment cost per connection is P20,000 and five persons are served per connection.

42 32 Supplementary Appendix A Current Financing Framework Table 12 compares the sector s current financing framework with the principles set out in EO 279. Type of WD/WSP Creditworthy WSPs Semi-CW WDs Pre-CW WDs Non-CW WDs Other WSPs Table 12 : Current Financing Framework vis-à-vis EO 279 Target (EO 279) Actual LWUA Actual Others Borrow from GFIs and PFIs at commercial rates Borrow from GFIs, PFIs, and on concessional terms from LWUA Borrow from LWUA on concessional terms Grants from donors May continue to borrow from LWUA on concessional terms Financial support from LGUs, DILG, MDFO Access financing from GFIs, PFIs, MDFO, and LGUs LWUA has focused on most creditworthy WDs since LWUA reached domestic borrowing ceiling in December It is at approx. $370 mn of $500 mn foreign borrowing ceiling. Perception that remaining ceiling is not enough to reach targets new lending will be difficult and is likely to target more CW WDs P1.5 billion from DOH will be targeted to 122 non-operational WDs LWUA is not currently lending to systems that are not WDs. Some have accessed private financing. Refinancing of LWUA loans from DBP and private bank (one case). Newly-formed Philippines Water Revolving Fund targets these. Can access financing from commercial banks and DBP only if found creditworthy according to the loan terms Can access financing from DBP only if found creditworthy according to the loan terms No evidence of borrowing from commercial banks LGU systems borrow from LBP, DBP, MDFO Private systems borrow from DBP MDFO focuses on less-creditworthy LGUs CW = creditworthy, DBP = Development Bank of the Philippines, DILG = Department of the Interior and Local Government, DOH = Department of Health, LGU = local government unit, MDFO = Municipal Development Fund Office, GFI = government financing institution, LBP = Land Bank of the Philippines, LWUA = Local Water Utilities Administration, mn = million, PFI = private financing institution, WD = water district, WSP = water service provider. Source: Castalia Strategic Advisors. November Diagnostic Study of the Water Sector in the Philippines. Report to the World Bank. Draft Final Report Initial Financing Framework for LWUA As discussed in the preceding section, there are still no operating guidelines on water sector financing that could serve as basis for a financing strategy to better define LWUA s role and to direct resources it would receive to provide loans to semi-creditworthy and precreditworthy water districts in line with EO 279. However, EO 279 has identified the sources of financing for water service providers according to the degree of need. It specifically addresses the second element of the financing framework how concessional loans and grants may be channeled to water service providers whose revenue is insufficient to repay loans for the investments they must make. This section attempts to establish a conceptual framework for LWUA s financing to ensure (i) its responsiveness to the sector needs and (ii) long-term viability. Very often these two objectives of service and viability run against each other. In fact, many times in the past LWUA has been pushed from one objective to the other. In 1994, the NEDA Board Resolution No. 4 required LWUA to serve only creditworthy WDs. However in 2004, EO 279

43 33 Supplementary Appendix A shifted LWUA s focus to less creditworthy WDs. The suggested strategy 32 now involves positioning LWUA as an administrator of grants to these water districts. The grants, however, will be designed to provide incentives for water districts to graduate to the next level of creditworthiness. These grants will be combined, in a coordinated fashion, with commercial loans from GFIs, so that the blend will result into a concessionary loan to the water district. LWUA will receive a success fee when water districts successfully complete stages of their graduation plans. Pending issuance of the operating guidelines on a water sector financing policy, LWUA needs to provide an initial clarification and some details as to how the financing framework can be worked out within LWUA. Some of the initial features could be as shown in Table 13. Expanding service outside the poblacion (town center) or to the more remote and sparsely inhabited barangays will not, however, be attractive even for the semi-creditworthy service providers. If funding for said projects is maintained at commercial terms, the service providers may just opt to do nothing. There is no sanction after all for those who do not extend services, nor incentives for those who do strive to serve all the potential customers within its area of responsibility. Given this reality, some further refinements in the strategy could be developed without going outside the framework. Some amount of grant may be allowed for this class of WDs provided the funds are used for expansion to the non-viable areas within its franchise area. Following the above discussion, and considering the existing LWUA investment program, Table 14 shows the existing loan windows and programs offered by LWUA and how they can be structured within the proposed LWUA financing. Table 13: Features of Proposed LWUA Financing Framework WD Classification Grant Loans with Relending Terms Creditworthy WD No grant available No loans available Semi-creditworthy WD Lower levels of grant funding may be made available 33 BR 38, maximum of 40 years repayment period and 10.2% interest Pre-creditworthy WD 90% grant 10% loan, under following options: 7.5 9% interest under the P5 million and P10 million loan windows Zero interest under NLIF window Non-creditworthy WD 90% grant 10% loan, zero interest under NLIF window Non-operational WD 90% grant 10% loan, zero interest under NLIF window. BR = board resolution, NLIF = non-lwua-initiated fund, P = Philippine peso, WD = water district. 32 Castalia Strategic Advisors. November Diagnostic Study of the Water Sector in the Philippines. Report to the World Bank. Draft Final Report. 33 Unless the proposed project involves waterless remote barangays and where loan funding at regular terms will not make the project viable.

44 34 Supplementary Appendix A Table 14: Proposed Realignment of Beneficiaries under LWUA s Loan Windows and Programs Financing Windows Existing Policy Proposed Realignment of Target Beneficiaries No loan window Creditworthy WDs open Loan Window 1 for ODA Special Loan Windows for P5 and P10 million loans NLIF Loan Window NLIF Grant Window Comprehensive and Interim Improvement Projects are regular projects for semicreditworthy WDs under Loan Window 1. Creditworthy, semicreditworthy, and noncreditworthy WDs (BR No. 61 and 82 Series of 2008) Included here are projects for non-operational WDs, waterless municipalities, municipalities with no existing water supply systems, and existing WDs. Projects for Less Creditworthy WDs (BR No. 19 Series of 2008) Semi-creditworthy WDs Pre-creditworthy WDs Pre-creditworthy, non-creditworthy, non--operational, waterless, non- WDs to be converted to WDs Total Sample Projects in 2009 ODA Projects Locally funded projects: - Comprehensive/Interim improvement projects - Bulk Water Project - Semi-creditworthy WD improvement projects - Watershed projects - Less creditworthy WD projects - Projects for waterless municipalities - Projects for nonoperational WDs - DOH projects - DPWH projects BR = Board Resolution, DOH = Department of Health, DPWH = Department of Public Works and Highways, NLIF = non-lwua-initiated fund, ODA = Official Development Assistance, WD = water district LWUA s Long-term Viability Given the above framework or the shift of LWUA s resources towards less creditworthy WDs, the question now is How will LWUA manage the various risks involved and maintain its long term viability? Many LWUA staff feel that EO 279 has made LWUA s position less financially sustainable because of the following: focus on less creditworthy WDs would lead to increased non-performing loans, graduation of semi-credit WDs (79% of LWUA s portfolio) to creditworthy will reduce LWUA s market, refinancing loan of creditworthy WDs will result in LWUA losing its main source of income. However, some action steps can be taken to mitigate these risks. Assuming that LWUA is able to source funds to meet the needs of its WDs for both subsidies and financing, the major effort will be for LWUA to intensify its role to develop the water districts to become bankable entities capable of repaying loans to LWUA. LWUA was able to achieve this with its now mature WDs.

45 35 Supplementary Appendix A Second Generation Loans After 36 years in operation, LWUA still has not generated second generation funds, and remains dependent on fresh capital infusion. Since most of the loans provided to WDs are composed of about 60% loan and 40% equity, and since LWUA has exhausted its P2.5 billion equity, the general consensus is that it should have already built a substantial amount for second generation loans. The supposed second generation funds apparently were either used as counterpart equity funds or used to absorb LWUA s losses in years Ringfencing is part of the recommendations of the EO 279, particularly for several aspects of LWUA operations. Grant funds received should be provided as grants and loan components should be ringfenced and provided again for other grant projects. ODA loan funds and Internal cash generation used as counterpart funds, resulting in loans to water districts, should be ringfenced such that when they are eventually repaid, they become part of funds for a second generation loan. 7 SECTOR POLICIES AND DEVELOPMENT PLANNING 7.1 Current Sector Policies Investment Financing: 34 LWUA will concentrate on financing the less creditworthy WDs while the government financial and private banks would finance the creditworthy WDs. The LGU-run utilities would be funded by GFIs as well as the Municipal Development Fund Office (MDFO) of the DOF. Institutional Development and Capacity Building: 35 LWUA and the DILG shall assist the WDs and the LGU-run systems in building their capacity to efficiently operate and manage their utilities. Economic Regulation: 36 Pending an agreement of the executive and legislative in creating a national economic regulatory body, the NWRB shall serve as the economic regulator of WSPs as well as the water resource allocator. Recognizing the authority of LGUs as contained in the Local Government Code, LGU-managed utilities may be regulated by the NWRB on a consensual basis. 7.2 Sector Development Planning The Medium-Term Philippine Development Plan (MTPDP) for and the accompanying Medium-Term Public Investment Program for (MTPIP) respectively articulates the strategies and the supporting capital investment programs for the water sector. The section on water resources forms part of Chapter 3 of the Plan (Environment and Natural Resources). The goal of the current MTPDP is to provide potable water for the entire country by 2010 with priority given to at least 200 waterless 37 barangay in Metro Manila and 200 waterless municipalities outside Metro Manila. As a specialized agency that provides financing and technical assistance to water districts, LWUA has its own capital expenditure program (CEP). LWUA s program can be considered EO 279 (2004). Water Supply Sector Roadmap 2008; NEDA Board Resolution No.5. PD 1206 (1977); EO 123 (2002). Waterless is defined as areas with less than 50% water supply coverage.

46 36 Supplementary Appendix A as a subset of the country s investment program for the water supply sector, it being singularly focused on water districts which are one of the five groups of water service providers (WSP) in the country that include LGU-run water utilities, rural/barangay water supply associations (RWSA/BWSA), cooperatives, and private water providers. For , LWUA s capital expenditure program requires investments of approximately Php 28.6 billion. An inter-agency group headed by NEDA has recently formulated a comprehensive roadmap for the Philippine water sector which will eventually serve as the overall sector plan for water supply (a similar roadmap is planned for the sewerage sector). The Philippine Water Supply Sector Roadmap (PWSSR) provides an overall vision and goals for the whole WS sector and an action plan that addresses the policy, institutional, capacity building and investment requirements of the sector. PWSSR provides a framework and a set of 10 principles that will govern the future development of the whole water supply sector up to It is anchored on an integrated water resources management approach with the following as guiding principles (i) water as a human right, (ii) water as a finite and vulnerable resource, (iii) equitable access to water and sensitivity to gender and the disadvantaged, (iv) transparent and socially accountable governance of the resource and decentralized, (v) being financially sustainable and socially acceptable, (vi) services being demand responsive, (vii) water supply projects to have capacity development components, (viii) a priority component in poverty reduction program, (ix) sanitation is directly linked to water, and (x) development of the sector to contribute to the promotion of gender equality. The roadmap presents an analysis of the existing situation in the sector which is the basis for the subsequent visioning and investment planning. The Roadmap s vision to 2025 is access to safe, adequate, and sustainable water supply for all and the goals are the development goals of the MTPDP and MDG. To achieve this goal, PWSSR has adopted the following strategies: (i) strengthening institutions, (ii) developing capacities of LGUs, WSPs and NGAs to sustainably manage the sector, (iii) developing strategic alliance, and (iv) adequate infrastructure provision. PWSSR s priority programs include (i) establishing a coherent and integrated sector baseline for planning and policy making, (ii) strengthening water economic regulation, (iii) water resources assessment in critical areas, (iv) integrated water supply and sanitation planning framework and process, (v) strengthening the LGU institutional framework and advocacy for ensuring water services provision, (vi) program for rationalizing sector investment and financing, (vii) sector assessment and monitoring program, (viii) support program for capacity development of NGAs, (ix) support program for WSPs, and (x) alliance building program. The Roadmap s Log Frame organizes the planned interventions in the sector for the shortterm (up to 2010) consistent with the MTPDP/MTPIP, the medium-term ( ) and the longer-term period ( ) which is structured along the four strategies/outcomes of strengthening institutions, developing capacities, developing strategic alliances and providing adequate infrastructure. A simplified version of the log frame showing the types of intervention and output indicators is shown in Table 15. With details yet to be provided, the investment program for the long-term until 2025 requires an estimated Php350.4 billion. This amount is initially broken down by 5-year period as shown in Table 16. The investment estimate does not yet include software components such as software development, organizing, etc.

47 37 Supplementary Appendix A Table 15: Philippine Water Sector Roadmap Log Frame Interventions Output Indicators Development Goal by 2025: Access to safe, adequate and sustainable water supply for all 100% access coverage and sustaining utility operations Outcome 1: Strengthened institutions - coherent policy and institutional framework and mechanisms - fully functioning apex body in the WSS - institutionalized transparency and accountability system Outcome 2: Developed capacities - high performing and sustainable WSPs - fully functioning local mechanism for policy formulation, planning, monitoring & evaluation Outcome 3: Strategic alliances built - institutionalized legislative-executive interface - strong public-private partnerships - institutionalized multi-stakeholder platforms and mechanisms Outcome 4: Adequate infrastructure provision - water supply demand by population met through adequate and sustainable mechanism Development Goal by 2015: MDG - Halve the population without access to adequate and sustainable water supply and sanitation Development Goal 2010: MTPDP Graduation of waterless municipalities form 50% service coverage Outcome 1: Strengthened institutional framework - harmonized and mainstreamed institutional and regulatory framework for decentralized and enabling environment Outcome 2: Developed capacities - developed capacities of key LGUs, WSPs and NGAs for sustainable management of WSS sector Outcome 3: Strategic alliances built - broad community support in the development of WSS sector is o 432 waterless municipalities graduated to more than 75% access coverage and sustaining utility operations o existing formal/legal utilities are expanding service coverage to unserved areas o 90% WSPs are regulated o 432 waterless municipalities graduated to more than 50% access coverage o existing formal/legal utilities are expanding service coverage to unserved areas o 60% of WSPs are regulated o clear institutional arrangement o effective tariff and performancebased regulatory policies enforced by NWRB o sustained financing and investments o heightened sector collaboration between state and non-state actors o new management tools and technologies adopted by WSPs for wider coverage and improved service o improved coverage, efficiency and sustainability of WSS systems o effective and sustained NGA support programs for LGUs and WSPs o enabling policy environment in a decentralized framework

48 38 Supplementary Appendix A Interventions Output Indicators effectively mobilized Outcome 4: Adequate infrastructure provision - provision of adequate WS facilities from source development to distribution o dynamic local IWRM mechanisms, networks and initiatives o integrated WSS plans, efficient and sustainable water utilities and improved access o 706 Level I WS systems constructed o 709 Level II WS systems constructed o 1,174 Level III WS systems constructed o 3,692 MLD produced and delivered to Metro Manila, Metro Cebu, Rizal, Bacolod, Bulacan, Aurora and Quezon o 144 sanitation facilities installed Sources: MTPDP, MTPIP. Table 16 Investment Requirement per Year to Meet Targets Year % of target Amount (PhP) Per year (PhP) % 87.6B 29.2B % 87.6B 17.5B % 87.6B 8.7B Source: PPTA. Under the PWSSR, institutional strengthening, capacity development and building strategic alliances are three of the four major components of the plan (the other being infrastructure provision) that address the problems of fragmented, uncoordinated institutional framework and lack of capacities. The goal of the first component is to provide a coherent institutional and regulatory framework for the sector based on a strategy of decentralized policy environment. This goal is to be pursued through the development of coherent policy and institutional framework and mechanisms, having an apex body for the whole WSS sector, and institutionalizing transparency and accountability system. The second component aims to develop capable LGUs, WSPs and NGAs that could sustainably manage the WSS sector through developing local mechanisms for policy formulation, planning and monitoring and evaluation, and providing sustained support services to WSPs. PWSSR s goal to build strategic alliances is aimed to be achieved through institutionalizing multi-stakeholder participation, strengthening legislative-executive interface and promoting public-private participation in the sector. Once officially adopted, PWSSR (and the complementary roadmap for sewerage) could provide the needed overall framework that would integrate and give direction to the development of the whole water supply and sanitation sector. 8 SECTOR ISSUES AND CONSTRAINTS 8.1 Water Supply For sometime now, the WS sector has been faced with issues such as (i) the disparities in water supply coverage across regions, and between urban and rural areas, (ii) depletion of groundwater in many areas, especially in Metro Manila and Metro Cebu, (iii) the lack of cost recovery of investments, (iv) institutional weaknesses, and (v) low willingness to pay.

49 39 Supplementary Appendix A Moreover, unabated pollution of water resources because of poor sanitation and unregulated disposal of wastes threatens some water supply systems. The provision of water supply services has not kept pace with rising demand. The sector has not been able to respond adequately to the demand because of (i) fragmented institutional environment, (ii) weak regulatory framework, (iii) inadequate support for WSPs, and (iv) weak access to financing and investments. Generally, the performance of the WSPs is characterized by slow expansion of services, low quality of services, high non-revenue water (NRW) and dependence on subsidies from the government. Among the service providers, the WDs and private operators are much better off financially than the cooperatives and RWSAs. The worst performers are the small and widely dispersed BWSAs and LGU-run systems which comprise the majority of providers in the WS sector. The predominance of small, highly dispersed and financially unsustainable utilities shows the need for consolidation into larger networks to make them more viable and more effective in improving access coverage to water supply. RA 9275 (Clean Water Act) was a first attempt by government to consolidate the different fragmented laws on water resources management and sanitation. This is the current situation in the sector which somehow reflects the weaknesses in the current policy structure, the way the existing policies are being implemented and the need for further sector reforms. Regulatory oversight is also fragmented and weak. Several agencies were mandated to regulate various aspects of the sector: LWUA, for example, regulates the WDs, LGUs regulate their own water utilities, NWRB looks after subdivisions and some RWSAs and cooperatives, and DENR is responsible for water resources. MWSS has its own regulatory office, private utilities are regulated through contracts and the Subic Freeport has its own specific regulatory body. This arrangement is fraught with potential conflicts of interest because of their direct involvement in other aspects of utility operations. The issuance of EO 123 in 2002 tried to consolidate the economic regulatory function under NWRB but agency effectiveness is being constrained by legal ambiguities as well as financial, technical and staffing capacity. The centralized nature of its operation does not allow performing its regulatory function outside Metro Manila. Recent policy reforms have focused on financing policies for the WSS sector. EO 279 introduced the graduation policy for WDs and focusing LWUA s role to financing less creditworthy utilities and assigning the financing of creditworthy ones to GFIs and PFIs. To support this policy, EO 421 refocused LWUA s functions and organizational structure to this new definition of the agency s mandate. There were also some initiatives, through legislation, to address the regulatory issue and the larger issue of institutional fragmentation and inadequate management of the sector. A Water Resources Management Act of the Philippines (WRAP) bill was introduced in Congress in 1997 to develop a comprehensive water resource management strategy, prepare a draft law on water resources and aim for economic regulation of water service providers. This bill, however, was not passed due to poor timing and the lack of momentum when President Ramos left office. Another bill, Water Regulatory Commission (WRC) Act, was initiated in 2000 to create an independent regulator. Like WRAP, this bill was also not passed by Congress for lack of support. The most recent effort by government is the development of a roadmap for the whole WS

50 40 Supplementary Appendix A sector. 38 An inter-agency group within the Infrastructure Committee (INFRACOM) of NEDA has prepared a draft document that provides a long-term vision and action plan for a coherent, comprehensive and integrated development of the whole sector. The Philippine Water Supply Sector Roadmap (PWSSR) only lacks the detailed investment plan for it to become a working document. The following issues and constraints are discussed in more detail below: i. Fragmented institutional framework. ii. Ownership of water districts. iii. Constraints in the governance of water districts. iv. Inadequate economic regulatory framework. v. Financing issues. vi. Inadequate support to rural water supply. vii. Share of National Wealth issue. viii. Court decision ending exclusivity of WSPs in their service areas Fragmented Institutional Framework The water sector is terribly fragmented, with over 30 different agencies having some role in water resources, and water supply and sanitation. Metro Manila water supply is provided by the two concessionaires of MWSS as well as from about 350 small-scale piped water providers. Outside of Metro Manila, most piped water services are provided by 470 water districts and 350 LGU run utilities. There are some privately run utilities, including about 300 cooperatives, 300 RWSAs and about 12 private companies operating piped water systems in various provinces, not counting the private subdivisions/villages. There could be as many as 2,000-3,000 piped systems in the country. The responsibilities of the different agencies with respect to the different utility management models are sometimes vague and overlapping. The WDs are fairing better than other models due to the assistance of LWUA which is a dedicated support agency. On the other hand, the DILG Water Supply and Sanitation Program Management Office which provides development assistance to LGU systems, is merely a project office designed to manage specific foreign assisted and sanitation projects. The Cooperative Development Agency is mandated to assist institutionally the water cooperatives, but the CDA is not a water technical or funding agency. The RWSAs are an orphaned group of WSPs which does not have a dedicated agency helping them. LGU capacity to plan, manage and regulate water systems are still undeveloped, even after implementation of the local government code, due to the lack of financial resources, political environment (low tariff/ cost recovery level, short-term policy decisions) and lack of external regulations defining and enforcing performance levels. There is currently no single department or body with overall responsibility for water sector policy and coordination or for overseeing the implementation of sector reforms. The NWRB could be an apex body in the Philippines water sector, as it was created to coordinate and regulate water resources management and development activities. 39 However, the primary focus of NWRB is in the area of water resources, and it does not possess the required resources and authority to fulfill an apex role. NEDA has a role in overall planning and programming coordination, including for water supply and sanitation. However, NEDA s role concerns more macroeconomic planning 38 It was gathered that a similar roadmap for sewerage and septage will be prepared. 39 NWRB s authority is derived from Presidential Decree No. 424, which provides for the National Water Resources Council Charter, and Presidential Decree 1067, otherwise known as the Water Code of the Philippines.

51 41 Supplementary Appendix A meaning NEDA does not necessarily coordinate with other water sector stakeholders on a regular basis Ownership of the Water Districts There is uncertainty as to who owns the water district. Under Presidential Decree No. 198 as amended, promulgated on August 15, 1975, a local water district is conceptualized as a quasi-public corporation performing public service and supplying public needs. It can exercise powers, rights and privileges given to private corporations under existing laws in addition to the powers granted by and subject to the restrictions imposed in the decree. As defined, quasi-public corporations are private corporations that render public service or supply public needs. While purposely organized for the gain and benefits of its members, they are required by law to discharge functions for public profits. However, on an issue of whether employees of the water districts are government employees or not, the Supreme Court in its decision dated September 13,1991, in the Davao City Water District vs. CSC et al., G.R. No , declared the water district as a government owned and controlled corporation, performing a public service and supplying public needs. While the decision did not identify the owner of the water district, it, however, specified that the law that gives corporate life or existence to a water district is not the resolution of the sanggunian, but PD 198 as amended. Furthermore, it is provided that upon formation of the water district, it is no longer under the jurisdiction of any political subdivision or LGU. The Administrative Code of 1987, Executive 292, defines a government owned or controlled corporation as any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock. Government owned or controlled corporations may be further categorized by the DBM, the Civil Service Commission and the Commission on Audit for purposes of the exercise, and discharge of their respective powers, functions and responsibilities with respect to such corporations. The Supreme Court s classification of water districts as government owned or controlled corporations in the Davao City Water District Case was affirmed in subsequent cases ruled upon by the said Court. More recently, on January 14, 2004, in the case entitled Engr. Ranulfo Feliciano vs. Commission on Audit, G.R. No , the Supreme Court categorically ruled that a local water district is a government owned and controlled corporation subject to the audit jurisdiction of COA. It held that water districts are not private corporations because they are not created under the Corporation Code. They are not registered with the Securities and Exchange Commission. They are government owned and controlled corporations with special charter (PD 198 as amended). The government owns and controls the water districts. There is no private party involved as a co-owner in the creation of the water district. Just prior to the creation of water districts, the national or local government owns and controls their assets. The government controls the water districts because under PD 198, the municipal or city mayor or the provincial government appoints all the board directors of the water districts for a fixed term. The board directors are not co-owners of the water districts. The water districts have no private stockholders or members. The board directors and other personnel of the water districts are government employees.

52 42 Supplementary Appendix A To the question of who owns the water districts, the clear answer is that it is the Government of the Republic of the Philippines. It is neither the national government nor the local government that formerly owns the assets, if assets were transferred to a newly created water district. Section 30 of PD 198 apparently reinforces the Supreme Court ruling as to water districts formerly owned by the LGUs. It provides for payment by the water districts of in-lieu Share to the city, municipality or province that formerly owns an existing waterworks system. Thus, the decree authorizes a district to enter into a contract to pay in-lieu share for such utility plant, an annual amount not exceeding three percent (3%) of the district s gross receipts from water sales in any year; provided, however, that no contract of this nature shall be executed during the first five years of the existence of the district; and provided, further, that the Board of Directors shall determine that such contract will not adversely affect or impair the fiscal position and operations of the district as verified by LWUA. A careful analysis of PD 198 as amended reveals that although intended and clearly declared to be private corporations for public benefit, specifically quasi public corporations, water districts bear all the characteristics of non-stock government owned or controlled corporations. Herein lies the ambiguity. There is need therefore, to clarify the legal status of the water district and this can be done through a legislation that would set its exact nature and characteristics Constraints in Governance of Water Districts For WDs, oversight or regulation is enforced by LWUA as embodied under PD 198. Regulation of the WDs covers water quality, design and construction, equipment, materials and supplies, operation and maintenance procedure, accounting system, water tariff and even the hiring of personnel. However, regulation of the accounting system has been taken over by the COA when the WDs were declared as GOCCs. Water tariff regulation was transferred to the NWRB with the issuance of EO 123. However, LWUA can still impose its will with regard to the implementation of cost recovery tariffs and the continuous usage of the prescribed management information system and commercial practices system as part of its loan covenants with the water district. According to Section 3 of PD 198, the person empowered to appoint the members of the Board of Directors of a local water district depends on the geographic coverage and population makeup of the particular district. If more than 75% of the total active water service connections of the water district are within the boundary of any city or municipality, the appointing authority shall be the mayor of that city or municipality, as the case may be; otherwise, the appointing authority shall be the governor of the province within which the district is located. This provision of the Decree also makes a water district think twice before annexing any town/s, as the appointing authority may change upon the geographical distribution of the connections. It must be noted that the Board of Directors of a WD are appointed by the mayor of the town or city, and any possible changes in the appointing authority will usually be resisted by the original appointing authority. In the case of membership in a WD Board, it is only the appointing authority of the local government unit which formed the WD or the LGU which has more than 75% of the connections that can appoint the five members of the Board. PD 198 is silent about the representation of the annexed areas in the Board of Directors of the water district. If a water district is formed by a local council of a municipality, the municipal mayor gets to appoint the five members to the district board. If he decides to merely annex his town to an existing water district, the mayor of the annexed municipality has no authority to appoint members to

53 43 Supplementary Appendix A the Board. Another governance issue that somehow deters LGUs from forming a cluster WD (or even a one-municipality WD) is about accountability and transparency of operations. The barrier therefore is related to the absence of accountability and transparency of operations of the water districts in general. The problem is that WDs are distrustful of the intentions of their local political leaders asking pertinent public documents and other data related to their operation. Most WDs are apprehensive that their local leaders become interested in the operation of the WD for the purpose of either (a) compelling the WD to employ certain persons as a payment of their political debts; or (b) to put pressure on the WD to dissolve itself and to be eventually taken over by the LGU. If ever a WD reluctantly releases financial documents and operational data they are usually sanitized to be of no use by the LGU other than for informative purposes. A local water district s accountability with respect to its local government is more implicit rather than explicit, the latter having initiated its creation. For many years now, the lack of funds that has been hounding LWUA has led some local governments to seek other options to improve service provisioning in their jurisdictions such as those involving PSP arrangements. Some of these options have required the dissolution of the water district or de-annexation of a municipality or city from a metropolitan water district Inadequate Economic Regulatory Framework The current regulatory framework (laws, institutions, processes) in the Philippines is very fragmented as can be gleaned from the institutional framework, and unfortunately such fragmentation covers economic regulations as well. In order to improve service coverage, improve service efficiencies, protect the consuming public and induce private investments into the sector, adequate economic regulation must take place. The three primary economic regulatory agencies are NWRB, LWUA 40 and the LGUs. Other regulatory bodies include the MWSS-Regulatory Office, Subic Bay Water Regulatory Board and even the Judicial Courts. These agencies are either under-resourced (NWRB, LGUs) or have limited or no authority to enforce their decisions (LWUA, NWRB) or have conflicts with their other functions (LGU, LWUA). Overlaps in responsibilities among the regulatory agencies are common. There is no economic regulatory body prescribing performance standards for all utilities, and monitoring and benchmarking performance. Not all utilities are registered, as there are no penal provisions enforcing same and no common methodology for tariff review. Low service coverage and poor water service are the result of an inadequate regulatory framework Financing Issues The major source of loan funding since the mid-1970s for the sector had been LWUA for the provincial areas and the MWSS for Metro Manila. MWSS eventually resorted to private sector participation to improve its services. During the mid-1990s LWUA s funds were drying up, hence the Government tried to design a financing framework which would stimulate more sector investments and improved utility service. The new framework, as embodied in EO 279 of 2004, basically limited LWUA s role to funding less creditworthy WDs, while the creditworthy WDs are to source their funding from the banking sector, both government and private. 40 Expressly provided in PD 198 is LWUA s authority to approve tariffs, set up and operating standards, and monitor conformance thereto.

54 44 Supplementary Appendix A Funding for waterworks systems come from GOP releases, GFIs and PFIs and from LWUA. The funding from GOP is basically for Level I and II systems which generally are stop-gap measures and not sustainable. While the funds for rehabilitation and expansion of waterworks system may be available in the different GFIs and PFIs, these entities are not familiar with the sector, and are prone to provide loans only with sufficient guarantees. In fact LGUs find it impossible to borrow without their IRA guarantees. The only agency which provides development loans to water districts is LWUA which is now having problems, since their capitalization of PhP2.5 billion has already been reached. Private funds are now coming in (for private utilities) due to the demand gap, but these serve only selected areas Inadequate Support to Rural Water Supplies Many rural water supplies are having difficulty in sustaining operations and expanding coverage. There is no dedicated national agency like LWUA to assist these rural systems in terms of technical design, project financing, management and operations. These systems merely rely on DILG s PMO, LGUs and WDs to assist them on an intermittent basis Share of National Wealth Issue In areas where the water districts (WD) draw groundwater, the LGUs having jurisdiction over the same assess the said WDs Share of the National Wealth provided for in the Local Government Code. Since the time this issue of whether or not the WD is liable to pay the LGU said Share of National Wealth, the Office of the Government Corporate Counsel (OGCC), the statutory legal counsel of all water districts in the country, has consistently opined that the water districts are exempt from payment of the said Share of the National Wealth. This issue has created uproar among the LGUs that are convinced that the WDs should pay. The LGUs are vent on preventing or prohibiting WDs from drawing groundwater within their respective areas. No final ruling or settlement of this issue has been made by higher authorities. In the meantime, WDs comply with the opinion of the OGCC, while the LGUs continue to prevent them from sourcing water. A summary of the various legal opinions of the OGCC is attached as Supplementary Appendix B Court Decision Ending Exclusivity of WSPs in their Service Areas The following is a Commentary on the Supreme Court case of Metropolitan Cebu Water District (MWCD) vs. Margarita Adala G.R. No and its effect on the Water Districts. The Supreme Court Decision. In the referred Metropolitan Cebu Water District case, the Supreme Court struck down as unconstitutional, Section 47 of P.D. 198 which states: Sec. 47. Exclusive Franchise No franchise shall be granted to any other person or agency for domestic, industrial or commercial water service within the district or any portion thereof unless and except to the extent that the board of directors of said district consents thereto by resolution duly adopted, such resolution, however, shall be subject to review by the Administration. The Supreme Court stated that [n]onetheless, while the prohibition in Section 47 of P.D. 198 applies to the issuance of CPCs (Certificates of Public Convenience) for the reasons discussed above, the same provision must be deemed void ab initio for being irreconcilable with Article XIV, Section 5 of the 1973 Constitution which was ratified on January 17, 1973, the constitution in force when P.D. 198 was issued on May 25, Section 5, Article XIV of the 1973 Constitution which is reproduced in Section 11, Article XII

55 45 Supplementary Appendix A of the 1987 Constitution pertinently provides as follows: Section 5. No franchise, certificate or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of the capital of which is owned by such citizens, nor shall such franchise, certificate or authorization be exclusive in character or for a longer period than fifty years. x x x x x x This is the second provision of P.D. 198 which was declared unconstitutional by the Supreme Court, the first one being on January 14, 2004 in the case of Engr. Ranulfo Feliciano, GM of Leyte Metropolitan water District vs. COA pertaining to the appointment of private certified public accountants to perform audit work in the water districts. The Metro Cebu WD case arose from the application of Adala with the NWRB for the issuance of the CPC to operate and maintain waterworks system in three (3) sitios in a barangay in Cebu City. The application was opposed by Metro Cebu Water District. The NWRB rendered a decision in favor of the applicant giving the latter a CPC for a period of five (5) years. Metro Cebu Water District appealed the decision of the NWRB with the Regional Trial Court of Cebu City which denied the appeal. Metro Cebu Water District went to the Supreme Court on questions of law. Metro Cebu WD filed on August 7, 2007 a Motion for Reconsideration of the Decision of the Supreme Court which was denied. The Decision of the Supreme Court has since become final. Implications of the Decision on water districts. a. The applications for CPCs (Certificates of Public Convenience) by private operators with the National Water Resources Board (NWRB) can no longer be opposed or prevented on the grounds that there is a water district existing and operating within the area applied for. Thus, the NWRB may allow small water service providers to establish their water supply business within the service area of the water district, especially where the water district is not able to serve the whole service area. b. The Supreme Court Decision has been interpreted as signalling the start of the era of open competition among service providers, big and small. This will allow parallel pipes being laid down on streets by "competing" water providers. The grim result will be that one set of pipes that used to generate good cash flows will suddenly become redundant and the associated sunk cost will become irretrievable. Economic regulation has gone out the window and this makes both community, local government and water district investments in water services untenably risky. c. The NWRB will have to be extra careful in its issuance of CPCs to operators within the water districts, applying strictly the standard of public necessity or interest in each application. d. Once a waterworks operator is issued a CPC by the NWRB, the water districts will no longer be able to enforce the rights granted to them by P.D. 198, particularly Section 31 (a) on interference with or deterioration of water quality or the natural flow of any surface, stream or ground water supply; Section 31 (c) prohibiting persons, firms or corporations from vending, selling or otherwise disposing of water for public purposes within the service area; and Section 31 (d) on installing of water connection without authority from water district and criminalizing said act. e. It would be prudent for both the NWRB and Local Water Utilities Administration (LWUA) to come up with an agreement and guidelines in the issuance of CPCs to waterworks operators within a water district s service area.

56 46 Supplementary Appendix A f. On the other hand, the Decision may have a positive effect in the sense that the water districts will now have to be prudent at the same time, and exert more effort and time to improve the service and rapidly expand their service coverage; otherwise private water operators might eat up their service areas. This is the best time for water districts to improve their creditworthiness. g. A water district is a government owned or controlled corporation, with P.D. 198 as its charter and its franchise (see Feliciano vs. COA, G.R. No , January 14, 2004). When the 1973 and 1987 Constitution mentioned franchise to operate public utilities as non-exclusive, it appears to be referring to a franchise granted to private persons or corporations or what is called quasi-public corporations. The constitutional provision on franchise may not refer to the water district, which is an agency of Government with a specific assignment and uniquely granted with eminent domain power, right of way, tax exemption etc. However, since the Supreme Court Decision has become final, it is bound to be followed as part of the law of the land. 8.2 Sanitation The major issues and challenges are: Prohibitive cost of conventional wastewater treatment. Low capability for implementing sanitation and wastewater management. Poor enforcement of national policies on sanitation and wastewater. Inadequate political will of local chief executives in pursuing sanitation issues. Unclear delineation of roles among key stakeholders. Prohibitive cost of conventional sewerage and wastewater treatment. Although the Water Districts and LGUs have the mandate for sanitation and wastewater services, the prohibitive costs of the facilities and the low willingness to pay of households for services make it difficult to package projects on sanitation with conventional sewerage and wastewater treatment. The absence of these interventions contributes to the burden of environmental pollution and disease since most of the wastewater discharges are eventually disposed to bodies of water with little or no treatment at all. Low-cost technology options are envisioned to address the issue. The Clean Water Act of 2004 supports the provision of low-cost or alternative technologies for wastewater systems. Moreover, alternative financing mechanisms have to be developed in tandem with the technologies. Market-based instruments could be explored as incentives for generators of wastewater. Low capability for implementing sanitation and wastewater management. Due to low priority given to sanitation and wastewater, human resources and systems on dealing with this issue is wanting. There is a need to develop the capacity of LGUs and water districts on planning, design, construction, operation and maintenance, and monitoring of sanitation and wastewater systems. Professionals that are directly engaged are the Sanitary Engineers. However, only few universities are offering this course and, if offered, there are limited enrollees. A vigorous campaign and promotion on sanitation has to be instituted at different levels. Poor enforcement of national policies on sanitation and wastewater. The continuous degradation of water resources is a manifestation of poor enforcement of relevant policies. The complaint filed by concerned residents along Manila Bay vs. specific government agencies that have mandates on controlling pollution is an illustration of people s dismay about poor enforcement of national policies on pollution control. National policies should be supported by local ordinances to localize and adopt required sanitation provisions.

57 47 Supplementary Appendix A Inadequate political will of local chief executives in pursuing sanitation issues. Possible reasons are: scarcity of information on the costs and benefits of sanitation; lack of feasible project packages; and poor advocacy campaign on the importance of sanitation. Moreover, there is a need to demonstrate sanitation models from successful projects to show with other LGUs on how sanitation program should be implemented. A champion for sanitation should come out to rally with LGUs on the importance of sanitation. Unclear delineation of roles among key stakeholders (e.g. LGUs, water districts). Although the Clean Water Act of 2004, PD 198, and the Local Government Code have stipulated the functions of LGUs and WDs, there is no clear description on who is the lead of the subsector, who will initiate action to trigger sanitation activities and what will be the penalties for government agencies that are not enforcing the regulations they are tasked to implement. There is a need to further define the responsibilities which is expected to be addressed by the NSSMP.

58 1 Supplementary Appendix B WATER SECTOR LAWS AND POLICIES 1. Water Sector Laws and Policies OGCC Legal Opinions on Water Districts Related to Share of National Wealth Issue and Other Issues WATER SECTOR LAWS AND POLICIES National Legislation and Policies Republic Act No of 1971 Presidential Decree No. 198 (Provincial Water Utilities Act of 1973 as amended) Presidential Decree No. 424 of 1974 National Water Resources Council (NWRC Charter) Presidential Decree No. 856 of 1975 (Sanitation Code of the Philippines) Presidential Decree No. 984 of 1976 (Pollution Control Law) Presidential Decree No of 1976 (Water Code of the Philippines, as amended) Presidential Decree No (Philippine Environmental Policy) Salient Provision Creating the MWSS and making it responsible for water supply in Metro Manila. In 1997, MWSS was privatized with the management and operations transferred to MWSI and MWCI under a 25-year concession contract. Creating LWUA and local WDs. It established LWUA as the government resources provider and the WDs as the local water service providers. It also gives authority to LWUA as a specialized lending institution for, and provides technical and training assistance to, WDs. Creating NWRC, which is now NWRB, to coordinate the planning of some 30 water resources agencies of the government. Codifying and enforcing the various sanitation policies of government including standards for water supply, food processing and servicing, sanitary facilities, sewerage and sewage management, markets and abattoirs, industrial hygiene and funeral parlors. Sets up the administrative and regulatory mechanisms for pollution control and establishes air and water quality standards that define maximum limits of emissions and effluents from domestic, commercial and industrial activities. Provides the framework for implementing the provisions of the Constitution on water resources development and management with regard to water quality. This includes the rules governing the rights and obligations of water users as well as the administrative structure to enforce the provisions of the water code. The code adopts prior appropriation doctrine of first in time, first in right for water allocation in the country. Defines the general state policy on the pursuit of a better quality of life without degrading the environment. One of the most important provisions is the requirement for all agencies and corporations to prepare an Environmental Impact Statement (EIS) for every project or undertaking which significantly affects the quality of

59 2 Supplementary Appendix B National Legislation and Policies Salient Provision the environment. Presidential Decree No (Philippine Environment Code) Establishes specific environmental policies and quality standards for a comprehensive program on environmental management. The law specifies the classification of water bodies according to best use. Presidential Decree No (Public Service Law of 1977) Presidential Decree No of 1978 (Environmental Impact System) Philippine Constitution of 1987 Executive Order No. 124-A of 1987 EO 192 of 1987 (Department of Environment and Natural Resources (DENR) Charter) Republic Act 6957 of 1990 as amended by RA 7718 of 1994 (Build- Operate-Transfer Law) Republic Act 7160 (Local Government Code of 1991) National Water Crisis Act of 1995 Republic Act No (Philippine Clean Water Act of 2004) Mandates NWRB to supervise, control and regulate all water utilities except those falling under the jurisdiction of the MWSS and LWUA. EO 123 mandates NWRB to approve tariffs of local water districts. Requires projects with potential adverse effects on the environment to obtain an Environmental Compliance Certificate (ECC) as a prerequisite for implementation. Provides the basic principles of water resources development and management, which stipulate that all waters of the Philippines belong to the state. Converted NRWC into the NWRB. Provides for the reorganization of the DENR as the lead agency in, among others, promulgating the (a) rules and regulations for the control of water, air and land pollution, and (b) ambient and effluent standards of water and air quality. Authorized the financing, construction, operation and maintenance of government infrastructure projects by the private sector. Defines the functions and powers of LGUs, i.e. provinces, cities, municipalities and barangays, in environmental protection. RA 7160 mandates LGUs to undertake watershed-related activities, initially confined to community-based management (CBFM) social forestry and watershed projects. Since then, a number of environmental functions of various NGAs have been devolved to LGUs. Provided the legal basis for the privatization of the MWSS in Provides for comprehensive water quality management. It also provides the framework for sustainable development to achieve a policy of economic growth in a manner consistent with the protection, preservation and revival of the quality of fresh, brackish and marine waters. The passage of RA 9275 is also the first attempt to consolidate different fragmented laws on

60 3 Supplementary Appendix B National Legislation and Policies Salient Provision water resources management and sanitation. Executive Order No. 123 of September 2002 Executive Order No. 279 of February 2004 Executive Order No. 387 of November 2004 Executive Order No. 421 of April 2005 Executive Order No. 738 of July 14, 2008 Strengthening NWRB including assumption of LWUA s WD tariff approving authority. Instituted reforms in the financing policies for the water supply and sewerage sector and water service providers; rationalizing LWUA s organizational structure and transferring it to the Office of the President. Transferred LWUA from the Office of the President to DPWH. Refocusing LWUA s functions and organizational structure as envisioned in EO 279. Transferred administrative supervision of LWUA from the Department of Public Works and Highways to the Department of Health. Sources: Philippine Water Supply Sector Roadmap, Table 6, p.141. Water Supply Master Plan for Metro Manila Partial Update 2005, Appendix J. 2 OGCC LEGAL OPINIONS ON WATER DISTRICTS RELATED TO SHARE OF NATIONAL WEALTH ISSUE AND OTHER ISSUES Opinion No. 150 s Ilocos Norte Water District - Citing Opinion No. 043, s of 2002, a water district formed and created under Presidential Decree No. 198 as amended, more particularly the Tagaytay Water District, does not fall under the coverage of the pertinent provisions of Title III, Chapter 2 (Share of Local Government Unit in the National Wealth) of Republic Act 7160, otherwise known as the Local Government Code 1991, as the same is not in the category of a government-owned or controlled corporation engaged in the utilization and development of national wealth. Opinion No. 043 s Tagaytay Water District - Issue of the legality of Resolution passed by a Barangay in Tagaytay City asking for a share from the water sales of Tagaytay City Water District on the basis of Local Government Code. - It is not the intention of the Legislature during its deliberations to include local water district in the coverage of Section 291 of RA The pertinent provisions of law is ambiguous, doubtful or unclear if it includes water in the term, national wealth or natural resources which must be utilized and developed.

61 4 Supplementary Appendix B Opinion No. 067 s Metropolitan Cebu Water District - Issue of legality of the demand of the DENR for immediate payment by MCWD of the Water Resource User s Fee relative to water extracted by MCWD from Buhisan Watershed Forest Reserve. - A water district, formed and created under Presidential Decree No. 198 as amended, more particularly the MCWD, is not legally obligated to pay NIPAS fees relative to the utilization and extraction of water within the Buhisan Watersheld Reserve Protected Area. Opinion No. 007 s Angat Water District - Issue of imposition upon local water districts of a franchise tax by the BIR. - The income of local water districts derived from their operation of an essential government function, as public water utility, should be excluded from gross income. - Since the income of water districts are exempt from taxation pursuant to Section 32 (B) (7) (b), Chapter VI of R.A. No. 8424, no franchise tax should likewise be imposed on water districts. Opinion No. 177 s Davao City Water District - Water districts and in particular the DCWD, is not required to pay Davao City s alleged share in the utilization and development of the national wealth pursuant to Local Government Code of Citing OGCC Opinion No. 043, d 2002, OGCC Opinion No. 150 s and OGCC letter to General Manager, Metro Iloilo Water District. Opinion No. 087 s Metro Cebu Water District - Considering that the CCPL-PAMB and the water districts are government agencies tasked to protect water resources, the former must exercise prudence when it comes to imposing the fees on the water districts. CCPL-PAMB must appreciate the fact that it would be difficult on the part of the water districts to pay for expenses which is not listed in Section 41 of Presidential Decree No. 198 on disposition of income. This provision specifically mandates where and how the income of the water districts will be spent. Notably, the enumeration in that provision does not include payment of resource user s fee to CCPL-PAMB. Opinion No. 136 s Metro Lipa Water District - A water district formed and created under Presidential Decree No. 198 as amended, more particularly the Tagaytay City Water District, does not fall under the coverage of the pertinent provisions of Title III, Chapter 2 (Share of Local Government Unit in the National Wealth ) of Republic Act 7160, otherwise known as the Local Government Code of 1991, as the same is not in the category of a government owned or controlled corporation engaged in the utilization and development of national wealth.

62 5 Supplementary Appendix B Opinion No. 041 s Metro Lipa Water District - We do not see any impediment to the district and the City of Lipa arriving at a mutually acceptable and beneficial arrangement in connection with the Sangguniang Panlungsod s request as contained in Resolution No. 217 or for the district to come out with an entirely new proposal such as the offer to extend assistance to the Office of the Sangguniang Panlungsod, Cityof Lipa. We leave it to the district s board of Directors to come out with a new or counter-proposal should it so wish and subject to its sound business judgment, pursuant to its authority to exercise and perform all powers, privileges and duties of the district under Section 17 of Presidential Decree (PD) No. 198 as amended.

63 i Supplementary Appendix C ASSESSMENT OF EXISTING WATER SUPPLY SYSTEMS IN PILOT WATER DISTRICTS 1 Metro La Union Water District Historical Background Description of Current Waterworks Facilities Water Sources Source Yield Source Water Quality Water Treatment Storage Facilities Service Connections Water Network and Operations Flow Measurement Network Operations Activity Non Revenue Water Strategy NRW Performance Water System Deficiencies Quezon Metro Water District Historical Background Description of Water Supply Facilities Water Sources Source Water Quality Water Treatment Storage Facilities Service Connections Water Network & Operations Flow Measurement Network Operations Activity Non Revenue Water Strategy NRW Performance Deficiencies of the Existing System Legazpi City Water District Historical Background Description of Waterworks Facilities Water Source Facilities Source Yield Water Treatment Service Connections Water Network Operations Flow Measurement Network Operations Activity Management Information Systems Non Revenue Water Strategy NRW Performance Deficiencies of the Existing System... 49

64 ii Supplementary Appendix C 4 Leyte Metro City Water District Introduction and History Water Sources Surface Water Groundwater Source Water Quality Water Treatment Dagami Water Treatment Plant Tingib Old WTP Tingib Rgf WTP Storage Facilities Service Connections and Coverage Network and Operations Flow Measurement Network Operations Activity Non Revenue Water Strategy NRW Performance Deficiencies of Existing System City of Koronadal Water District Introduction and History Water Sources Groundwater Surface Water Water Treatment Storage Facilities Service Connections and Coverage Water Network Operations Network Network Pressures Operations Activity Management Information Systems Non Revenue Water Strategy NRW Performance Deficiencies of Existing System... 80

65 iii Supplementary Appendix C Figures 1.1 MLUWD Water Supply System QMWD Water Supply System LCWD Water Supply System LMWD Water Supply System CKWD Water Supply System 69 Tables 1.1 MLUWD Source Facilities MLUWD Well Data Summary MLUWD Production Figures MLUWD Service Connections MLUWD - Average Water Consumption MLUWD Transmission and Distribution Network MLUWD - Non Revenue Water IWA Best Practice Standard on Revenue Water and NRW MLUWD Appararent Losses MLUWD Current Annual Real Losses MLUWD Unavoidable Annual Real Loss MLUWD Infrastructure Leakage Index QMWD - Source Faciltiies QMWD Well Data Summary QMWD Storage Facilities QMWD Service Connections QMWD Network Data QMWD Old Pipelines QMWD NRW Performance IWA Best Practice Standard on Revenue Water and NRW QMWD Appararent Losses QMWD Current Annual Real Losses QMWD Unavoidable Annual Real Loss QMWD Infrastructure Leakage Index LCWD Well Data Summary LCWD Service Connections LCWD Transmission and Distribution Network LCWD Non Revenue Water Performance IWA Best Practice Standard on Revenue Water and NRW LCWD Appararent Losses LCWD Current Annual Real Losses LCWD Unavoidable Annual Real Loss LCWD Infrastructure Leakage Index LMWD - Summary of Surface Water Source Data LMWD - Summary of Reservoir Data LMWD - Service Connections LMWD - Number of Barangays in the Service Area per City/Municipality LMWD - Transmission Pipe materials LMWD - Distribution Pipe Materials LMWD Non Revenue Water IWA Best Practice Standard on Revenue Water and NRW 62

66 iv Supplementary Appendix C 4.9 LMWD Appararent Losses LMWD Current Annual Real Losses LMWD Unavoidable Annual Real Loss LMWD Infrastructure Leakage Index CKWD Well Data Summary CKWD - Summary of Deep Well Pump Data CKWD - Service Connections CKWD - Transmission/ Distribution Facilities CKWD Non Revenue Water IWA Best Practice Standard on Revenue Water and NRW CKWD Appararent Losses CKWD Current Annual Real Losses CKWD Unavoidable Annual Real Losses CKWD Infrastructure Leakage Index 80

67 1 Supplementary Appendix C 1 METRO LA UNION WATER DISTRICT 1.1 Historical Background The water supply system of La Union Metro Water District was originally constructed in 1924 by the provincial government to serve the town of San Fernando. Cadaclan springs was the first water source but was later abandoned. In 1960, an infiltration gallery was constructed in San Gabriel municipality along Lon-oy River to a sedimentation basin and conveyed to the ground reservoir (constructed 1926) at the San Fernando Poblacion passing through the municipalities of San Gabriel and San Juan. In 1963, the San Juan municipality constructed its own system using a shallow well source pumped to a 150 cum ground reservoir (elevation 25m amsl) located within the town. In 1971, an intake dam was constructed about 12 km (280 m amsl) of Lon-oy River to supply by gravity the San Gabriel sedimentation basin. Three years later the San Juan system was interconnected to the transmission line from the sedimentation tank. In September 1974, the Metro La Union Water District (MLUWD) was formed by virtue of Resolution No. 353 of the Provincial Board of La Union encompassing the towns of San Fernando (now a city), San Juan, San Gabriel, Bauang and Bacnotan. On April 28, 1975, LWUA issued CCC No. 016 to the MLUWD. LWUA then assisted the WD from 1975 up to In 1987, two wells were constructed in Bgy. Ballay, Bauang. The town s distribution network also became interconnected to the southern part of the system of the Sn Fernando system. In 1993 and 1994 additional well sources were constructed in San Juan municipality to augment the supply in the area. In 1996, the service area of MLUWD expanded to Bacnotan which constructed a separate water system with shallow wells as sources. Water is first collected in a sump tank and pumped to a concrete ground reservoir with an elevation of 38m amsl where it flows by gravity to the town. In 2002, the WD was conditionally dissolved by its Board to pave the way for privatization processes spearheaded by the provincial government. However, the MLUWD union filed an opposition with a local court which reached the Court of Appeals. In 2008, the union case prevailed and the WD remains in control of the provision of water in the service area. The impact of the court case was that during its course there was no development of the service area, and indeed there was a major contraction in the number of connections, which affected the operability of the WD. 1.2 Description of Current Waterworks Facilities Operationally the MLWUD service area is split into two systems (Figure 1.1). The first and largest system (Sn Fernando System or System I) serves 98% of the connections of the WD in the municipalities of San Fernando City, Bauang, San Juan and San Gabriel; the second system (Bacnotan System or System II) serves the municipality of Bacnotan and accounts for the remaining 2% of the connections of the WD. Facilities consist of 8 deepwells and 10 shallow wells, pumping stations for the wells, an intake structure at Lon-oy River, a settling basin at San Gabriel, reservoirs and sump tanks, transmission and distribution networks, chlorinating facilities and booster stations.

68 2 Supplementary Appendix C Figure 1.1: MLUWD Water Supply System

69 3 Supplementary Appendix C Water Sources Water is supplied to MLUWD from a combination of spring, deep well and shallow well sources. The average production for 2008 was 134 l/s or 458 m 3 /hr. The off-take from all of the sources in January 2009 is shown in Table 1.1 this is around 20% higher than 2008 average. The water district operates and maintains one (1) surface water source with production of 41 lps, eight (8) induced infiltration wells with discharge rates ranging from lps, and ten (10) shallow wells with total withdrawal of lps (Table 1.1). Production from these sources totaled lps (12,675 cumd). Except for the surface source, which is high in color and turbidity, water quality of all the sources is good, as all parameters tested are within the permissible limits of the PNSDW. Source Table 1.1: MLUWD Source Facilities Depth - m Casing Diameter -mm San Gabriel Lon Oy spring/river intake % Baroro River Basin Deepwells Well % Well % Well % Well % Well % San Fernando Municipality Santiago Sur Shallow well no % Santiago Sur Shallow well no % Langcuas Shallow Well No % Langcuas Shallow Well No % Langcuas Shallow Well No % Langcuas Shallow Well No % Pagdalagan Norte Shallow Well % Rufina Subd Shallow Well % Bauang Municipality Bauang River Basin Deepwells Well no % Well No % Well No % Dili Shallow well, Bauang % Bacnotan Municipality Bacnotan Shallow Wells 6 Bgy Nagsaraboan bacnotan % Total % l/s Output m3/hr % of total sources

70 4 Supplementary Appendix C Lon-oy Source. MLUWD is utilizing Lon-oy River as a surface water source for the San Fernando system. The so-called Lon-oy Spring is generally referred to as a spring but is actually a stream. A weir was constructed across the stream to increase the height of the column of water. The intake is through perforated pipes laid in the stream bed. This intake is located in Sitio Lon-oy, Balbalayang is about 11 km east of San Gabriel, La Union, at an elevation 272 m. Water is conveyed via gravity to the sedimentation basin in Bgy Bumbuneg, San Juan at the rate of 41 lps. From the settling tank the supply is by gravity to San Juan, the outlet meter is not operational on the 250mm outlet main. The minimum recorded flow at the diversion site is lps (5,100 cumd). The stream excess flow measured on May 22, 2009 downstream of the weir was lps (42,823 cumd). This measurement excludes the water district and the NIA withdrawals. The flows measured on the same date at the NIA canal was lps (7,571 cumd) and lps (4,550 cumd) at the water district s sedimentation basin. Measurement made on March 31, 2009 at the sedimentation basin was lps (3,000 cumd). These measurements show lower abstraction during the dry periods. Water from this source is reportedly very turbid during heavy rains in the catchment area. Naguirangan Induced Infiltration Wells (Table 1.2). To the south of the settling tank at Baroro there are five deep wells (induced infiltration wells), of which three are currently operational. These wells supply directly into the transmission. Well Nos. 9, 10, 13, 14 and 15 were drilled in Barangay Naguirangan, San Juan, La Union about 5 km northeast of the Poblacion and about 10 km northeast of the San Fernando City proper. These wells were drilled in to meters and installed with 250 mm casings and screens. PS 09, 13 and 15 have discharges of 11.04, and 9.36 lps respectively. The combined discharge of the 5 wells is 59 lps. Well Nos. 11 and 12 were abandoned due to low yield. Test pumping records of Well Nos. 10, 13 and 15 showed transmissivity ranging from x10-3 m 2 /sec and specific capacity ranging lps/m indicating medium to very good aquifer yielding characteristics. CDM Test Well No. 3 drilled in 1976 at the northeastern bank of the Baroro River in Barangay Naguirangan, which was drilled to 36.5 meters, encountered fine to coarse sand down to 6 meters, sandy clay from 6-24 meters and another section of fine to coarse sand from meters. The section from 26 to 35m was tapped using 200 mm diameter perforated steel casing. Test pumping record showed transmissivity of 3.83 x10-3 m 2 /sec and specific capacity of 0.93 lps/m, indicating medium aquifer yielding characteristics. The physical and chemical characteristics of the water as indicated by water quality test results of CDM Test Well No. 3 are within PNSDW permissible limits. Ballay Induced Infiltration Wells. The water district presently taps the Bauang River through three (3) induced infiltration wells: Well Nos. 1, 2 and 5, all located in Barangay Ballay, Bauang, La Union about 5 km southeast of the Poblacion (or town proper) and 13 km southeast of San Fernando City proper. These wells were drilled during to meters and installed with 250 mm casings and screens. Well Nos. 2 and 3 were abandoned due to poor water quality and low yield. Test pumping records of Well No. 5 showed transmissivity of x10-3 m 2 /sec and specific capacity of 9 lps per meter of drawdown, indicating an aquifer with very good yielding characteristics. CDM Test Well No. 2, which was drilled in 1976 at the bank of the Bauang River in Barangay Bucayob opposite Well No. 5, showed transmissivity of 6.3 x10-3 m 2 /sec and specific capacity of 1.78 lps per meter of drawdown, indicating good aquifer yielding characteristics. Water quality is good as all parameters tested are within the PNSDW permissible limits.

71 5 Supplementary Appendix C Table 1.2: MLUWD Well Data Summary Well No: Location Year Depth SWL Test Q Drawdown B C Sp. Cap. T x 10-3 Ave. T x 10-3 Production Constructed (m) (m) (lps) (m) (sec/ m 2 ) (sec/ m 5 ) (lps/m) (m 2 /sec) (m 2 /sec) (lps) MLUWD 1 Brgy. Ballay, Bauang , / MLUWD 2 Brgy. Ballay, Bauang MLUWD 5 Brgy. Ballay, Bauang , MLUWD 9 Brgy.Naguirangan, S. Juan MLUWD 10 Brgy.Naguirangan, S. Juan , / MLUWD 13 Brgy.Naguirangan, S. Juan / MLUWD 14 Brgy.Naguirangan, S. Juan MLUWD 15 Brgy.Naguirangan, S. Juan (negative C-value) / MLUWD S-1 Santiago, S. FernandoCity MLUWD S-2 Santiago, S. FernandoCity MLUWD P-1 Pagdalagan, S. Fernando MLUWD L-1 Langcuas,S. FernandoCity MLUWD L-2 Langcuas,S. FernandoCity MLUWD L-3 Langcuas,S. FernandoCity MLUWD L-4 Langcuas,S. FernandoCity MLUWD R-1 Rufina Subd., SFernando 0.91 MLUWD B-1 Nagsaraboan, Bacnotan 2.10 MLUWD B-2 Nagsaraboan, Bacnotan 2.09

72 6 Supplementary Appendix C Water from these wells is pumped directly to the system via Bauang pumping station (PS) No.1 equipped with a 15-hp submersible pump with a discharge capacity of 5.55 lps and Bauang PS No. 2 and 3 which are equipped with 50-hp submersible pumps wth a discharge capacity of and lps respectively. 74 There deep well sources in the south of the area at Bauang are pumped into a sump and from there pumped into Bauang SR (service reservoir). Bauang SR is used between 5 a.m. and 8 p.m. to support flows along the 200mm main towards San Fernando. During the night-time the Bauang deep well sump is filled with shallow well water from Ballay through the 100mm PVC main (Bauang SR outlet being closed). Shallow Wells. The water district also taps groundwater through ten (10) shallow wells. Of the 10 shallow wells, 8 are in San Fernando City and two are in Bacnotan Municipality. San Fernando City: Within the San Fernando distribution there are two small shallow well sources Rufina and Pagdalagan Norte which are boosted into distribution. Two wells are located in Bgy Santiago, Santiago Sur, San Fernando City, and are equipped with 1-hp centrifugal pumps discharging 1.04 and 0.64 lps; one (1) well is in Barangay Pagdalagan, San Fernando City; four (4) are in Barangay Langcuas, San Fernando City; one (1) well is in Rufina Subdivision, San Fernando City and two (2) are in Barangay Nagsaraboan, Bacnotan, La Union. These shallow wells were drilled during to 6-18 meters and cased with GI pipes and reinforced concrete pipe culverts (RCPC), with diameter ranging mm. Production from these wells ranges lps. The four (4) wells in Bgy Langcuas are equipped with 1-hp submersible pumps discharging a total of 3 lps. Two other shallow wells, the Pagdalagan Norte and Rufina Subd shallow wells contribute a total of 1.53 lps. In addition there is a shallow well at Dili in the Bauang service area about 3 km north of the Poblacion. The well has a depth of 6 meters equipped with a 1 hp centrifugal pump discharging 2.22 lps. Bacnotan Municipality: The sources of the Bacnotan Water System consist of 2 shallow wells located in Bgy Nagsaraboan about 2 km east of the Poblacion. Each of these wells has a depth of 6 meters. One is equipped with a 1.0 hp centrifugal pump and the other is with a 1.0 submersible pump discharging a total of 4.19 lps. Water from these wells is pumped into a sump tank where a 15 hp turbine pump discharging about 4.19 lps delivers it to the service area by gravity Source Yield A LWUA team made some flow measurements of the 8 deepwell pump stations using a Portaflow flowmeter in November The LWUA measurements indicated lower production figures being used by the WD but the Portaflow measurements were made for less than hour in each pump station. In March 30-31, 2009, the study team took existing production meter readings using stopwatch. The WD figures are for the month of December As of January 2009.

73 7 Supplementary Appendix C The comparative figures are listed in Table 1.3. The figures indicate that the production figures of the WD are reliable. However, a comparison of the WD production figures in April 2008 and compared with those taken in December 2008 shows a reduction in capacity of the Lon-oy spring source.. Table 1.3: MLUWD Production Figures (a) Sources WD Figures (lps) LWUA Figures (lps) WDDSP Figures (lps) Lon-oy Spring 26.1 BDW BDW BDW SJDW SJDW SJDW SJDW SJDW (b) Sources April 2008 December 2008 Lon-oy Spring BDW BDW BDW SJDW SJDW SJDW SJDW SJDW Source Water Quality Water quality tests of all sources were taken from the WD records and in 2006, the test results show that the quality of all sources was within the PNDWS limits. For the month of December 2008, average chlorine residual levels are reflected below: San Gabriel: 0.61 ppm San Juan: 0.98 ppm San Fernando: 0.60 ppm Bauang: 0.00 Field measurements for total dissolve solids (TDS) were taken during March 2009 to determine indication, if any, of high salinity in the wells. The TDS of the wells range ppm which passes the standard of 500 ppm. Lon-oy TDS was measured at 90 ppm. Past records of the WD on water quality all show that the well WD water passes all physical and chemical parameters of the Philippine National Drinking Water Standards. The Lon-oy source is observed to be turbid during rainy days. The initial operation of some deep wells produces some sand; hence, there is a need to divert the first 10 to 30 minutes of flow from the well.

74 8 Supplementary Appendix C The MLUWD has its own laboratory, accredited by the DOH, which does bacteriological, chemical and physical tests on water. Clients include some WDs from La Union, Pangasinan and private clients from Baguio City Water Treatment The MLUWD changed from using chlorine gas for disinfection to silver ionization following a chlorine gas leak in 2004 that caused some destruction to some agriculture produce. Silver ionization equipment claims to destroy both bacteria and viruses with residual effects 75 thisis supported by the use of chlorine dioxide powder which not only provides additional disinfection and maintains a chlorine residual but is claimed by the WD to remove earth odor in some of their sources. Chlorine dioxide is a neutral chlorine compound very different from elementary chlorine, both in its chemical structure as in its behavior. At high concentrations it reacts strongly with reducing agents. The end-products of chlorine dioxide reactions are chloride (Cl - ), chlorite (ClO - ) and chlorate (ClO 3 - ). One of the most important qualities of chlorine dioxide is its high water solubility, especially in cold water. Chlorine dioxide does not hydrolyze when it enters water; it remains a dissolved gas in solution. Chlorine dioxide is approximately 10 times more soluble in water than chlorine but can be removed by aeration or carbon dioxide. Chlorine dioxide has the advantage that it produces less harmful byproducts than chlorine. Chlorine dioxide gas is used to sterilize medical and laboratory equipment, surfaces, rooms and tools. Chlorine dioxide can be used as oxidizer or disinfectant. It is a very strong oxidizer and it effectively kills pathogenic microorganisms such as fungi, bacteria and viruses. It also prevents and removes bio film. Chlorine dioxide can also be used against anthrax, because it is effective against spore-forming bacteria Viruses are eliminated in a different way; chlorine dioxide reacts with peptone, a water-soluble substance that originates from hydrolisis of proteins to amino acids. Chlorine dioxide kills viruses by prevention of protein formation. Chlorine dioxide is more effective against viruses than chlorine or ozone. For the pre- oxidation and reduction of organic substances between 0,5 and 2 mg/l of chlorine dioxide is required at a contact time between 15 and 30 minutes. Water quality determines the required contact time. For post- disinfection, concentrations between 0,2 and 0,4 mg/l are applied. Chlorine dioxide is a very effective bacterial disinfectant and it is even more effective than chlorine for the disinfection of water that contains viruses. Chlorine dioxide also removes and prevents bio film. Disinfection with chlorine dioxide does not cause odor nuisance. It destroys phenols, which can cause odor and taste problems. Chlorine dioxide is more effective for the removal of iron and manganese than chlorine, especially when these are found in complex substances. In the United States, several drinking water production companies use copper-silver ionization as an alternative for chlorine disinfection and to prevent the formation of disinfection byproducts. The standard for trihalomethanes was decreased by EPA from 100 to 80 µg/l. When copper-silver ionization is combined with chlorine disinfection, it is an excellent disinfection mechanism to deactivate viruses and bacteria. Copper-silver ionization can deactivate Legionella bacteria and other microorganisms in slow-running water and still water. Legionella bacteria are very susceptive to copper-silver ionization. Copper-silver ionization also takes care of bio film. Copper remains within the bio film, causing a residual effect. When copper and silver ions are added to water constantly, the concentration of Legionella bacteria remains low. The deactivation rate of copper-silver ionization is lower than that of ozone or UV. A benefit of copper-silver ionization is that ions remain in the water for a long period of time. This causes long-term disinfection and protection from recontamination. Copper 75 Silver ion residual ranges from 29 to 40 ppb.

75 9 Supplementary Appendix C and silver ions remain in the water untill they precipitate or absorb to bacteria or algae, and are removed from water by filtration after that. The Lon-oy surface water is treated using the San Gabriel Sedimentation Tank which has a total capacity of 2,800 cum. It is located at an elevation of 115 m in Bgy Bumbuneg, San Gabriel. For pre -treatment, the WD uses Silver-Copper Ionization equipment and the use of chlorine dioxide powder. After passing through the sedimentation tank, the water is again treated using chlorine dioxide and the use of an automatic self-cleaning Screen Filter (25 microns) Two (2) of the 3 Ballay deepwells are fitted with silver ionization equipment. Two of the 5 Naguirangan deepwells are fitted with the silver ionization equipment and one (1) which is closest to the distribution line is treated with chlorine dioxide. One (1) of the 4 Langcuas shallow wells and the Pagdalagan shallow wells are fitted with silver ionization equipments. For the Bacnotan system, the sump tank is equipped with chlorine dioxide facilities Storage Facilities The San Fernando system utilizes 4 concrete ground reservoirs, 1 elevated steel tank and 4 sump tanks. Two concrete ground reservoirs are located in the northern and southern parts of San Fernando City. The North Reservoir has a capacity of 700 cum at an elevation of 50.6 m. The South Reservoir with a capacity of 450 cum has an elevation also of 52.3 m. A 200 cum concrete ground reservoir with an overflow elevation of 30 m amsl serves Rufina Subdivision, San Fernando. A 200 cum elevated steel tank with with a bottom elevation of 32 m serves Namnama Village. The 1,000 cum Bauang concrete ground reservoir is situated on a hilly portion in Bgy Dili at elevation 49.3 m. The San Fernando system utilizes 4 sump tanks made of reinforced concrete: The Namnama Sump tank has a capacity of 4.5 cum with an elevation of 52 m amsl. The Rufina Sum tank has a capacity of 189 cum at an elevation of 52 m. The Bauang Sump Tank has a capacity of 40 cum at an elevation of 18 m. The Capitol Sump Tank has a capacity of 25 cum at an elevation of 52 m. The Bacnotan system has its own concrete ground reservoir at Bgy Nagsaraboan with a capacity of 250 cum and situated at elevation 38 m amsl. The Bacnotan Sump Tank has a capacity of 12 cum and an elevation of 22 m Service Connections As mentioned previously, the MLWUD service area is split into two discrete systems. The first and largest system serves 98% of the connections of the WD in the municipalities of San Fernando City, Bauang, San Juan and San Gabriel; the second system serves the municipality of Bacnotan and accounts for the remaining 2% of the connections of the WD. As of December 2008 there were 8,185 active service connections. System I has 7,467 domestic and 553 commercial/industrial connections. System II has 163 domestic and 2 commercial connections. All connections are metered.

76 10 Supplementary Appendix C A summary of the number of connections in MLUWD along with population and derived service coverage information is given in Table 1.4. Residents not connected to the water supply system obtain water from shallow wells which are abundant in the different towns. Based on the 2007 Census data, the average number of persons per household in the service area ranges from 5.2 to 5.4 persons per household. However, it was observed by the WD staff that many connections serve more than one household. In fact, a single dwelling unit can have more than one household. Table 1.4: MLUWD Service Connections End April 2009 San Fernando Bauang San Juan San Gabriel Bacnotan Total Active Connections Total 4,510 2, ,015 Residential 4,188 2, ,571 Total Population 116,757 70,808 35,366 16,484 39, ,794 House Occupancy Rate Population Served 19,265 13,569 3, ,648 Service coverage 16.5% 19.2% 10.1% 2.3% 2.2% 13.5% 1.3 Water Network and Operations The production of MLUWD has been relatively constant for many years now. Hoiwever, customers have been complaining of a reducing level of service indeed over this period there has been a high turn-over of customers requesting service and then disconnecting; in the order of 16,000 connections have been made over this period with only around 8,000 currently active. Consumption records of the WD were obtained from April 1997 and December 2008 for comparison purposes. The results are shown in Table 1.5 (a). The drop in average consumption is very drastic, indicating a depressed demand owing to a supply deficiency. To investigate the reported decline in level of service, consumption records of the WD were compared for and The results are shown in Table 1.5 (b). This clearly shows a decrease in average consumption per connection of over 22% compared with a growth in domestic connections of over 29%. Total production and NRW volume have remained relatively stable over the period. With NRW at around 50% there is significant scope to improve the level of service provided, through reduction of leakage losses; however, the high level of connections and disconnections over the last 12 years might also indicate that there is a problem with illegal connections. This concern was voiced also by water district staff. 76 Data taken from 1997 Feasibility Report for Metro La Union Expansion

77 11 Supplementary Appendix C Table 1.5: MLUWD Average Water Consumption System I (a) System II Domestic 21.44cum/mo cum/mo 19.32cum/mo cum/mo Commercial 56.8 cum/mo cum/mo cum/mo cum/mo Domestic Consumption m 3 /conn. Total Active Domestic Connections Year End (b) Growth in Period % 5,860 7, % Production m 3 /mth 331, , % Non Revenue Water - m 3 /mth Flow Measurement 166, , % All production sites are metered. All meters are operational with the exception of the 250mm outlet meter on the San Gabriel settling tank. There is no flow measurement within the distribution system Network Total network data (length by diameter and material) is included in Table 1.6. There is no distinction made in the table between transmission and distribution networks; however, MLUWD staff advised that transmission mains account for around 50 km and distribution mains around 88 km. Materials used within the network are steel, cast iron, PVC, ACP and GI. Service connections are GI or more recently PE or PVC. A total of 320 gate valves (50-300mm), 8 butterfly valves ( mm) and 19 check valves are incorporated in the various transmission and distribution lines; there are also 75 hydrants most of which are located mostly in the San Fernando and Bauang towns. TOTAL NETWORK Material Length (m) Table 1.6: MLUWD Transmission and Distribution Network Diameter - mm ACP 69, ,091 12,181 7,156 21, SP 4, , CCI 15, ,280 8,170 1, UPVC 44, , ,291 32, GI 1, ,204 0 HDPE 1, ,265 PE Total 138, ,371 24,994 11,859 22,800 8,291 32,872 1,424 1,265

78 12 Supplementary Appendix C (i) Transmission Network The MLUWD installed a total of km of transmission lines since the WD was created. Adding the previously installed transmission line from Lon-oy source of 12km makes a total of 50.5 km. The Bacnotan system has 1.1 km of ACP (asbestos cement pipe) transmission line while the balance of 49.4 km is at the San Fernando System. The transmission main system supplying the municipalities of San Gabriel, San Juan, San Fernando and Bauang runs through all the municipalities from San Gabriel in the north and from Bauang river in the south. In the north (from where more than 60% of the supply comes from) the transmission main proper begins at the outlet of the settling tank in San Gabriel with a 250mm diameter main. At the injection point of the Baroro deepwells the transmission splits into two 250mm mains (ACP and CCI) which then feed on to San Juan. From San Juan the two 250mm pipelines follow the main road to San Fernando (SF) supplying to the old and new service reservoirs at high level and also continuing at low level as a direct supply into San Fernando city. In the south (from where around 30% of the supply comes from) the transmission starts on the outlet of the Bauang deepwells. This is a 100mm ACP main which supplies to Bauang town proper. The transmission pipeline from Bauang to San Fernando is a 200mm ACP main. (ii) Distribution Networks Discrete distribution networks exist in San Juan; San Fernando; Bauang; and Bacnotan. The San Fernando system (System I) serves the municipalities of San Fernando, Bauang, San Juan and San Gabriel. The distribution networks of these municipalities are interconnected to each other. Pipe types used in both systems consists of PVC, ACP, centrifugal cast iron (CCI) and GI pipes with diameters ranging from 25mm to 200mm. The total length of the distribution pipelines of the 2 systems is about 100 km. There are numerous off-takes directly from transmission to individual subdivisions and compounds along the transmission main routes In San Juan the network is supplied directly from the transmission line. There is no pressure reduction into the distribution and the San Juan high level service reservoir is not being used. At San Fernando the two high level service reservoirs are operated independently. The old reservoir (no. 1) is used for fire-fighting only. The new reservoir (no. 2) is used to supply a high level area of San Fernando adjacent to the reservoir. This reservoir is filled once every two nights by closing the low level 150mm and high 200mm bypass into San Fernando proper and using the booster at the end of the 2 no. 250mm mains. The San Fernando network includes a number of small localized booster stations. The Bauang network is supplied from the deepwells along Bauang river. The transmission main feeds through the town of Bauang and on towards San Fernando. The Bauang service

79 13 Supplementary Appendix C reservoir adjacent to the Dili shallow well is utilized between the hours of 5 a.m. and 8 p.m. to supply water via the transmission to local distribution areas. The reservoir is supplied from the Dili shallow well sump which in turn is supplied from the Dili shallow wells as well as the Bauang transmission system at night time (between 8 p.m. and 5 a.m.). The Bacnotan system (System 2) serves only the municipality of Bacnotan and supplies only a total of 165 connections. The wells are pumped into a sump and water from the sump is pumped to Bacnotan SR before it gravitates into the village. The network is operated for three hours per day. (iii) Network Pressures Pressures within the transmission and distribution systems vary high pressures are maintained along the transmission line from San Gabriel to San Fernando city and, to a lesser extent, from Bauang to San Fernando. These transmission lines feed directly into distribution along the route so that within some localised distribution areas there are also very high pressures (>50m). Pressures within the distribution in San Juan are high in some areas, whilst within San Fernando City and Bauang are low to medium (5m to 30m) and vary according to elevation and time of day. This indicates that network capacity is constrained in some areas; given the reduction in connections over time, coupled with a reduction in the average consumption per connection, this indicates that the hydraulic capacity of the network is worsening (due to increased tuberculation, physical restriction due to sedimentation or poor valve knowledge, etc.) Operations Activity The two water systems of MLUWD operate on a 24-hours daily basis. In system I, water is conveyed by gravity via a 12 km transmission line from the Lon-oy intake to the San Gabriel Sedimentation Basin where it is treated. After treatment, water is conveyed to San Fernando passing through the town proper of San Juan and San Gabriel by gravity. The other major source of system 1 is provided by the five Naguirangan deepwells which pump water directly into the system, with storage at San Fernando storage reservoirs. Eight shallow wells (Santiago Sur, Langcuas, Pagdalagan and Rufina) supply additional water by direct pumping to the distribution main of San Fernando. Booster pumps are used to maintain pressure to high points of the system and to a reservoir. In Metro La Union WD, a 24-hour supply is provided to four out of the five municipalities that make up the water district. Only Bacnotan Municipality, the most northerly municipality, has intermittent supply due to shortage of water in that area and lack of connectivity with the extended network in the rest of the water district. The towns of San Gabriel and San Juan are supplied by the transmission main from the sedimentation tank. In Bauang, water from three Ballay deep wells is pumped directly into the system. During low demand, the water is boosted to the Bauang concrete ground reservoir from where it flows by gravity to the service area by gravity during peak demands. The shallow well at Dili also pumps directly into the system. The Bacnotan Water System (System II) has its own supply. Supply from three shallow wells are collected into a sump tank and then boosted into the Bacnotan concrete ground reservoir wherein it flows by gravity to the service area.

80 14 Supplementary Appendix C The WD practices regular cleaning maintenance (reservoir cleaning, meter replacement, line flushing) on a scheduled basis within the network to try and maintain hydraulic capacity and sales volume. In the order of 4% of production is used on an annual basis for flushing and other operational cleaning activity. Repair maintenance is on an as needed basis. Management of all operational activities is carried out in house by MLUWD staff e.g. meter reading, leak detection, leak repair, meter replacement, disconnections, maintenance, motor re-winding, etc. In the event of emergency works they use external contractors if they have insufficient resources to achieve the work in the required time. (i) Loss Reduction Leak Detection. Leak detection consists of passive/visible detection only; however, the ground in the MLUWD area is typically sandy soil which means that leakage tends not to surface, making visible leak detection difficult. MLUWD have some leak detection equipment; however, this isn t functioning properly and staff aren t adequately trained in its use. The difficulties of leak detection with high background noise mean that detection activities have lapsed. Leaks are repaired as soon as found and they operate a 24-hour standby service having two seven-man teams available. Illegal Connection & Consumption Reduction Activities. There is no illegal use management team in the company; illegal connections or illegal use when found is reported either by the general public or by meter readers and operation staff. When illegal connections are found the perpetrator is fined according to company policy and either regularized or disconnected. MLUWD give a reward to the person reporting the illegal connection equal to 20% of the assessed penalty. The General Manager estimated that up to 50% of the losses could be as a result of illegal connections however, a recent amnesty announced for illegal connections had little success. (ii) Customer Meter Management All customer connections within the system are metered. Meter Calibration and Replacement. There is no planned replacement of customer meters; however, when meters are identified as not working correctly either by meter reading staff or by customers, the suspect meters are tested for accuracy. The MLUWD meter management team has portable testing equipment, and if this indicates a problem the meters are taken out and either rehabilitated or scrapped. One major problem faced by MLUWD is the inclusion of fine sand within the network form boreholes in the Baroro well field. Customer meters have strainers but in spite of this some particles still pass though into the meter, affecting performance. As a result of this, MLUWD have initiated a random meter cleaning program to try and mitigate the effect; they are also considering installing sand separators to reduce the amount of sand getting into the system. For financial reasons they are now using a Chinese manufactured meters (ACE). In the past they have used Thai Asahi and Arad brands. Arad is the preferred brand of the meter management team as they can source parts locally. The results of on-site testing indicate that of meters reading outside a tolerance of +/- 5%,

81 15 Supplementary Appendix C approximately 40% are under reading and 60% are over reading this has implications for a blanket meter replacement strategy. Meter Reading, Billing and Collection. Meter reading is carried out by a team of four meter readers who operate over a day cycle. The meter reader reads the meter and reports the reading to the head office. After a period of two days the bill is delivered to the customer by the meter reader. Recording of the meter reading is done by hand and then input to the billing system at the head office. At the moment MLUWD don t have any computerized recording devices; however, there is an item in the 2009 budget to purchase some. MLUWD have payment points at the head office in San Fernando, San Juan sub office and the Rural Bank at Bauang. If payment hasn t been received after 60 days (1-month arrears plus the current period) a disconnection notice is issued and a temporary disconnection is carried out whereby the meter is plugged. Collection of delinquent accounts is carried out using roaming service collectors who visit customers directly to request payment. New Connections. The new connection process follows the model typical in most water districts. There are two staff responsible for customer connections and complaints. Applications for connection are submitted to the customer service staff who then send the application to the engineering team to survey and decide whether the connection can be supplied; if it can, they estimate the cost of the connection. The estimate is sent back to the customer service team who then notifies the customer and finalises the contract. Once payment has been received from the new customer the instruction is given to install the connection. When estimating, MLUWD give free labour for the first 15m of the connection. All materials are paid for by the customer. The average length of connection in built up areas is around 5m. This can vary a great deal in the more rural areas where service pipes can be up to 100m long. Connections are installed in the name of the owner of the property being connected and billing is made c/o the tenant. The responsibility for obtaining excavation permits for the connection installation rests with the applicant rather than the water district. People living in informal settlement areas without title can be connected by MLUWD, provided the barangay captain of the area certifies that the applicant is a known resident. Areas that don t have network can request tankers 2m 3 costs between PhP250 and 500 per tank depending on location etc.; this is cheaper than proviate. (iii) Management Information Systems Billing System. The customer billing system was purchased from and installed by Manila Techno Link (MTL) in MTL provide quarterly support visits and are able to undertake system customization as required by MLUWD. The billing system is centrally managed from the HO. GIS/Mapping System. As yet MLUWD don t have GIS; however, they have a number of different network drawings that record the location of their assets. Implementation of a simple GIS would greatly improve their ability to manage both network and customer data.

82 16 Supplementary Appendix C 1.4 Non Revenue Water Strategy MLUWD recognizes the importance of effective management of NRW. The WD Board expressed the view that it is a key concern; however, they have limited resources to manage it so they do what they can when they have the money. They are aiming to achieve the figure of 25%, but it s not clear as yet how they intend to achieve it. They also expressed the view that they should focus on the rehabilitation of the existing system before further expanding the network this appears to be a sensible approach; however, it may be possible to bring about some early reductions in NRW by focusing on operational issues: illegal connection reduction, leakage management, pressure reduction, etc. The Board are of the opinion that the AC transmission from San Gabriel to San Fernando city should be replaced as it leaking badly due to the poor quality, exacerbated by high pressures along the main the hydraulic capacity of the main is also limited due to a number of diameter restrictions along the route. For future production increases the Board believe that the spring source at Lon-Oy has additional capacity and would be a good source of additional water for expansion in the future; they were uncertain though as to the allowable off-take license granted by NWRB this should be verified during the resource planning exercise NRW Performance Management of NRW-related activities that are taking place is being carried out in-house by MLUWD staff. The MLUWD reported production and billed volume figures for 2008 were analysed to evaluate NRW performance these are shown in Table 1.7. This shows that the reported NRW for the Year 2008 was 53% with a loss volume of 2.2 million m 3. Approximately 4% of this is authorised unbilled water used for operational purposes (classed as waste on the table) this is a high figure and indicates that there are problems within the distribution system with water quality as a result of source water quality. Total billed revenues for 2008 were PhP 67.2 million which gives an average tariff across all categories of consumer of PhP 35.6/m 3. The average residential tariff was PhP 27.1 /m 3. MLUWD have comprehensive production metering with all sources metered and only one malfunctioning meter on the outlet of San Gabriel SR. The high level of NRW is thought to be a combination of leakage due to the poor condition of old mains, especially old asbestos cement mains, combined with high pressures along the transmission and into parts of the distribution; and illegal use of water as a result of the frequent connection and disconnection that has taken place over the last 12 years or more.

83 17 Supplementary Appendix C Table 1.7: MLUWD Non Revenue Water Month Production Waste Production less Waste Billed Consumption Active connections UFW UFW % NRW NRW % Jan 357,841 14, , ,027 8, , % 191, % Feb 352,168 14, , ,947 8, , % 186, % Mar 315,124 12, , ,968 8, , % 157, % Apr 361,255 14, , ,559 8, , % 208, % May 323,000 12, , ,526 8, , % 157, % Jun 358,192 14, , ,590 8, , % 199, % Jul 343,833 13, , ,538 8, , % 183, % Aug 345,535 13, , ,767 8, , % 189, % Sep 353,551 14, , ,768 8, , % 199, % Oct 300,922 12, , ,865 8, , % 149, % Nov 303,156 12, , ,403 8, , % 147, % Dec 300,299 12, , ,990 8, , % 157, % TOTAL 4,014, ,283 3,853,593 1,886,948 1,966, % 2,127, % (i) IWA Water Balance Under IWA (International Water Association) best practice standard, the components of revenue water and non-revenue water are identified as shown in Table 1.8. This standard is now well recognized across the world and provides a clear basis for discussion of NRW. Table 1.8: IWA Best Practice Standard on Revenue Water and NRW System Input Volume (corrected for known errors) Authorised Consumption Water Losses Billed Authorised Consumption Unbilled Authorised Consumption Apparent Losses Real Losses Billed Metered Consumption (including water exported) Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorised Consumption 1 Customer Metering Inaccuracies Leakage on Transmission an/or Distribution Mains Leakage and Overflows at Utility's Storage Tanks Leakage on Service Connections up to point of customer metering Revenue Water Non- Revenue Water (NRW) 1 - this includes illegal connections and illegal consumption - M Waite footnote not IWA The standard identifies three principal components of NRW: Unbilled authorised consumption; Apparent Losses; and Water losses these are discussed further below. Unbilled Authorised Consumption. Unbilled authorized use of water is very often not monitored or measured, it includes: fire fighting (typically fire-fighting flows are not billed for); operational use such as mains flushing; any other kind of unbilled use with the recognition of the water utility.

84 18 Supplementary Appendix C MLUWD quantify unbilled authorised consumption, which in 2008 was 4% of production. Apparent Losses. Table 1.9 shows an estimate of apparent losses for MLUWD based on discussions with MLUWD staff during the field visit. It must be remembered that these are estimates, and the calculation should be refined as better data become available. Table 1.9: MLUWD Appararent Losses Parameter Metro La Union Total Connections 8,015 Illegal as Percentage of Total Connections 10% Estimated Illegal Connections 802 Avge. Volume Use - m 3 /conn/yr Estimated Illegal volume/yr 188,695 Illegal volume as % of Production 4.7% Estimated Metering Inaccuracies % 5% Estimated Metering Inaccuracies - m 3 /yr 94,347 Total Apparent loss - m 3 /yr 283,042 Total Apparent loss as % of Production 7.0% Real Losses. The IWA water balance is used to determine the Current Annual Real Losses (CARL); this incorporates the values for Unbilled Authorised Consumption and Apparent losses. The 2008 data for MLUWD is shown in Table Table 1.10: MLUWD Current Annual Real Losses WATER BALANCE Metro La Union System Input Volume - m3/yr 4,014,876 Billed Authorised Consumption - m3/yr 1,886,948 Non Revenue Water - m3/yr 2,127,928 Unbilled Authorised Consumption - m3/yr 161,283 Water Losses m3/yr 1,966,645 Apparent Loss % 7.0% Apparent Loss Volume - m 3 /yr 283,042 Current Annual Real Losses (CARL) 1,683,603 Infrastucture Leakage Index. IWA have also developed a best practice standard indicator for assessing network performance: the Infrastructure Leakage Index (ILI). It allows useful comparison between systems taking into account network length as well as operating pressure. The ILI is a dimensionless ratio between the Current Annual Real Losses (CARL) derived in the section above and the losses that will always occur in the network as a function of network length, number of connections and pressure. This is known as the Unavoidable

85 19 Supplementary Appendix C Annual Real Loss (UARL) within a network and is a measure of the combined performance of leak repair, asset condition/management and the speed and quality of repairs. The calculation of UARL for MLUWD is shown in Table This is indicates that at current pressures there will always be unavoidable losses of around 55,000 m 3 /year. As pressures increase so the level of UARL will increase linearly - this is a physical consequence of improving the pressure level of service in MLUWD. The confidence in the use of UARL for systems with average pressures less than 25m may be lower than for systems with pressures 25m or greater because the assumption of a linear pressure relationship below 25m has not been tested. However as a general guide to performance it provides a useful reference. Table 1.11: MLUWD Unavoidable Annual Real Loss Metro La Union No. of connections (Nc) 8,015 Length of network (Lm in km) 138 Length of service lines (Lp in km) 48 Avge operating pressure in distribution (P in m) 15 Unavoidable Annual Real Losses (UARL) m 3 55,308 Where: UARL = (18 x Lm x Nc + 25 x Lp) x P Calculation of the Infrastructure Leakage Index for MLUWD is shown in Table In a perfectly managed system with no economic constraints the ILI should be equal to 1. The ILI for MLUWD is high, indicating that a lot of work is required on leak repair (including speed and quality) as well as asset management/replacement to improve the loss situation. It should be noted that an increase in pressure across the network to 25m would, using current statistics, increase the UARL (see section above) and thus reduce the ILI to Table 1.12: MLUWD Infrastructure Leakage Index Current Annual Real Losses (CARL) 1,683,603 Unavoidable Annual Real Losses (UARL) m3 55,308 ` Infrastructure Leakage Index (CARL/UARL) Water System Deficiencies In the course of field investigations and interviews with WD officials and local residents, notable deficiencies of the water system were identified. The main deficiencies of the MLUWD system are as follows: High transmission main pressures coupled with poor quality transmission mains. High NRW and limited supply low pressure prevails in many distribution areas. High NRW due to poor condition of AC pipes and illegal connections. Turbidity of water during rainy days at the Lon-oy water intake. Reducing capacity of the WD deep-wells over time.

86 20 Supplementary Appendix C Water Sources and Quality. During the past years from , the WD had about 16,000 connections. However, due to low pressures as well as inadequate supply or generally poor service, many customers opted to have their services disconnected. Many disconnected customers now are relying on shallow wells which are abundant in the different towns. The drop in average consumption from 1997 to 2008 is very revealing. The existing wells have observed to be declining in yield. The initial operation of some deep wells has sand; hence, there is a need to divert the first 10 to 30 minutes flow from the well. Transmission Facilities. The majority of the WD s ACP pipes should be replaced, as these pipes are causing the most leaks according to the WD s technical staff. There are 23 km of ACP, mostly connecting Lon-oy spring. At one time, Lon-oy was measured to be delivering 41 lps, while in December 2008 its measured production was only 26 lps. The ACPs were installed in 1980 or almost 30 years ago. Since San Fernando and its neighboring towns have sandy soil, leaks are not visible. Distribution Facilities. Out of 100 km of distribution pipes, 38 km are ACPs. According to the WDs, these are the pipes that cause the most breakages. Service Connections and Appurtenances. About 30% of the service connections are still using GI pipes and need to be replaced by PE tubing to reduce breakages.

87 21 Supplementary Appendix C 2 QUEZON METRO WATER DISTRICT 2.1 Historical Background The original water system of the municipalities of Lucena, Pagbilao and Tayabas was constructed in The system, which served only the downtown area of Lucena, then consisted of spring source Lalo Grande, a reservoir at Barrio Tongko, and network of C.I. and G.I. pipes. Water supply service was extended to Pagbilao and Tayabas in the 1920s. Between 1929 and 1959, five [5] additional spring sources were added to the system with the expansion and increasing water demands of the three municipalities. On May 16, 1975, LWUA awarded the Conditional Certificate of Conformance No. 017 to the WD. The construction of the integrated comprehensive water supply system actually started on July 22, The next program of the QMWD was the implementation of the Phase II Early Action Improvement Project which was intended to augment the water supply for a larger number of concessionaires. The program was completed in In 1998, the inclusion of QMWD in the shortlist of Japan Bank for International Cooperation [JBIC] for the funding of its water supply improvement projects, i.e, Package 1 and Package 2 in Lucena, Pagbilao and Tayabas, had brought the level of its expansion program to a peak. The project for Lucena City and Pagbilao Water Supply Improvement Projects amounting to PhP206M was completed in Description of Water Supply Facilities Quezon Metro Water District (QMWD) supplies water to three LGUs in Quezon Province, Luzon; these are the Municipalities of Pagbilao and Tayabas and the City of Lucena. The waterworks facilities of QMWD include (Figure 2.1): Six (6) spring sources with individual intake boxes. Ten (10) deep wells. Twelve(12) Pumping Stations. Seven(7) ground reservoirs. Two(2) collection chambers. Transmission and distribution lines, appurtenant valves and fire hydrants. 35,084 Service Connections. QMWD provides 24-hour service to its consumers. Water from spring sources are conveyed directly to the system by gravity while deep well sources, which operate on a 24-hour basis, are channeled to and impounded in the reservoirs before distribution to consumers.

88 22 Supplementary Appendix C Figure 2.1: QMWD Water Supply System

89 23 Supplementary Appendix C Water Sources Water is supplied to QMWD from a combination of spring and deep well sources. The water district obtains its water supply from six (6) springs located on the slope of Mt.Banahaw and ten (10) wells, with two (2) wells still to be commissioned. May-it Spring in Barangay Manasa, Lucban, Quezon, supplies the bulk of the water district s water requirements. The May-it Spring supplies about 710 lps (61,344 cum) while the five (5) smaller springs supply lps (9,625 cumd). The operating ten (10) operational wells have a combined capacity of 228 lps (19,700 cumd). The two (2) unused wells have combined capacity of 64 lps (5,530 cumd). Table 2.1 lists output volumes and identifies supply areas for each source. The source supplies are gravity driven and, where appropriate, break pressure tanks are installed. There is no mechanical pressure reduction within any of the three distribution areas. Table 2.1: QMWD - Source Facilities Source Output Volume Area Supplied May-it Spring 710 l/s through 3 outlets: 250mm 98 l/s 300mm 212 l/s 500mm 400l/s Pagbilao (83 l/s); Lucena (317 l/s) Ibia Spring Dapdap Spring Lalo Pequeno Spring Lalo Grande Spring 200mm l/s 200mm 25 l/s 200mm 10 l/s 150mm l/s Tayabas Deepwells No. s 1 to 10 Total capacity 252 l/s (see Table 2.2) Lucena (i) Springs Small to large capacity springs support the bulk of the water district s requirements. The springs are May-it, Ibia, Lalo Grande, Lalo Pequeno, Dapdap A and Dapdap B. Most of the springs are located west to northwest of Tayabas City at the foot of Mt. Banahaw. The springs flow by gravity to the distribution system. During the dry season, the yield of almost all of the springs declines by about 60 to 70% of their usual yield capacities. May-it Spring. May-it Spring is located at elevation 311 mamsl in Barangay Manasa, Lucban is about 5 km northwest of Tayabas City proper. The spring has a reported minimum flow of lps (62,500 cumd). 500 mm, 300 mm and 250 mm diameter steel pipes are installed at the spring intakes to convey 710 lps (61,344 cumd) of potable water to the Tongko and Pagbilao Reservoirs, with the 500 mm diameter pipe contributing 400 lps (34,560 cumd), the 300 mm diameter pipe contributing 212 lps (18,317 cumd) and the 250 mm diameter pipe contributing 98 lps (8,467 cumd). The flow on the 500 mm diameter pipe recorded on a data logger installed in Tayabas City from February 28, 2009 to March 31, 2009 showed average flow of only 175 lps (15,120 cumd), which is less than the carrying capacity of the pipe. Excess flow of the May-it Spring

90 24 Supplementary Appendix C measured on May 7,2009 was 358 lps (30,931 cumd). Further investigation is required to identify the reasons for this capacity being significantly less than design, before investment in additional transmission mains and/or deep wells is made. This is causing supply problems within the Lucena distribution area. It is very important that the reason for this anomaly is understood supply to Lucena at the rated capacity of the May-it spring would significantly reduce the need for alternative supply leading to savings in capital and operational costs. Ibia Spring. Ibia Spring is located in Barangay Lalo, Tayabas City at elevation mamsl, about 4 km west of Tayabas City proper. Spring discharge of 39.9 lps (3,448 cumd) is conveyed to Tayabas City through a 150 mm diameter pipe. Lalo Grande Spring. Lalo Grande Spring is located in Barangay Lalo, Tayabas City about 2.5 km west of Tayabas City proper. Spring discharge of 36.5 lps (3,154 cumd) is conveyed to the Lalo Reservoir through a 200 mm diameter pipe. Lalo Pequenio Spring. Lalo Pequeno Spring with discharge of about 10 lps (864 cumd) is located at elevation 377 mamsl in Barangay Lalo, Tayabas City, about 3 km southwest of Tayabas City proper. Water from the spring is conveyed to Tayabas City through a 200 mm diameter pipe. Dapdap Spring A and Spring B. Dapdap Spring A and Dapdap Spring B are located at elevations 358 mamsl and 360 mamsl, respectively in Barangay Dapdap, Tayabas City about 4 km northwest of Tayabas City proper. The springs have a combined discharge of 25 lps (2,160 cumd), which is conveyed to Tayabas City through a 200 mm diameter pipe. (ii) Wells Wells drilled in Lucena City, Tayabas City and the Municipality of Pagbilao provide water supply to recently developed subdivisions in these areas, and meet part of the water district s water requirements. A total of ten (10) wells have been drilled for the water district, while two (2) wells were turned over by private land developers to the water district. Eight (8) production wells are located in various sites in Brgys. Isabang, Bocohan,Domoit, and Mayuwi in Lucena City, while one (1) production well is situated in Brgy. Isabang in the municipality of Tayabas. Well data is shown in Table 2.2. Depth of the water district wells ranges meters, with most of the wells drilled to 150 meters. The wells were drilled during The aquifers in the area consist of coarsegrained tuffaceous sandstone intercalated with clay. The wells are installed with mm diameter casings and 200 mm diameter stainless wirewound screens. The static water levels varied meters and with test discharges of lps, drawdowns of meters were measured. Specific capacity of lps per meter of drawdown and transmissivity of x 10-3 m2/sec were determined from the tests, indicating aquifers with poor to good yielding properties. Sustainable well yields determined from the step-drawdown test vary lps. One concern expressed by the Lucena City Planning Officer was that increasing the number of deep wells in and around Lucena would increase the likelihood of land subsidence in the town in the future. Utilisation of the full output from May-it spring would remove this risk for the foreseeable future.

91 25 Supplementary Appendix C Table 2.2: QMWD Well Data Summary Well No: Year Depth Casing SWL Test Q Drawdown B C Sp. Cap. T x 10-3 Ave. T x 10-3 Production Constructed (m) (mm) (m) (lps) (m) (sec/ m 2 ) (sec/ m 5 ) (lps/m) (m 2 /sec) (m 2 /sec) (lps) Sustainable Yield (lps) QMWD x , / QMWD x QMWD x / QMWD / QMWD x , / QMWD x / QMWD x / no pump 35 QMWD x , / QMWD x , / QMWD x / 1.90 standby 30 Total Cuesta Verde 10 South Gate 3

92 26 Supplementary Appendix C (iii) Surface Water All surface water originating from the southern slopes of Mt. Banahaw flows in a NW-SE direction before emptying into Tayabas Bay. The main drainage systems in the area include the Iyam and Dumacaa Rivers. These river systems flow in a southern direction before emptying into Tayabas Bay near Lucena City. Several smaller streams, including the Ibia River, Alitao River, Malaoa River and Domoit River, drain the northeastern and flow in a southerly direction before joining the main drainage systems. The gauged rivers include the Ibia River and Dumacaa River while the smaller rivers and streams are not gauged. Ibia River. The Ibia River originates from Mt. Banahaw flowing northwest to southeast before joining Dumacaa River in Barangay Ayaas, Tayabas City. Records of flow of the Ibia River showed annual average discharge of 1,890 lps (163,296 cumd), maximum average monthly discharge of 5,090 lps (439,776 cumd) and minimum average discharge of 380 lps (32,832 cumd). At this discharge point, the drainage area is about 15 sq. km and the elevation is mamsl. Dumacaa River. The Dumacaa River is the major river system in the area. It originates from the eastern flanks of the Mt. Banahaw, with the Prinsesa River as the headwater in Barangay Manasa, Lucban, Quezon and the Ibia River, Alitao River, Malaoa River, Domoit River and the Iyam River as major tributaries. Records of flow of Dumacaa River obtained at the gauging station located in Barangay Lakawan, Tayabas, Quezon showed annual average discharge 6,730 lps (581,472 cumd), maximum discharge of 27,310 lps (2,359,584 cumd) and minimum discharge of 380 lps (32,832 cumd). At this discharge point, the drainage area is 74 sq. km and elevation is mamsl Source Water Quality The existing water quality, interms of both chemical and physical, are within the permissible limits of the Philippine National standards for Drinking Water. Water samples are taken and analyzed by a DOH accredited test laboratory. The deep wells in Lucena City produce sand grains as a result QMWD try to deliver all well water to the Cueste Verde service reservoir so that it can settle out (the reservoir is cleaned twice per year). Water quality from the spring sources is good; however, turbidity problems sometimes arise in the rainy season when surface runoff overspills into the spring chambers. This could be mitigated by flood protection. When this occurs the operators undertake additional chlorine dosing to take ensure the bacteriological quality Water Treatment All the spring and deep well sources in the present system are equipped with dosing pump hypochlorinators as water treatment facilities.

93 27 Supplementary Appendix C Storage Facilities Data on storage is shown in Table 2.3. Table 2.3: QMWD Storage Facilities Reservoir ID Location Volume (cum) Elevation (mamsl) Service Area Year of Construction New Lucena Bgy. Tongko, 4, Lucena City Reservoir Tayabas City Bocohan Reservoir Bgy. Bocohan, 2, Lucena City Lucena City Diversion Road Bgy. Ibabang 2, Lucena City 2004 Reservoir Dupay,Lucena City Pagbilao Reservoir 1 Bgy. Bukal, Pagbilao 1950 s (Dome) Pagbilao Pagbilao Reservoir Bgy. Bukal, Pagbilao Pagbilao Pagbilao Reservoir 3 Bgy. Bukal, 2, Pagbilao 2004 Pagbilao Lalo Reservoir Bgy. Lalo, Tayabas City 2, Tayabas 2005 Total 12, Service Connections A summary of the number of connections in QMWD along with population and derived service coverage information is given in Table 2.4. Table 2.4: QMWD Sevice Connections End 2008 Lucena Tayabas Pagbilao Total Active Connections Total 23,712 5,286 6,086 35,084 Residential * 21,341 4,757 5,477 31,576 Total Population 236,390 87,252 62, ,203 Population Served 106,704 23,787 27, ,878 Service Coverage 45.1% 27.3% 43.8% 40.9% This assumes an occupancy rate of 5 persons per household, and that 90% of all connections are residential The reason given for the lower service coverage in Tayabas is the more readily available supply of alternative water sources. The number of Barangays within QMWD services are as follows: Service Area Lucena City Tayabas Pagbilao Number of Barangays 25 barangays 35 barangays 14 barangays.

94 28 Supplementary Appendix C 2.3 Water Network & Operations The QMWD service area is managed as three discrete areas, each with its own staff for technical, operational and administrative activities Flow Measurement Very few of the water sources (spring or deepwell) are measured on a continuous basis. Similarly only a few of the inlets to the three distribution systems are monitored. This means that accounting for source water and water into supply from reservoirs and wells is approximate. Although reasonable estimating assumptions are being used, the variability in supply due to network dynamics is not accurately being picked up. Measurement and logging of flows is the responsibility of the production team. They have a number of ABB electromagnetic insertion probe flow meters and Radcom data loggers but the batteries of these items of equipment are no longer functioning Network The transmission and distribution network of QMWD consist of pipes of various sizes ranging from 600 to 50mm in diameter. Table 2.5 summarises the network data. A significant length of the network (147 km) has already been rehabilitated through the IIP and Package 2 projects. As of to date, there are about 41.6 kilometers of old pipelines still being utilized by QMWD. These are summarized in Table 2.6. These pipe networks are being operated as one integrated system covering the municipalities of Lucena City, Tayabas and Pagbilao. Service connections are GI or more recently PE or PVC. Table 2.5: QMWD Network Data Material Length (m) CLCC/Stl 64,665 9,380 6,073 1,039 5,190 13,307 22,812 6,864 CCI 30,550 6,550 19,500 4,500 UPVC 145, ,944 27,184 53,982 11,907 28,498 TOTAL 240,249 9,380 6,073 1,039 5,190 13,307 22,812 13,933 42,444 27,184 58,482 11,907 28,498 Table 2.6: QMWD Old Pipelines Material Length (m) CLCC 11,050 11,050 CIP 52,850 6,550 19,500 22,300 4,500 TOTAL 41,600 11,050 6,550 19,500 22,300 4,500 NB mm CIP already abandoned

95 29 Supplementary Appendix C (i) Transmission Network The available capacity of May-it spring is 710 l/s of which 500 l/s is licensed for abstraction by the National Water Resources Board (NWRB). There are three mains coming from May-it spring of 250mm; 300mm and 500mm diameter. The 500mm main is designed to deliver a capacity of 400 l/s (83 l/s to Pagbilao and 317 l/s to Tongko reservoir in Lucena). When the 500mm main was being constructed flow tests were carried out on the 250 and 300mm mains which indicated they were capable of carrying flows of 98 l/s and 212 l/s respectively. (ii) Distribution Networks There is a separate distribution network in the City and each of the Municipalities. The internal condition of the pipe network in each of the Municipalities is generally considered to be good by the QMWD operations staff. They advised that there is no furring up or tuberculation of pipelines. The results of monthly water quality analysis show that the ph of the water in the system is generally less than 7 which would indicate a slightly acid environment supporting the tuberculation advice. Tayabas network is supplied via the Lalo Ground reservoir designed on a traditional grid system. Old distribution lines and leaking service connections are still in existence in the municipality of Tayabas. Pagbilao is supplied via a 400mm outlet main from the Bukal reservoir (capacity 2,000 m 3 ). There are also two additional service reservoirs at the Pagbilao Ground reservoir site: a 300 m 3 reservoir which feeds to part of Pagbilao through a 200mm main; and a 215 m 3 reservoir which supplies the area of Bantigue. Lucena Town has the most complex network, with gravity and borehole supplies flowing into an open system. The gravity supply comes from the Tongko reservoir (supplied from Mayit spring); however, due to supply problems there is also a 200mm bypass supplying to the town proper and Barangay Cotta to the south. Within the Lucena network flows are balanced by the use of manually operated gate valves in order that reservoir levels and system pressures can be maintained throughout the diurnal period. QMWD is 100% compliant with bacteriological testing. This is carried out weekly at the sources and within the distribution at randomly sampled places in accordance with the national guidelines. (iii) Network Pressures Pressures within each of the three networks vary: - pressures in Tayabas are medium to high; - pressure in Pagbilao is generally high, the controlling reservoir head is 83 m and the network elevation is around 20 metres; problems are often encountered with mains bursts in Pagbilao; - pressures in Lucena City vary from medium to low in some areas pressures are as low as 5 psi. The reasons for this are discussed in the section above. There is no pressure control in place in any of the networks at the moment.

96 30 Supplementary Appendix C Operations Activity Management of NRW related activities is carried out in house by QMWD staff, e.g. meter reading, leak detection, leak repair, meter replacement, disconnections, etc. It was reported that some of the deep wells have a problem with fine sand exhaustion. Where possible these supplies are routed through service reservoirs which act as settlement tanks for the sand the service reservoirs are cleaned once every 6 months. There may be some areas where fine sand is making its way into the distribution system. It will be important to understand the extent of this problem as this sort of sediment can affect the accuracy of customer meters. QMWD provides 24-hour service to its consumers. Water from spring sources are conveyed directly to the system by gravity, while deep well sources which operate on a 24-hour basis are channeled to and impounded in the reservoirs before distribution to consumers. In QMWD, a 24-hour supply is achieved subject to continuity of electricity supply. When electricity supply fails backup generators are used to minimize interruptions to supply in those areas that can t be supplied by gravity. QMWD staff reported that to all intents and purposes supply is 24 hours. (iv) Loss Reduction Leak Detection. There is a small team involved in leak detection that carries out night-time sounding using electronic leak location equipment. In addition visible leak detection surveys are carried out. Illegal Connection & Consumption Reduction Activities. Within the customer service division there is a task force responsible for illegal connection detection. In 2008, 19 residential and 1 commercial illegal connections were found, none of which were legalized; during the same period 6 cases of illegal consumption were found of which 3 were resolved. (v) Customer Meter Management All customer connections within the system are metered. Meter Calibration and Replacement. QMWD have their own meter calibration facility at which they carry out meter calibration checks on an ad hoc basis as and when problems are referred to them. They do not have a planned meter replacement program in place Meter Reading, Billing & Collection. Meter reading is carried out by a team of xx meter readers following a day cycle. The meter reader reads the meter and reports the reading to the head office. After a period of 2 days the bill is delivered to the customer by the meter reader. Recording of the meter reading is done by hand and then input to the billing system at the head office. QMWD are considering the introduction of on the spot billing but as yet this has not been approved. QMWD have payment points at the local water district offices in each town. If payment hasn t been received after 60 days (1 month arrears plus the current period) a disconnection notice is issued and a temporary disconnection is carried out whereby the meter is plugged. New Connections. The new connection process follows the model typical in most water

97 31 Supplementary Appendix C districts. Applications for connection are submitted to the customer service staff who then send the application to the engineering team to survey and decide whether the connection can be supplied. If it can be supplied, they estimate the cost of the connection. The estimate is sent back to the customer service team who then notifies the customer and finalises the contract. Once payment has been received from the new customer the instruction is given to install the connection. Connections are installed in the name of the owner of the property being connected and billing is made c/o the tenant. The responsibility for obtaining excavation permits for the connection installation rests with the applicant rather than the water district. There are some informal settlement areas within the service area. Water is supplied to these by water tanker customers pay for this water at point of delivery. (vi) Management Information Systems The principal information system operated by QMWD is the bulling system. In support of this they also utilize hand held meter reading devices from which data is fed into the billing system to calculate bull values for printing. As yet QMWD are not utilizing a GIS/mapping system. Mapping records are held at the operational offices. Mapping in each of the service areas is limited to as-built drawings from construction projects. The production team has a detailed sketch of the Lucena network showing deep well sources, major pipelines and key controlling valves in the network. 2.4 Non Revenue Water Strategy The board and management of QMWD recognize the importance of effective management of NRW. They have recently issued a notice saying that they are expected to lower their unaccounted-for water to 20% by They have recently announced the implementation of a special task for force for water accounting Operation & Maintenance and Assistance Program (OMAP). The task force is focusing on the following activities: Inspection and survey of inactive customers. Routine check-up of water meters. Leak detection survey. Permanent disconnection of inactive consumers and concessionaires with illegal connections. Spot inspection and constant surveillance of suspected customers. Coordination with Barangay officials pertaining to apprehension of illegal water users. Coordination with local police in documenting and apprehending illegal water users. In addition to the above program some of the other component parts of the NRW reduction process are being addressed on a reactive basis, e.g. replacement of non-functioning meters, replacement of leaking service connections, limited mains replacement, etc.

98 32 Supplementary Appendix C NRW Performance Management of NRW-related activities that are taking place is being carried out in-house by QMWD staff. The QMWD reported production and billed volume figures for 2008 were analysed to evaluate NRW performance these are shown Table 2.7. This shows that the reported NRW for the Year 2008 was 27.7%, with a loss volume of 4.3 million m 3. Total billed revenues for 2008 were PhP m which gives an average tariff of PhP 16.1/m 3. There is an anomaly in relation to production output, especially in relation to the output from May-it spring. Month Table 2.7: QMWD NRW Performance Production - m 3 Billed Volume - Deepwell Springs Total m 3 NRW % January 512, ,807 1,308, , % February 479, ,111 1,266, , % March 462, ,506 1,233, , % April 426, ,903 1,258, , % May 547, ,549 1,311, , % June 581, ,652 1,347, , % July 585, ,536 1,265, , % August 491, ,803 1,417,900 1,035, % September 475, ,361 1,245, , % October 476, ,000 1,356, , % November 565, ,990 1,387, , % December 583, ,887 1,151, , % TOTAL - m 3 6,188,161 9,361,105 15,549,266 11,240,935 TOTAL - l/s % (vii) IWA Water Balance Under IWA best practice standard the components of revenue water and non-revenue water are identified as shown in the Table 2.8. This standard is now well recognized across the world and provides a clear basis for discussion of NRW. The standard identifies three principal components of NRW: Unbilled authorised consumption; Apparent Losses; and Water losses these are discussed further below.

99 33 Supplementary Appendix C Table 2.8: IWA Best Practice Standard System Input Volume (corrected for known errors) Authorised Consumption Water Losses Billed Authorised Consumption Unbilled Authorised Consumption Apparent Losses Real Losses Billed Metered Consumption (including water exported) Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorised Consumption 1 Customer Metering Inaccuracies Leakage on Transmission an/or Distribution Mains Leakage and Overflows at Utility's Storage Tanks Leakage on Service Connections up to point of customer metering Revenue Water Non- Revenue Water (NRW) 1 - this includes illegal connections and illegal consumption - M Waite footnote not IWA (viii) Unbilled Authorised Consumption Unbilled authorized use of water is very often not monitored or measured, it includes: fire fighting (typically fire-fighting flows are not billed for); operational use such as mains flushing; any other kind of unbilled use with the recognition of the water utility. QMWD do not as yet quantify unbilled authorised consumption. (ix) Apparent Losses Table 2.9 shows an estimate of apparent losses for QMWD based on discussions with QMWD staff during the field visit. It must be remembered that these are estimates and the calculation should be refined as better data becomes available.

100 34 Supplementary Appendix C Table 2.9: QMWD Apparent Losses Parameter Quezon Metro Total Connections 35,084 Illegal as Percentage of Total Connections 5% Estimated Illegal Connections 1754 Avge. Volume Use - m 3 /conn/yr Estimated Illegal volume/yr 562,047 Illegal volume as % of Production 3.6% Estimated Metering Inaccuracies % 5% Estimated Metering Inaccuracies - m 3 /yr 562,047 Total Apparent loss - m 3 /yr 1,124,094 Total Apparent loss as % of Production 7.2% (x) Real Losses The IWA water balance is used to determine the Current Annual Real Losses (CARL), this incorporates the values for Unbilled Authorised Consumption and Apparent losses. The 2008 data for QMWD is shown in Table Table 2.10: QMWD Current Annual Real Losses WATER BALANCE Quezon Metro System Input Volume - m3/yr 15,549,266 Billed Authorised Consumption - m3/yr 11,240,935 Non Revenue Water - m3/yr 4,308,331 Unbilled Authorised Consumption - m3/yr 0 Water Losses m3/yr 4,308,331 Apparent Loss % 7.2% Apparent Loss Volume - m 3 /yr 1,124,094 Current Annual Real Losses (CARL) 3,184,238 (xi) Infrastucture Leakage Index IWA have also developed a best practice standard indicator for assessing network performance, the Infrastructure Leakage Index (ILI). It allows useful comparison between systems taking into account network length as well as operating pressure. The ILI is a dimensionless ratio between the Current Annual Real Losses (CARL) derived in the section above, and the losses that will always occur in the network as a function of network length, number of connections and pressure. This is known as the Unavoidable Annual Real Loss (UARL) within a network and is a measure of the combined performance of leak repair, asset condition/management and the speed and quality of repairs.

101 35 Supplementary Appendix C The calculation of UARL for QMWD is shown in Table Table 2.11: QMWD Unavoidable Annual Real Loss Quezon Metro Koronadal No. of connections (Nc) 35,084 5,751 Length of network (Lm in km) Length of service lines (Lp in km) Avge operating pressure in distribution (P in m) Unavoidable Annual Real Losses (UARL) m 3 274,870 63,158 Where: UARL = (18 x Lm x Nc + 25 x Lp) x P This is indicates that at current pressures there will always be unavoidable losses of around 344,000 m 3 /year. As pressures increase so the level of UARL will increase linearly this is a physical consequence of improving the pressure level of service in QMWD. The confidence in the use of UARL for systems with average pressures less than 25m may be lower than for systems with pressures 25m or greater because the assumption of a linear pressure relationship below 25m has not been tested. However, as a general guide to performance it provides a useful reference. Calculation of the Infrastructure Leakage Index for QMWD is shown in Table In a perfectly managed system with no economic constraints the ILI should be equal to 1. The ILI for QMWD is relatively high indicating that a considerable amount of work is required on leak repair (including speed and quality); as well as asset management/replacement to improve the loss situation. It should be noted that an increase in pressure across the network to 25m would, using current statistics, increase the UARL (see section above) and thus reduce the ILI to 9.3. Table 2.12: QMWD Infrastructure Leakage Index Current Annual Real Losses (CARL) 3,184,238 Unavoidable Annual Real Losses (UARL) m3 274,870 Infrastructure Leakage Index (CARL/UARL) Deficiencies of the Existing System During field investigations and interviews conducted with the officials of the WD, the following issues and problems were identified: The existing transmission lines coming from May-it do not attain its full design carrying capacity resulting in inadequate supply. The estimated supply from May-it spring based on 2008 records of production is only about 200 to 210 L/s. Regular operations and adjustment of the valves to regulate flow and pressure in the system. However even with the valving scheme being implemented, the adequate flow and pressure could not be attained. High pressures can only be

102 36 Supplementary Appendix C experienced when the level of water in the reservoir is high. There are old distribution lines and leaking service connections in Tayabas, (there is an on-going pipe rehabilitation in Tayabas which might improve the condition of the pipes after its completion). In Lucena City, there are some fire hydrants with visible leaks. Not all sources and reservoirs have flowmeters to monitor inflow and outflow of water. At present, the WD is adopting the volumetric method of measurement to account total water production. The pressures in Pagbilao are normally high as it is controlled by the reservoir elevation, causing frequent pipe burst-thus causing also frequent water service interruption. Lack of detailed understanding of networks hydraulics operations are very reactive. Knowledge in water system operations with the aid of computer programs for hydraulic models and simulation may enhance performance of the system as this would allow operations staff to understand more the dynamics of the system and make necessary adjustments in the field.

103 37 Supplementary Appendix C 3 LEGAZPI CITY WATER DISTRICT 3.1 Historical Background The original system was constructed in 1921 by the provincial government. Legazpi City Water District was formed on July 16, 1981 and was issued Conditional Certificate of Conformance No. 175 on December 16, A major improvement of the existing system was completed in 1988 financed by DANIDA and LWUA. The project included the drilling of four (4) wells at Bonga and Mabinit, transmission and distribution pipelines, hydraulic control structures, reservoirs, service connections, treatment facility and leak detection (Figure 3.1). Before the November 2006 devastation of typhoon Reming in the Bicol region, the existing facilities of LCWD consisted of the following: Ten (10) springs, each provided with either intake box or collector canal. Seventeen (17) wells, each provided with submersible pumps. Pumping stations, chlorinator stations and fiberglass filter tanks at Barangay Bigaa. Chlorinator at Kapungulan, Ayala and Bogtong springs and chlorinator station underneath Yawa bridge in Barangay Rawis. Water production facilities and hydraulic control structures at Bgys. Bonga and Mabinit. Nine (9) reservoirs (concrete ground reservoirs, elevated concrete reservoirs and elevated steel reservoirs). Transmission and distribution pipelines. Sump tank at Pambansang Bagong Nayon (PBN) equipped with 50Hp horizontal pump. 16,936 service connections (current). In 2006 the Bicol region was devastated by typhoon Reming; the impact on Legazpi City and the sources and assets of LCWD was very serious. After typhoon Reming, all existing wells and spring sources were affected, especially the discharge capacity of spring sources and the deterioration of water quality of well sources, although there was no document available at LCWD assessing the extent of damage to the water sources. In the conduct of site inspection of the existing sources during May 2009, it was noted that the intake boxes and collector canals of the springs were partially damaged, but the significant observation is the diversion of water flow of the spring sources. Only about 5% of the original discharge is collected in the intake box and collector canal; 95% of the discharge became surface water. The well sources are still in place, including the submersible pumps and the hydraulic control structures, and being maintained by LCWD. From November 2006 up to February 2008, LCWD continued the utilization of these water sources despite the reduction of the discharge rate of the spring sources and the deterioration of the water quality (high iron content and total dissolved solids) of well sources. It should also be noted that all of these sources are within the 11km danger zone radius of the Mayon volcano.

104 38 Supplementary Appendix C Figure 3.1: LCWD Water Supply System

105 39 Supplementary Appendix C In March 2007, LCWD entered into a 25-year build-operate-transfer (BOT) contract with Phil Hydro for the supply and delivery of 20,000 cubic meters per day of bulk water to the system of LCWD. The delivery of bulk water to LCWD started in March Phil Hydro withdraws approximately 30,000 cubic meters from the river, and supplies around 16,000 to 20,000 cum to LCWD after treatment. 3.2 Description of Waterworks Facilities Water Source Facilities The present water sources of the water district are groundwater through wells and springs, and surface water. Current supply is mainly from a surface water source, with the wells serving as back-up sources only. Springs. Small to large capacity springs exist in the southern slopes of Mayon Volcano. A total of ten (10) individual and group of springs with combined discharge of lps (11,821 cumd) used to support part of the water demands of the water district. The springs are located at an elevation of mamsl. These springs used to serve the northeastern barangays extending to the Port of Legazpi City. Typhoon Reming in 2006 destroyed some of the spring boxes and most of the collector canals. Significant reduction of spring flows was observed after the typhoon and new springs were observed in the area. At present only six (6) of the springs are being used to support the water requirements of about 1,000 households in Barangays Upper Arimbay, Bigaa and Bagong Abre. Wells (Table 3.1). The water district owns and operates a total of nineteen (19) wells in Barangays Bogna, Mabinit, Bigaa and Banadero. Eleven (11) of the nineteen (19) wells were drilled in Barangay Bogna, some 5 kms north of the city proper. The wells are located at the southeastern slopes of Mayon Volcano at elevation of about 90 mamsl. The wells were drilled in to uniform depth of 25 mbgl. Some of the wells were re-drilled in 2003 to meters. The wells penetrated alternating layers of fine to coarse sand and boulders as described from the wells lithologic logs. Static water level varies mbgl and with test discharge of lps, drawdown varied meters. Specific capacity varied lps per meter of drawdown while transmissivity varied x10-3 m2/s, indicating aquifers with medium to very good yielding properties. Except for one (1) well which was abandoned due to poor yield, the wells were utilized with discharge rates ranging from lps. Nine (9) of the wells are installed with 10 Hp submersible pumps while one (1) well is installed with a 7.5 Hp submersible pump. Withdrawal from the wells in 2006 totaled lps (10,623 cumd). Four (4) of the operational wells showed poor water quality, with iron concentration ranging mg/l. Six (6) wells were also drilled in in the Mabinit Wellfield, about a kilometer west of the Bogna Wellfield. The wells were originally drilled to 25 meters, with three (3) of the wells re-drilled to meters in The wells penetrated alternating layers of fine to coarse sand and boulders as described from the wells lithologic logs. Static water level varied mbgl and with test discharge of lps, drawdown varied meters. Specific capacity varied lps per meter of drawdown, while transmissivity varied x10-3 m2/s, indicating aquifers with good to very good yielding properties.

106 40 Supplementary Appendix C Table 3.1: LCWD Well Data Summary Well No: Depth (m) SWL (m) Test Q (lps) Drawdown (m) Sp. Cap. (lps/m) T x 10-3 (m 2 /sec) B (sec/ m 2 ) C (sec/ m 5 ) Iron (mg/l) TDS (mg/l) Capacity (lps) Remarks Bogna Well No ,667 Nil (MDL=.02) Stand by Bogna Well No ,333 Nil (MDL=.02) Stand by Bogna Well No Abandoned Bogna Well No , Stand by Bogna Well No Nil (MDL=.02) Stand by Bogna Well No Nil (MDL=.02) Stand by Bogna Well No Stand by Bogna Well No Nil (MDL=.02) Stand by Bogna Well No , Stand by Bogna Well No Stand by Bogna Well No Stand by Mabinit Well No Stand by Mabinit Well No Nil (MDL=.02) Stand by Mabinit Well No , Stand by Mabinit Well No Abandoned Mabinit Well No Stand by Mabinit Well No , Stand by Banadero Well No Hours Operation Bigaa Well No Stand by

107 41 Supplementary Appendix C One (1) well was abandoned due to poor yield and poor water quality. The remaining five (5) wells are installed with Hp submersible pumps. Total withdrawal from the five (5) wells in 2006 was lps (4,244 cumd). Two (2) of the wells showed poor water quality, with iron concentration ranging mg/l. Mabinit Well No. 5 showed total dissolved solids of 840 mg/l, which exceeds the PNSDW s permissible limit of 500 mg/l. Barangay Banadero Well was drilled in 1960 to 73 meters with 200 x 150 mm steel casings from surface to 55 meters and open hole down to 73 meters. The well is equipped with 7.5 Hp that produces 1.06 lps. The well currently operates for 6 hours daily. Barangay Bigaa Well was drilled in 1995 to 25 meters and installed with 250 mm steel casings and wirewound screens. The well was installed with 7.5 Hp submersible pump that produced lps. The well serves as stand-by source. Barangay Taysan Well was drilled in 2005 to 41 meters and installed with 125 mm diameter casings. During testing after well completion, static water level was measured at 8 mbgl and with withdrawal of 5.88 lps, the water level dropped to 12 meters. At present, the well is installed with 5 Hp submersible pump. The well is being operated and maintained by the city government and supplies the water requirements of some of the households in the barangay. A geo-resistivity survey carried out by LWUA in 2006 showed potential aquifer in the Bogna and Mabinit Wellfields down to meters. Resistivity values of ohm-meters correspond to alternating layers of fine to coarse sand and boulders, which is the main aquifer section in the area. These results indicate that the existing wells in the Bogna and Mabinit Wellfields are partially penetrating the potential aquifer section. Surface Water. There is a single surface water source for Legazpi: the Yawa River. The source of the bulk water supply through a bulk water supply contract with Philippine Hydro, Inc is the Yawa River. The intake and WTP is located to the west of Legazpi airport and within the city proper outside the Mayon Volcano danger zone. The raw water is treated using a high rate permanent media filtration system. The capacity of the existing plant is 30,000 cumd with current production at 18,500 20,000 cumd. The Yawa River has no historical flow records. During the Bicol River Basin Development Project (BRBDP) study in , daily staff gauge readings were made about 1 km upstream from the bridge along the Legazpi Tabaco National Road. Extreme minimum flow of 655 lps (56,592 cumd) and extreme maximum flow of 80,680 lps (6,970,752 cumd) were recorded on November 8, 1984 and November 19, 1983, respectively. The flow of the Yawa River was also measured on October 1, 1985 during the preparation of the water supply feasibility study for the Legazpi City Water District by Kampsax-Kruger. The measured flow was 2,235 lps (193,104 cumd). The river has an annual mean flow rate of cubic meters per second (cu.m/s) recorded from 1980 to1988 (DPWH-BRS statistics). Phil Hydro is currently extracting around one third (1/3) of the average yield of the river. The Yawa River stream flow was measured by WATCON, Inc. on August 30, The flow of the Yawa River was calculated at 2,800 lps (241,920 cumd). Results of the frequency analysis indicate extreme minimum flow of 291 lps (25,142 cumd) while mean monthly flow of 1,060 lps is available 100% of the time for a 19-year period of observation. With 80 per cent of minimum flow as limit of extraction, the maximum volume that can be withdrawn from the Yawa River is 848 lps (73,267 cumd). With the provision of bulk water, LCWD abandoned the operation of the existing sources (LCWD still considers these sources as standby facilities) except for the spring sources at

108 42 Supplementary Appendix C Barangay Buyuan which were retained to supply the water needs of about 1,000 service connections at Barangay Bigaa Source Yield The present average consumption of LCWD is about 18,500 cubic meters per day, although the trend of consumption is increasing according to the records of sales of Phil Hydro. The current water rate of bulk water is PHP per cubic meter. After the concession period, LCWD has the option to take over the operation or extend/renew the current BOT contract Water Treatment In March 2007, LCWD entered into a 25 year Build Operate and Transfer (BOT) contract with Phil Hydro for the bulk supply of 20,000 cubic meters per day of treated water to the system of LCWD. The delivery of water commenced in March Water is withdrawn from the river to an intake basin where aluminium sulphate and polyelectrolyte are added to aid flocculation. Raw water is pumped around 50m from the intake basin to the water treatment plant pressure filter gallery situated on the hillside adjacent to the Yawa River. Garnet high rate pressure filters are used to remove particles from the water. Chlorination takes place on the outlet of the filters, a series of chlorine generators are installed that take salt and separate the chlorine; chlorination has also to be topped up with sodium hypochlorite before discharge to the network. Phil Hydro have to maintain output water quality to PNSDW standards. The outlet pressure at the WTP should be no lower than 35 psi (25m), with the WTP at an elevation of 40m the total head on the system is 65 metres which is around 25 metres higher than the pressure previously provided from the deep well sources this has implications for NRW which are discussed later. The treated water outlet main is connected some 3 km from the WTP to the existing 300mm diameter transmission pipe line from the Bonga well field. Downstream of the interconnection point there is an inline chlorine booster to ensure sufficient residual chlorine in the distribution network. Phil Hydro has the capacity to produce 30,000 m 3 /day. The present average consumption of LCWD is about 18,500 m 3 /day although the trend of consumption is increasing according to the records of sales of Phil Hydro. The current water rate of bulk water is PHP 13.50/ m 3. On conclusion of the concession period, LCWD has the option to take over the operation or extend/renew the current BOT contract. Following the commissioning of the bulk water supply, in order to maximize the supply from the new WTP, LCWD stopped the operation of the existing sources keeping them as standby in the event of problems at the WTP, with the exception of the spring sources at barangay Buyuan which were retained to supply the water needs of about 1,000 service connections at barangay Bigaa Service Connections Legazpi City Water District (LCWD) supplies water to Legazpi City Municipality. A summary of the number of connections in LCWD, along with population and derived service coverage

109 43 Supplementary Appendix C information is given in Table 3.2. As of May 2009, LCWD has a total of 16,934 service connections covering 53 barangays.this assumes an occupancy rate of 6 persons per household. Table 3.2: LCWD Service Connections Active Connections Legaspi City Total 16,934 Residential 15,791 Total Population 182,909 Population Served 94,746 Service Coverage 52% 3.3 Water Network Operations Flow Measurement Production flows from the spring source and the bulk supply provided to LCWD are metered with mechanical meters; however, there is no other macro level flow measurement of the transmission mains or within the distribution network itself. This makes effective understanding of the distribution of water very difficult and is a barrier to identifying losses within the transmission and distribution networks Network Details of the transmission and distribution network are given in Table 3.3. All lengths are in metres. Table 3.3: LCWD Transmission and Distribution Network Material PVC 1,570 9,460 2,342 46,870 14,206 34,830 38,650 61,910 Steel PE 1,570 9,760 2,342 47,270 14,306 34,830 38,650 61,910 (i) Transmission Network The existing transmission main network was originally designed to bring deep well water from the north of the supply area to the town, supplying population along the route. However, with the introduction of the new supply from the WTP towards the end of the original transmission closer to the town, the configuration and capacity of the network needs to be reevaluated, and upgrading of transmission mains from the deep well field may be required to allow adequate supplies to be fed back along the transmission mains to supply properties in the vicinity of the deep well field source this is something that LCWD are aware of and are considering the installation of a 300mm main from the deep well source to the Rawis area. (ii) Distribution Network As stated earlier the distribution network was replaced and extended in the 1980s in PVC, with steel used for bridge crossings. The condition of the network is generally considered to

110 44 Supplementary Appendix C be good, although since the commissioning of the bulk supply, pressures in the system have increased and there has been an increase in the level of NRW from around 12% to 21% as a result. Although the level at around 21% also indicates that there probably aren t serious problems with mains condition there is definitely a need to understand the distribution of flow and demand within the network in order to target operations work, and perhaps limited investment to the areas of greatest need. Water from the bulk supply interconnection splits north along the original transmission main towards the Bonga area where it balances against the spring source supply around the Rawis area; however, the majority of the water feeds south towards Legazpi and Albay areas. The southern-most part of the network is a hilly area and LCWD have two booster systems in place the first to supply water to the Buraguis area, and the second to boost water to the EMS Barrio area. The Buraguis booster is operated from 12 noon to 12 midnight and supplies a storage reservoir which feeds the Buraguis area by gravity. Control of the booster is manual based on the level of the Buraguis reservoir water level; this can lead to overflow. The EMS Barrio inline booster pump is operated from 6 a.m. to 11 a.m. to supplement peak hour flow supply to this area is intermittent LCWD have plans to install a new 200mm main in the southern area to allow higher level areas to receive 24-hour supply. At the moment there is no metering within the distribution network to determine the amount of water going in any direction. As currently operated, the system could be split into around 6 distribution areas, approximately as follows: Buraguis pumped supply area; Legazpi southeast; Legazpi south west; Bonga; spring area; and coast central area. For management purposes the network is split into two areas: Old Albay district and Legazpi Pier district. The operation of the network is quite finely balanced; there are a number of control valves used to control supplies between high level and low level areas the control mechanisms and settings are well understood by the operations team. Electrical power is very consistent in 2008 there were only 10 outages, all of short duration. LCWD do have back up generation though, for the deep well sources as well as Buraguis booster. The WTP has back up power for full capacity. (iii) Network Pressures Following interconnection of the WTP supply in February 2008, pressures in the system increased by around 15 to 20 metres. This will have caused a change in the flow distribution pattern around the network and will probably have caused sediment within the network to have been disturbed this may be borne out by the complaints of poor water quality in certain areas. If water quality complaints continue, a flushing/swabbing program may help to improve the situation. The opportunity for pressure reduction in Legazpi network is limited given the geographical layout of the network; however, there may be some opportunities in limited areas Operations Activity Management of all operational activity is carried out in-house by LCWD staff, e.g. meter

111 45 Supplementary Appendix C reading, leak detection, leak repair, meter replacement, disconnections, etc. (iv) Loss Reduction Leak Detection. No active leak detection is carried out by LCWD; there is no team dedicated to leak detection activity and only visible leaks are dealt with. LCWD have a Fuji electronic listening device; however, it is not operational. Visible main leaks average around 2 per month; repair of leaks is carried out by in-house staff. Around 20 minor service line leaks are found per day these are repaired in house. Repair of leaks is carried out by LCWD staff. Leaks are recorded in a log book but this is not computerized or linked to the mapping system in any way. Illegal Connection and Consumption Reduction Activities. There is no team dedicated to the reduction of illegal use, be it illegal consumption or illegal connection, preferring instead to rely on reports from meter reader readers and the general public. When found, illegal users are fined, with a minimum penalty of PhP 2,000 penalty plus the assessed volume of usage during the illegal connection period. LCWD offer an incentive to people who report illegal activity the incentive is equal to 70% of the fine paid to LCWD and is paid on receipt of the fine by LCWD. Illegal use of water is not considered to be a serious problem by LCWD. (v) Customer Meter Management All customer connections within the system are metered. Meter Calibration and Replacement. LCWD have a hands-on approach to customer meter management. All meters are replaced annually on a rolling program. Meters that are taken out are tested to check their accuracy; if they are working correctly they are cleaned and stored for re-introduction under the program; if they are out of calibration they are refurbished and recalibrated where possible; if they cannot be re-calibrated they are scrapped and new meters purchased to replace them. Meters are colour coded so that old and newly replaced meters can be easily distinguished in the field. The system appears to work well. The preferred meters are ARAD due to the availability of spare parts and the ease of repair and refurbishment. Within the network there are also Aquajet, Jensen, and Ace meters. Meter Reading, Billing and Collection. LCWD have 10 meter readers, for the last 5 years they have been using on the spot billing and are equipped with psion organizers and handheld printers. Meter readers report any meter problems daily and the maintenance section carries out the necessary replacement on an ad hoc basis. The only payment facility is at the water district office in Legazpi. If customers don t pay within 60 days they are temporarily disconnected by locking the meter inlet valve. If no p[ayment has been received after a further 3 weeks they are permanently disconnected at the main. New Connections. Applications for new connection are made to the commercial section of the water district. An engineering survey is carried out; if the distance from the main to the house is greater than 30m the connection is discouraged. A number of customers have

112 46 Supplementary Appendix C pumps with which they lift water to roof top storage this is allowed by LCWD. There is a minimum connection charge of PhP 3,500, which includes a registration fee of PhP 1,500. Currently the customer has to apply to the city council for the excavation permit, if required. LCWD are currently discussing the idea of a general permit with a bond to cover all excavation requirements of the water district this is likely to be implemented soon and will save a lot of time for LCWD, the city government and future customers. Within squatter areas individual connections are allowed but meters are clustered outside of the squatter area for ease of access and to control losses within the area Management Information Systems GIS/Mapping. LCWD have digitized their network data onto AutoCad. As yet they don t have a full GIS. Billing. The billing system for LCWD has been developed for LCWD by consultants and is customized as required to suit the needs of LCWD. The consultants provide regular operational and programming support to LCWD. Customer Management. A stand-alone customer complaint system is in place. This has been developed by LCWD and is amended as required. 3.4 Non Revenue water Strategy LCWD are aware of the need to maintain control of NRW and are concerned by the increase in NRW that has occurred since the commissioning of the WTP, especially given the cost of the bulk water. The proactive meter management strategy is a direct result of this concern. Other operational measures such as district metering, leakage management and illegal use management do not currently appear to be given a high priority, perhaps due to the upfront investment requirement for metering and leakage management equipment NRW Performance Management of NRW related activities that are taking place is being carried out in-house by LCWD staff. The LCWD reported production and billed volume figures for 2008 were analysed to evaluate NRW performance; these are shown in Table 3.4. This shows that the reported NRW for the Year 2008 was 21.2%, with a loss volume of 1.1 million m 3. Total billed revenues for 2008 were PhP million which gives an average tariff across all categories of consumer of PhP26.26/m 3. The average residential tariff was PhP 22/m 3. All LCWD sources are metered, the principal source currently being the bulk water supply from the Yawa river source.

113 47 Supplementary Appendix C Table 3.4: LCWD Non Revenue Water Performance 2008 Production - m 3 Water Consumed - m 3 NRW Deepwell Spring New WTP Total Billed Unbilled Total Volume m 3 NRW Jan 278, , , ,084 12, ,688 35, % Feb 182, , , , ,314 12, ,350 72, % Mar 53, , , , ,168 7, , , % Apr 66, , , , ,255 10, , , % May 27, , , , ,529 15, ,277 41, % Jun 33,047 46, , , ,652 5, ,593 94, % Jul 45,496 6, , , ,062 6, , , % Aug 22,191 47, , , ,305 10, ,385 38, % Sep 25,690 52, , , ,670 9, ,004 84, % Oct 32, , , , ,292 1, , , % Nov 70, , , , ,927 1, , , % Dec , , ,164 2, , , % 836,999 1,064,978 3,759,812 5,661,789 4,462,422 94,963 4,557,385 1,104, % IWA Water Balance. Under IWA best practice standard the components of revenue water and non-revenue water are identified, as shown in Table 3.5. This standard is now well recognized across the world and provides a clear basis for discussion of NRW. The standard identifies three principal components of NRW: Unbilled authorised consumption; Apparent Losses; and Water losses these are discussed further below. Table 3.5: IWA Best Practice Standard on Revenue Water and NRW System Input Volume (corrected for known errors) Authorised Consumption Water Losses Billed Authorised Consumption Unbilled Authorised Consumption Apparent Losses Real Losses Billed Metered Consumption (including water exported) Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorised Consumption 1 Customer Metering Inaccuracies Leakage on Transmission an/or Distribution Mains Leakage and Overflows at Utility's Storage Tanks Leakage on Service Connections up to point of customer metering Revenue Water Non- Revenue Water (NRW) 1 - this includes illegal connections and illegal consumption - M Waite footnote not IWA Unbilled Authorised Consumption. Unbilled authorized use of water is very often not monitored or measured, it includes: fire fighting (typically fire-fighting flows are not billed for); operational use such as mains flushing; any other kind of unbilled use with the recognition of the water utility. LCWD currently quantify/record unbilled authorised consumption. Apparent Losses. Table 3.6 shows an estimate of apparent losses for LCWD based on discussions with LCWD staff during the field visit. It must be remembered that these are

114 48 Supplementary Appendix C estimates and the calculation should be refined as better data becomes available. Table 3.6: LCWD Apparent Losses Parameter Legaspi City Total Connections 15,791 Illegal as Percentage of Total Connections 2% Estimated Illegal Connections 316 Avge. Volume Use - m 3 /conn/yr Estimated Illegal volume/yr 89,248 Illegal volume as % of Production 1.6% Estimated Metering Inaccuracies % 2% Estimated Metering Inaccuracies - m 3 /yr 89,248 Total Apparent loss - m 3 /yr 178,497 Total Apparent loss as % of Production 3.2% Real Losses. The IWA water balance is used to determine the Current Annual Real Losses (CARL), this incorporates the values for Unbilled Authorised Consumption and Apparent losses.the 2008 data for LCWD is shown in Table 3.7. Table 3.7: LCWD Current Annual Real Losses WATER BALANCE Legaspi City System Input Volume - m3/yr 5,661,789 Billed Authorised Consumption - m3/yr 4,462,422 Non Revenue Water - m3/yr 1,199,367 Unbilled Authorised Consumption - m3/yr 94,963 Water Losses m3/yr 1,104,404 Apparent Loss % 3.2% Apparent Loss Volume - m 3 /yr 178,497 Current Annual Real Losses (CARL) 925,907 Infrastucture Leakage Index. IWA have also developed a best practice standard indicator for assessing network performance, the Infrastructure Leakage Index (ILI). It allows useful comparison between systems taking into account network length as well as operating pressure. The ILI is a dimensionless ratio between the Current Annual Real Losses (CARL) derived in the section above and the losses that will always occur in the network as a function of network length, number of connections and pressure. This is known as the Unavoidable Annual Real Loss (UARL) within a network and is a measure of the combined performance of leak repair, asset condition/management and the speed and quality of repairs. The calculation of UARL for LCWD is shown in Table 3.8. This is indicates that at current pressures there will always be unavoidable losses of around 171,000 m 3 /year. As pressures

115 49 Supplementary Appendix C increase so the level of UARL will increase linearly this is a physical consequence of improving the pressure level of service in LCWD. The confidence in the use of UARL for systems with average pressures less than 25m may be lower than for systems with pressures 25m or greater because the assumption of a linear pressure relationship below 25m has not been tested. However, as a general guide to performance it provides a useful reference. Calculation of the Infrastructure Leakage Index for LCWD is shown in Table 3.9. In a perfectly managed system with no economic constraints the ILI should be equal to 1. The ILI for LCWD is quite low indicating that the network is in a reasonable condition; however, that said, further work is required on leak repair (including speed and quality), as well as asset management/replacement to improve the infrastructure condition. Table 3.8: LCWD Unavoidable Annual Real Loss Legaspi City No. of connections (Nc) 15,791 Length of network (Lm in km) 211 Length of service lines (Lp in km) 95 Avge operating pressure in distribution (P in m) 25 Unavoidable Annual Real Losses (UARL) m 3 171,479 Table 3.9: LCWD Infrastructure Leakage Index Current Annual Real Losses (CARL) 925,907 Unavoidable Annual Real Losses (UARL) m3 171,479 Infrastructure Leakage Index (CARL/UARL) Deficiencies of the Existing System Pressure distribution. It is to be assumed that the existing transmission and distribution network was designed and constructed in 1981 in consideration of the distance and location of the previous wells and spring sources that will dictate the sizes of pipelines, capacities and location of storage facilities and the capacities of pumping facilities. With the introduction of bulk water to the system, it is necessary to conduct hydraulic analysis of the pipe network and reconfigure the pipe sizes and pressure distribution of the existing system using the recommendation of the hydraulic analysis report. The system is 28 years old (constructed in 1981 and major improvement in 1988). There is a need to conduct a thorough inspection of the facilities, especially the transmission/distribution pipelines and appurtenances. It was identified that northwest of the present service area is experiencing low pressure during peak hours. Poor water quality. Several complaints have been filed in LCWD regarding the poor water quality distributed to the concessionaires. Since treated water is monitored and approved at the bulk water treatment plant, it can be concluded that water is contaminated as it passes the distribution network. As outlined in paragraph 260 above this is likely to be related increase in pressure within the network following commissioning of the bulk water source and

116 50 Supplementary Appendix C may require some remedial swabbing/scouring activity to improve the internal network condition.

117 51 Supplementary Appendix C 4 LEYTE METRO CITY WATER DISTRICT 4.1 Introduction and History Leyte Metro Water District (LMWD) supplies water to eight LGUs in Leyte Province; these are Tacloban City, and Dagami, Palo, Pastrana, Santa Fe, Tabon-Tabon, Tanauan and Tolosa Municipalities. The main raw water source is surface water/ rivers from the ridge of hills some 20 km west of Tacloban City. The Hiabangaan River and Hitumnog sources were first tapped in 1934 and supplied Tacloban City directly by gravity pipeline. In 1964 a sedimentation basin water treatment plant was constructed in Dagami at an elevation of 152m amsl, with a capacity of 200 m 3 /hr. The Tingib WTP is supplied via the Binahaan river it was constructed in the 1980s. 4.2 Water Sources More than 98% of the water supply for LMWD comes from high level surface water sources to the west of the service area. Less than 2% of the water supply is from localised well sources one in the south of the supply area the other in the north of the supply area Surface Water There are three (3) surface water sources of LMWD: the Binahaan River, the Atipulo/ Magculo/ Maitom creeks, and the Hiabangan River/ Hitumnob creek. Ogee dams and raw water transmission pipelines are provided to collect and convey water respectively from these sources. Table 4.1 shows the discharges of the treated water as per Production Annual Report of 2008 of the LMWD. Locations are shown on Figure 4.1. Binahaan River. The Binahaan River is the major water supply source of the water district. Approximately 305 lps (26,400 cumd) is supplied from the rapid infiltration plant located within the boundary of Barangay Tingib, Pastrana, Leyte and Barangay Hibunawon, Jaro, Leyte. The water district has secured water rights from the National Water Resources Board (NWRB) for withdrawal of 1,000 lps (86,400 cumd) from the river, with the intake located upstream of the existing rapid filtration plant. Flow measurements made by Angel Lazaro and Associates on September 19, 1990 and November 27, 1990 for the Feasibility Studies and Detailed Design under the 72 Provincial Areas Water Supply Project of LWUA showed flows of 3,023 lps (261,187 cumd) and 11,687 lps (1,009,757 cumd), respectively. The minimum discharge of the river was determined at 2,545 lps (219,888 cumd). The drainage area at the measuring station is approximately 113 sq km. Table 4.1: LMWD - Summary of Surface Water Source Data Surface Water Source Location Discharge (lps) 1. Atipulo / Magculo/ Jaro, Leyte 33 Maitom creeks 2. Binahaan River Jaro, Leyte Hiabangan River/ Dagami, Leyte 73 Hitumnog creek

118 52 Supplementary Appendix C Figure 4.1: LMWD Water Supply System

119 53 Supplementary Appendix C Atipolo River, Maggulo River and Maitom River. The Atipolo River and Maggulo River supply about 55.6 lps (4,800 cumd). Water from the Atipolo Dam, Maggulo Dam, Maitom Dam located at elevations 260 mamsl, 262 mamsl and 128 mamsl respectively are conveyed to the sedimentation basin located in Barangay Tingib, Jaro Leyte near the rapid sand filtration plant. Hitumnob River and Hiabangan River. The Hitugnob River and Hiabangan River supply about 69.4 lps (6,000 cumd) to the water district. Water from the Hitugnob Dam and Hiabangan Dam located at elevations 752 mamsl and 665 mamsl are conveyed to the Dagami sedimentation basin. The discharges of the Hitugnob River and the Hiabangan River based on 80% dependability have been estimated at 12 lps (1,037 cumd) and 42 lps (3,629 cumd), respectively. This shows that current production is higher than the minimum flow based on 80% of minimum flow as extraction limit Groundwater Groundwater availability within the service areas of the water district is poor. Only shallow wells and dug wells exist in these areas to support the domestic demands of households not connected to the water district s water supply system. Wells drilled to meters showed yield of less than 2 lps. The shallow aquifer is easily affected by seasonal changes. Also, Tacloban City and other areas close to the coastline are characterized by saline water, with brackish water reported from wells drilled to more than 15 meters. High iron and manganese content is also reported among dug wells, shallow drilled wells and deepwells drilled to about 40 meters. LMWD has one (1) shallow well, namely the Tolosa Well located in Brgy. Imelda, Tolosa, and one (1) dugwell namely the San Gerardo Well located in Brgy. Nulatula, Tacloban City. The Tolosa Well has a discharge of 2.5 lps and serves as additional source for the Tolosa service area, while the San Gerardo Well with a capacity of 2 lps supplies water exclusively for San Gerardo Subdivision. Wells drilled farther away from the coastline, which sedimentary and metamorphic rocks, showed very poor yield. A well drilled in Barangay Cabalawan and installed with a 5 HP pump dried-up after 30 minutes of continuous pumping Source Water Quality The Hiabangaan river and Hitumnog sources that supply Dagami WTP are very good sources, not affected by turbidity change with the onset of rain. The Atipulo, Magculo and Maitom creeks that supply Tingib WTP are subject to turbidity change with the onset of rain in the catchment. In the past there have also been problems with arsenic and boron in the surface water these parameters are now routinely monitored for. 4.3 Water Treatment Dagami Water Treatment Plant The plant has a flocculation facility; however, due to the good quality of the raw water all year round there is no need to utilize chemical dosing for sedimentation. Water is disinfected on the outlet using chlorine gas in 100 kg cylinders. The outlet flow from Dagami WTP is measured using a 12 Meinecke, mechanical meter, installed in The meter is currently

120 54 Supplementary Appendix C read manually every hour; however, LMWD have plans to purchase an optical reader and data logger with which they will be able to log flow more accurately Tingib Old WTP The Tingib WTP is supplied via the Atipulo, Magculo and Maitom creeks. The WTP is a slow sand filtration (SSF) plant with a capacity of around 400 m 3 /hour, depending upon influent water quality. The elevation of the plant is 97.5m amsl. There is no disinfection of the effluent at the site; however, the water mixes with water from the Tingib rapid gravity filtration (RGF) plant prior to any off-takes, and the RGF plant water is over-dosed in order to ensure adequate chlorine level in the water after mixing. The filter media is cleaned annually. There is no flow meter on the outlet of this WTP Tingib RGF WTP The Tingib WTP is supplied from the Binahaan River. The WTP is a conventional type rapid gravity sand filter plant. The elevation of the plant is 105m amsl. The capacity of the plant is 1,000 m 3 /hour. Mixing of flocculant is achieved by gravity through a step waterfall and extended duration mixing tank (residence time: 90 minutes). The two parallel sediment tanks are flat bottom tanks with no scrapers; however, they each have a rolling gantry with suction pump which is used regularly to evacuate sludge. The sand filters are cleaned with surface wash only (there is no air scour facility) using a siphon technique to empty the filters of water. This leads to problems of mud ball formation lower in the filter, and consequently the filter media has a relatively short lifetime (in the order of 5 years). There is facility to pre-chlorinate in order to prevent algae growth during the clarification and filtration stages; this is not currently being used and a sizeable growth of algae and vegetation was observed in one of the filters. Post chlorination is carried out between the rapid gravity filter and the storage reservoir. The plant has the facility to dose both Poly Aluminium Chloride (PAC ) and Aluminium Sulphate (Alum) PAC is used when influent turbidity is < 200 NTU and Alum Sulphate is used when influent turbidity is >200 NTU. Disinfection is by liquid chlorine supplied in one-ton containers. The chlorine storage facilities are open air and there are no effective provisions in the event of chlorine leakage. The outlet water always conforms to PNSDW standards; however, at times of high turbidity the capacity of the chemical dosing pumps is not sufficient to provide the necessary quality at the design volume i.e. plant slow down sometimes has to be carried out to maintain effluent quality. There is no automated monitoring of water quality on the plant. There is a water quality laboratory at the WTP. The laboratory is capable of carrying out physical, chemical and bacteriological testing. Sampling is carried out in accordance with PNSDW requirements. The output water is compliant with the PNSDW standard. Operationally the water quality laboratory is well set up to manage WTP process control. Some improvements in the laboratory are planned for 2009, including adoption of the multiple tube fermentation method for bacteriological testing this is necessary for the laboratory to achieve accreditation.

121 55 Supplementary Appendix C Operations of the plant are carried out on a 4-shift basis (3 duty and 1 standby). There is no meter on the outlet of the WTP. There is, however, a meter on the transmission line in Barangay Tingib after the interconnection between the RGF and SSF outlet mains which records all flow produced in these plants. The meter is a Veris differential pressure meter; flow is related back to the control room at the RGF WTP. It was installed in Storage Facilities Aside from the storage reservoir on the outlet of Tingib WTP there are a number of storage reservoirs within the distribution. There are three (3) existing reservoirs namely the Utap Hill Reservoir, Ambao Hill Reservoir and the Tolosa Reservoir. Utap Hill and Ambao Hill are concrete ground reservoirs and operate on a floating in the line scheme, while the Tolosa reservoir is an elevated concrete reservoir and operates on a fill and draw scheme, with the water coming from the Tolosa Well. Table 4.2 shows the description of the said reservoirs. In Tacloban, in addition to the Utap service reservoir (with a capacity of 8,300 m 3 ) there is a recently constructed temporary reservoir below Utap reservoir. Table 4.2: LMWD - Summary of Reservoir Data Reservoir Classification Location Capacity Elevation Utap Hill Concrete Ground Reservoir Ambao Hill Concrete Ground Reservoir Tolosa Elevated Concrete Reservoir (cu.m.) in meters (masl) Brgy. Siren, Tacloban City 8, Brgy Sto. Nino, Tanauan, 2, Leyte Brgy. Imelda, Tolosa, Leyte Service Connections and Coverage The existing service area of LMWD covers Tacloban City and the municipalities of Dagami, Palo, Pastrana, Santa Fe, Tabontabon, Tanauan and Tolosa. A summary of the number of connections in LMWD (as of December 2008) along with population and derived service coverage information is given in Table 4.3. This assumes an occupancy rate of 6 persons per household. The existing service area of LMWD covers 261 barangays out of 370 barangays of the said city and municipalities. Table 4.4 shows the number of barangays per city/ municipality included in the present service area of LMWD.

122 56 Supplementary Appendix C Table 4.3: LMWD Service Connections (a) Active Connections Tacloban Palo Tanauan Dagami Tolosa Pastrana TabonTabon Santa Fe Total Total 19,499 3,855 2, ,585 Residential 12,279 3,492 2, ,688 Total Population 217,199 56,781 47,426 30,451 16,839 16,008 9,518 15, ,127 Population Served 73,674 20,952 15,162 2,670 1,590 2,154 1, ,128 Service Coverage 33.9% 36.9% 32.0% 8.8% 9.4% 13.5% 13.5% 4.0% 28.8% City/ Municipality (b) Number of Connections Domestic Commercial Government Industrial Bulk Sale/ Total Whole sale Tacloban City 12,279 6, ,499 Palo 3, ,855 Tanauan 2, ,650 Dagami Tolosa Pastrana Tabontabon Sta. Fe Total 19,688 7, ,585 Table 4.4: LMWD - Number of Barangays in the Service Area per City/Municipality City/ Municipality No. of Brgys. No. of Brgys. Total No. of In the Service Area Not in the Service Area Brgys. Tacloban City Palo Tanauan Dagami Tolosa Pastrana Tabontabon Sta. Fe Total Network and Operations Flow Measurement As discussed in the previous sections, the total output from the WTPs is measured but there is no other macro level flow measurement, either off the transmission mains into distribution or within the distribution network itself. This makes effective understanding of the distribution of water very difficult and is a barrier to identifying losses within the transmission and distribution networks Network (i) Transmission Network The distribution networks of all the municipalities are linked through the common transmission mains bringing water from the treatment facilities in the west of the supply area.

123 57 Supplementary Appendix C LMWD are of the opinion that all cast iron (CI) and asbestos cement pipe (ACP) should be replaced. Detailed data of the transmission network are indicated in Table 4.5. This shows that just over 50% of the transmission network is in either cement-coated iron (CCI) or ACP. Replacement of all CCI and ACP transmission mains will be an expensive exercise, and further analysis of the transmission mains condition is suggested; that said, a lump sum for transmission main replacement will be included in the investment plan for LMWD. Table 4.5: LMWD - Transmission Pipe Materials Total Raw & Treated Transmission Diameter Material Length (m) SPMC/CI 45,146 20,996 10, , SPSP/CI 24, ,844 5,720 14, , CCI 32, , , DCIP 2,794 1, UPVC 8, ,700 4, ACP 69,740 19,800 10,900 2,500 8,500 28, Total 183,798 42,746 22,644 4,344 27,470 70,495 3,771 12, (ii) Distribution Network Details of the distribution network characteristics are given in Table 4.6. Currently around 40% of the distribution network is in either CCI or ACP. Preliminary inspection of discarded pipes tends to support the LMWD view that CCI and ACP should be replaced the CI, whilst appearing to be structurally sound, is significantly compromised in terms of hydraulic capacity and impact on quality; whilst the ACP is a potentially a big problem from a structural point of view. Within the Tacloban City network LMWD have plans to replace 12.4 km of 100mm CCI mains and 2.8 km of 250 mm ACP mains in Tacloban City network in the period from their own resources project approval is currently being sought from the Board. This will leave around 19 km of CCI pipe to be replaced in the future. This will be included in the investment plan for LMWD. Table 4.6: LMWD - Distribution Pipe Materials TOTAL NETWORK Diameter Material Length (m) SPMC/CI 2, , SpCc/cl 1, , SPSP/CI CCI 26, ,615 4,990 20, DCIP UPVC 95, ,089 12,462 56,955 12,060 4, GI PB 5, , ,133 PE 2, ,273 ACP 2, , Total 138, ,704 21,923 79,851 12,090 9, ,406

124 58 Supplementary Appendix C (iii) Network Pressures The pressure in the network has been reducing over the last 15 years as connections have increased without expansion in network capacity. The municipalities supplied directly from the transmission line generally have good pressure; however, pressure in Tacloban has decreased significantly, varying from between 5 to 1 metre across the diurnal period. The Utap service reservoir in Tacloban (8,300 m 3 ; 38m elevation) hasn t been supplied since 1995 it operated in the floating on the line mode with a common inlet/outlet and no control on level. To compensate for the loss of pressure a temporary storage reservoir was built along the inlet main to the reservoir at 17 m elevation, from where water was then pumped into the Utap service reservoir; however, this also can no longer be supplied. Similarly the storage reservoir in Tanauan (0.6m gallons; elevation 38m) is no longer being operated, as water is unable to reach the inlet (although the pressure problems aren t as severe as in Tacloban). In the northern part of Tacloban, at the LMWD motor pool site, is a booster pump that lifts water by around 50 metres to feed two sub-divisions in hilly areas in the NW of the Tacloban service area. Pumps are currently operated between 17:00 and early morning, drawing water from a sump of 80m 3 capacity. The pumps are powered by a diesel engine; however, LMWD intend to change this to an electric-driven pump within the next year if possible. The lack of pressure in the Tacloban City network impacts on the level of service that is provided to the customers (low water pressure and poor water quality in very low pressure areas) and also on revenue, as additional connections do not now generally bring about an increase in sales. As an intermediate measure to increase pressures in Tacloban City LMWD have plans approved to install an in-line booster on the 20 transmission main between Palo and Tacloban. This has been designed to deliver a pressure of 25m in Tacloban city proper, provided that a minimum pressure of 14 metres is maintained in the transmission main at Palo. LMWD have recognized that this will create leakage problems in the Tacloban network but as discussed in the section above they have plans to replace mains, and are preparing for an intensive leak detection and service replacement campaign Operations Activity All operational activity is carried out in house by LMWD, e.g. meter reading, leak detection, leak repair, meter replacement, disconnections, etc. (i) Loss Reduction Leak Detection. No active leak detection is carried out by LMWD due to low pressures (although they have some Fuji sounding equipment it is not used, as it is generally ineffective). Current efforts revolve around visible leak detection and responding to leak reports. Around 30 leaks per month, typically on service lines, are repaired by in-house repair teams. In particular PB lines are problematic and tend to be replaced with PE. Replacement of PB lines will also be included in the investment plan. Illegal Connection and Consumption Reduction Activities. Within the financial division there is a team responsible for checking that previously disconnected customers remain disconnected i.e. are not taking water illegally. The team consists of 5 people who check

125 59 Supplementary Appendix C around sites per day. When an illegal residential connection is found LMWD levy a fine of PhP2,000 for 1 st offence; PhP3,000 for 2 nd offence; PhP4,000 for 3 rd offence; if the customer offends again they will never be reconnected. Fines for commercial illegal use twice that of residential. In addition the offender is penalized based on an assessment of the water used from the time their line was cut to the date of finding the illegal connection the assessed volume is based on the highest monthly average of the 6 months prior to disconnection. Payment of the penalty can be made in installments with a 50% first payment. The length of the repayment term can be negotiated with no interest payable. New illegal connections are reported either by meter readers or public that see them. There is no activity in seeking out non-registered customer use of LMWD water. Similarly, illegal consumption through meter tampering is usually reported by the meter readers or spotted following analysis of consumption and house occupancy. The management teams believe that illegal connections are a problem in Tacloban. They are hoping to tackle this when the mains replacement program commences; they will only reconnect legitimate customers this approach has the benefit that it is non-confrontational; however, illegal connections will only be identified in those areas that mains replacement takes place. (ii) Customer Meter Management All customer connections within the system are metered. Meter Calibration and Replacement. LMWD don t have a planned meter replacement program but they do have their own meter management team who test and refurbish meters, and they replace meters on an ad hoc basis when they are found to be under-reading. They are currently replacing between 50 and 100 stuck up meters per month the meters have strainers in them but very fine sediment can pass through and create problems. There are 14 staff in the metering management team 4 based in the site office and calibration workshop, and 10 site-based staff who check the meters in the field and then refer to the office if there is a problem. The calibration workshop is equipped to test up to 12 no., ½ meters simultaneously. Testing is volumetric and is carried out at three different flow rates. If they need to test greater than ½ they install a calibrated meter in series with the meter being tested. There are three types of meter in use in the LMWD network: Arad, Asahi and Aquajet of which now LMWD tend to use Arad and Asahi. They are just starting a program to seal the meters in order to reduce the incidence of meter tampering. Prior to issue all new customers, meters are tested and certified for use. Meter Reading, Billing and Collection. Meter reading is carried out by a team of 15 meter readers who are also responsible for bill delivery, however they do not deliver bills to the customers whose meters they have read. There are 29 billing zones which are further subdivided into walks.

126 60 Supplementary Appendix C Meter reading is recorded manually and data input to the billing system at the head office. LMWD are in the process of implementing on the spot billing. This has been approved by the board but has not yet been implemented. Payment in Tacloban is made at the water district head office, however within the municipalities the LGU office acts as a collection agent so the water district doesn t have to maintain a collection office. To encourage payment on time the water district offer a 5% rebate on the bill for early payment. If payment hasn t been received after 60 days a temporary disconnection is carried out the meter is removed and the service line plugged. If payment still hasn t been received after a further 3 months a permanent disconnection is carried out at the main. New Connections. The new connection process follows the model typical in most water districts. Applications for connection are submitted to the customer service division who then send the application to the engineering team to survey and decide whether the connection can be supplied. If it can they estimate the cost of the connection. The estimate is sent back to the customer service team who then notifies the customer and finalises the contract. Once payment has been received from the new customer the instruction is given to install the connection. For residential connections LMWD have a flat charge of PhP 5,000 for the first 10m (this assumes that there is no concrete excavation). Connections are installed in the name of the owner of the property being connected and billing is made c/o the tenant. The responsibility for obtaining excavation permits for the connection installation rests with the applicant rather than the water district. People living in informal settlement areas without title can be connected by LMWD provided that approval is obtained from the local Mayor. All applicants for new connection have to attend a seminar outlining the responsibilities of both the water district and the customer and explaining the processes and procedures to be followed in obtaining and maintaining a water connection. (iii) Management Information Systems LMWD are aware of the benefits of MIS for their business and have been developing systems, in particular over the last two years. There are a number of MIS initiatives underway and some others that would be useful, discussed below. Mapping: LMWD have a set of scale drawings showing the network however these aren t on a computerized mapping or GIS system. Implementation of a simple GIS system would greatly enhance LMWD ability to manage both network and customer data. Meter reading: As mentioned previously meter reading is currently done by hand followed by next day bill delivery. LMWD are moving to a FoxPro based on the spot recording and bill printing system this has been approved by the Board but not yet implemented although a successful trial run has been carried out. Billing: The billing system for Tacloban has been built in-house on an SQL database; billing for other municipalities are on a spreadsheet-based computer system. LMWD plan to migrate the other municipalities to the SQL system in the future but as yet don t have a definite

127 61 Supplementary Appendix C timeframe. They are using replicated servers as a means of gathering and transferring information. Customer Management: A customer management system using SQL was planned to be implemented in July 2009, and it is planned to link this to the billing system. Accounting: The accounting system is the National Government Accounting System (NGAS) on a visual basic platform as is the billing system; they also have a bank cash position system in place. Water Sales: LMWD have a water sales ordering system for bulk sales management this links to the billing system. Human Resources: LMWD have a HR MIS performance management system. 4.7 Non Revenue Water Strategy LMWD Board and Management recognise the importance of effective management of NRW. They believe that the transmission main system is relatively leak free and that the main problem is the distribution system, in particular that in Tacloban; however, there is no quantitative evidence to support this the analysis of production and billing information indicates that there may be a problem along the transmission line from Tingib to Palo, discussed in more detail below. LMWD have a basic strategy in place to tackle NRW in Tacloban City whereby they will increase pressures gradually, and carry out mains and service replacement and undertake intensive leakage detection activities. They are also addressing other aspects of NRW on a reactive basis, e.g. replacement of non-functioning meters, replacement of leaking service connections, limited mains replacement, etc NRW Performance Management of NRW related activities that are taking place is being carried out in-house by LMWD staff. The LMWD reported production and billed volume figures for 2008 were analysed to evaluate NRW performance these are shown Table 4.7. This shows that the reported NRW for the Year 2008 was 47.1% with a loss volume of 6.8 million m 3. Total billed revenues for 2008 were PhP million which gives an average tariff across all categories of consumer of PhP 23.2/m 3. The average residential tariff was PhP 17.7/m 3.

128 62 Supplementary Appendix C Table 4.7: LMWD Non Revenue Water Production Billed Volume - m3 NRW Month Tingib Dagami San gerardo Total Resid Government Comm Ind Bulk Sale Total % m3 Jan 863, ,889 4,833 1,066, ,615 58,333 93,431 47,014 2, , % 367,729 Feb 855, ,300 4,544 1,038, ,737 50,849 88,255 38,175 2, , % 440,053 Mar 1,041, ,320 4,632 1,239, ,847 55,500 79,942 38,664 2, , % 653,899 Apr 1,049, ,100 4,391 1,232, ,954 56,980 83,337 43,738 2, , % 603,795 May 1,036, ,320 4,514 1,227, ,704 53,559 89,044 48,149 3, , % 579,128 Jun 1,009, ,900 4,583 1,202, ,620 52,366 90,205 44,244 2, , % 581,067 Jul 1,045, ,790 4,955 1,248, ,481 57,500 87,975 48,553 3, , % 590,632 Aug 1,064, ,320 5,267 1,275, ,717 58,303 95,780 40,978 3, , % 606,355 Sep 1,032, ,960 4,180 1,234, ,422 58,780 94,483 41,965 2, , % 569,761 Oct 1,035, ,355 2,812 1,236, ,276 60, ,963 42,968 2, , % 545,417 Nov 990, ,870 4,084 1,185, ,547 52,767 87,389 36,087 2, , % 586,826 Dec 1,019, ,780 5,146 1,222, ,090 49,895 81,513 32,225 2, , % 661,455 12,046,641 2,310,904 53,941 14,411,486 5,350, ,571 1,073, ,760 33,711 7,625, % 6,786,117 There is an anomaly in relation to production output, especially in relation to the output from Tingib sources. In March 2008 the outlet volume from the Tingib treatment plant increased by around 200m 3 /hr (15%); however, there has been no apparent increase in sales as a result of this production increase. The possibility of a large leak along the transmission main between Tingib and Palo should be investigated. (i) IWA Water Balance Under IWA best practice standard the components of revenue water and non-revenue water are identified as shown in Table 4.8. This standard is now well recognized across the world and provides a clear basis for discussion of NRW. The standard identifies three principal components of NRW Unbilled authorised consumption; Apparent Losses; and Water losses these are discussed further below. Table 4.8: IWA Best Practice Standard on Revenue Water and NRW System Input Volume (corrected for known errors) Authorised Consumption Water Losses Billed Authorised Consumption Unbilled Authorised Consumption Apparent Losses Real Losses Billed Metered Consumption (including water exported) Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorised Consumption 1 Customer Metering Inaccuracies Leakage on Transmission an/or Distribution Mains Leakage and Overflows at Utility's Storage Tanks Leakage on Service Connections up to point of customer metering Revenue Water Non- Revenue Water (NRW) 1 - this includes illegal connections and illegal consumption - M Waite footnote not IWA

129 63 Supplementary Appendix C Unbilled Authorised Consumption. Unbilled authorized use of water is very often not monitored or measured, it includes: fire fighting (typically fire-fighting flows are not billed for); operational use such as mains flushing; any other kind of unbilled use with the recognition of the water utility. LMWD do not as yet quantify unbilled authorised consumption. Apparent Losses. Table 4.9 shows an estimate of apparent losses for LMWD based on discussions with LMWD staff during the field visit. It must be remembered that these are estimates and the calculation should be refined as better data becomes available. Table 4.9: LMWD Apparent Losses Parameter Leyte Metro Total Connections 26,786 Illegal as Percentage of Total Connections 10% Estimated Illegal Connections 2679 Avge. Volume Use - m 3 /conn/yr Estimated Illegal volume/yr 762,537 Illegal volume as % of Production 5.3% Estimated Metering Inaccuracies % 5% Estimated Metering Inaccuracies - m 3 /yr 381,268 Total Apparent loss - m 3 /yr 1,143,805 Total Apparent loss as % of Production 7.9% Real Losses. The IWA water balance is used to determine the Current Annual Real Losses (CARL), this incorporates the values for Unbilled Authorised Consumption and Apparent losses. The 2008 data for LMWD is shown Table Table 4.10: LMWD Current Annual Real Losses WATER BALANCE Leyte Metro System Input Volume - m3/yr 14,411,486 Billed Authorised Consumption - m3/yr 7,625,369 Non Revenue Water - m3/yr 6,786,117 Unbilled Authorised Consumption - m3/yr 0 Water Losses m3/yr 6,786,117 Apparent Loss % 7.9% Apparent Loss Volume - m 3 /yr 1,143,805 Current Annual Real Losses (CARL) 5,642,312 Infrastucture Leakage Index. IWA have also developed a best practice standard indicator for assessing network performance, the Infrastructure Leakage Index (ILI). It allows useful

130 64 Supplementary Appendix C comparison between systems taking into account network length as well as operating pressure. The ILI is a dimensionless ratio between the Current Annual Real Losses (CARL) derived in the section above and the losses that will always occur in the network as a function of network length, number of connections and pressure. This is known as the Unavoidable Annual Real Loss (UARL) within a network and is a measure of the combined performance of leak repair, asset condition/management and the speed and quality of repairs. The calculation of UARL for LMWD is shown in Table This is indicates that at current pressures there will always be unavoidable losses of around 171,000 m 3 /year. As pressures increase so the level of UARL will increase linearly this is a physical consequence of improving the pressure level of service in LMWD. The confidence in the use of UARL for systems with average pressures less than 25m may be lower than for systems with pressures 25m or greater because the assumption of a linear pressure relationship below 25m has not been tested. However, as a general guide to performance it provides a useful reference. Calculation of the Infrastructure Leakage Index for LMWD is shown in Table In a perfectly managed system with no economic constraints the ILI should be equal to 1. The ILI for LMWD is very high indicating that a lot of work is required on leak repair (including speed and quality); as well as asset management/replacement to improve the loss situation. It should be noted that an increase in pressure across the network to 25m would, using current statistics, increase the UARL (see section above) and thus reduce the ILI to 20. Table 4.11: LMWD Unavoidable Annual Real Loss Leyte Metro No. of connections (Nc) 26,786 Length of network (Lm in km) 318 Length of service lines (Lp in km) 161 Avge operating pressure in distribution (P in m) 15 Unavoidable Annual Real Losses (UARL) m 3 170,669 Where: UARL = (18 x Lm x Nc + 25 x Lp) x P Table 4.12: LMWD Infrastructure leakage Index Current Annual Real Losses (CARL) 5,642,312 Unavoidable Annual Real Losses (UARL) m3 170,669 Infrastructure Leakage Index (CARL/UARL) 33.1 `

131 65 Supplementary Appendix C 4.8 Deficiencies of Existing System Flow Measurement. As discussed earlier in this Chapter, the total output from the WTP s is measured but there is no other macro level flow measurement either off the transmission mains into distribution or within the distribution network itself. This makes effective understanding of the distribution of water very difficult and is a barrier to identifying losses within the transmission and distribution networks. Transmission Network. There are a lot of CCI and AC pipes in the transmission network. Replacement of all CCI and AC transmission mains will be an expensive exercise and further analysis of the transmission mains conditions is suggested. Distribution Network. A lot of pipes in the distribution network is in either CCI or AC. Preliminary inspection of discarded pipes tends to support the LMWD view that CCI and AC should be replaced the CCI whilst appearing to be structurally sound is significantly compromised in terms of hydraulic capacity and impact on quality; whilst the ACP is potentially a big problem from a structural point of view. Network Pressures. The pressure in the network has been reducing over the last 15 years as connections have increased without expansion in network capacity. The Municipalities supplied directly from the transmission line generally have good pressure however pressure in Tacloban has decreased significantly varying from 5 to 1 meter across the diurnal period. The Utap service reservoir in Tacloban (8,300 m 3 ; 38m elevation) hasn t been supplied since 1995 it operated in the floating on the line mode with a common inlet/outlet and no control on level. To compensate for the loss of pressure, a temporary storage reservoir was built along the inlet main to the reservoir at 17 m elevation from where water was then pumped into the Utap service reservoir; however, this also can no longer be supplied. Similarly, the storage reservoir in Tanauan (2,300 m 3 ; 38m elevation) is no longer being operated, as water is unable to reach the inlet (although the pressure problems aren t as severe as in Tacloban). In the northern part of Tacloban, at the LMWD motor pool site is a booster pump that lifts water by around 50 meters to feed two subdivisions in hilly areas in the NW of the Tacloban service area. Pumps are currently operated between 17:00 and early morning drawing water from a sump of 80m 3 capacity. The pumps are powered by a diesel engine, however, LMWD intend to change this to an electric driven pump within the next year if possible. The lack of pressure in the Tacloban City network impacts on the level of service that is provided to the customers (low water pressure and poor water quality in very low pressure areas) and also on revenue as additional connections do not bring about an increase in sales. As an intermediate measure to increase pressures in Tacloban City, LMWD have plans approved to install an in-line booster on the 500 mm transmission main between Palo and Tacloban. This has been designed to deliver a pressure of 25m at the Tacloban City proper provided that a minimum pressure of 14 meters is maintained in the transmission main at Palo. LMWD have recognized that this will create leakage problems in the Tacloban network but it is expected and they have plans to replace mains and are preparing for an intensive leak detection and service replacement campaign. Water availability. Water is not available 24 hours a day to about 26% of the total number of consumers in Tacloban City.

132 66 Supplementary Appendix C Unaccounted-for water. The un-accounted for water of LMWD for 2008 is about 44%.

133 67 Supplementary Appendix C 5 CITY OF KORONADAL WATER DISTRICT 5.1 Introduction and History Koronadal City Water District (CKWD) supplies water to Koronadal Municipality. The water supply system of the City of Koronadal was originally constructed in 1967 by the Bureau of Public Works and Highways. A deepwell located at the back of the Municipal Building was the original water source. A reservoir is also located at the said place. The City of Koronadal Water District (CKWD), then known as Koronadal Water District (KWD), was created by virtue of Sangguniang Bayan Resolution No. 92 which was passed on December 01, LWUA issued Conditional Certificate of Conformance (CCC) No. 156 in July 1981 to the water district after it complied with the necessary requirements. With its creation, the CKWD acquired the ownership and management of the water supply system in accordance with the Presidential Decree No In June 1983, LWUA conducted a feasibility study for a comprehensive improvement of the water supply system. However, after the detailed engineering design, development costs rose to such a high level that the resulting water rates were beyond the paying capacity of the concessionaires. In 1986, LWUA provided the CKWD a Php 1.1million loan facility to finance a pipeline extension. A re-evaluation of the study was undertaken in 1989 and the result turned out to be favorable, but the scarcity of funds of LWUA hindered the implementation of the project. In 1990, CKWD obtained a grant for the drilling of an exploratory well located at the compound of Magsaysay Memorial College at Bo.2 approximately 2.5 km southeast of the existing service area. In 1993, a comprehensive level III expansion project finally took off. It includes among others the construction of pump house and the installation of water treatment facilities in Magsaysay Compound. In 1998, an 800 cu.m. concrete ground reservoir located at Estember Subdivision and transmission lines were constructed. Upon its completion, the service area substantially expanded serving the town proper and nearby areas. In October 2001, CKWD was upgraded from small to average category by LWUA owing to its more than 3,000 concessionaires being served by the district. In July 2002, a second well at Forro Subdivision was commissioned to complement the increasing demand for water supply in the City of Koronadal. In December 2005, a third well was constructed in Brgy. Morales. In August 2007, LWUA took over the management of the CKWD in response to the institutional problems within the water district that adversely affected its operation. The Sta. Cruz well was constructed in 2008 and commissioned for use in The name Koronadal Water District (KWD) was changed to City of Koronadal Water District (CKWD) as per IBOD Res. 23, Series of 2008.

134 68 Supplementary Appendix C 5.2 Water Sources Groundwater The present water sources of CKWD consist of five (5) deepwells, namely: Bo.2, Forro, Morales, San Antonio and Sta. Cruz (locations are shown on Figure 5.1). The wells have discharges ranging lps. Except for the newly-constructed Sta. Cruz Well, water from the wells has manganese content exceeding the PNSDW limit. The average monthly production of the existing sources is 139,915 cu.m. Table 5.1 shows well characteristics. Table 5.2 shows deep well pump data as per KCWD records. Sta. Cruz Well. The Sta. Cruz Well is the most recent addition to the water district supply sources. The well was drilled in 2008 to 100 meters and installed with steel casings and stainless steel wirewound screens. The well penetrated alternating layers of clay, fine to coarse sand, gravel, adobe and boulders, with tapped sections consisting of coarse sand and adobe (tuffaceous sandstone). The well was free-flowing, and with a test discharge of 17 lps during the constant discharge test pumping water level dropped to 24 mbgl. Specific capacity of 0.66 lps per meter of drawdown and transmissivity of 1.84 x 10-3 m 2 /s obtained from the test indicate aquifer with medium yielding properties. All physical and chemical parameters tested are within the PNSDW s permissible limits. The well is currently producing lps (1,718 cumd), with the pumping water level at mbgl. Forro Well. The Forro Well was drilled in 2006 to 103 meters and installed with 250 mm casings and screens. Test pumping records showed that with withdrawal of lps water level dropped from 2.50 meters to meters. This well is currently being used with withdrawal of lps (1,409 cumd). Except for manganese, all parameters tested are all within the PNSDW s permissible limits. Test pumping of the Forro Pumping Station was done during the daytime when demand is low, and was conducted on June 5, The test consisted of a recovery test from 10:00 AM to 1:00 PM followed by a step-drawdown test from 1:00 PM 5:00 PM. A water sample was collected at the end of the test for physical and chemical analysis. Results were as follows: Transmissivity value as determined from the recovery test was 5.13 x10-3 m 2 /sec, indicating good aquifer characteristics. Four (4) steps at one hour per step were done at step discharges of 5.21 lps, lps, lps and lps. The Formation Loss Factor (B) and Well Loss Factor (C) as determined from this test were 250 sec/m 2 and 34, 167 sec 2 /m 5, respectively. Well loss is considerably high at 42 76% with discharge rates varying from lps. The normally acceptable well loss is 20 per cent as high well loss results to higher pumping costs. Transmissivity value as determined from the first step of this test was 5.36 x10-3 m 2 /sec, indicating good aquifer characteristics. The laboratory test results (June 11, 2009) showed manganese content of 1.2 mg/l, exceeding the maximum permissible limits 0.40 mg/l, while other parameters measured are within the Philippine National /standards for Drinking Water. Based on the results of the test pumping of the wells of the Forro Pumping Stations wells, the sustainable yield is estimated to be 17.5 lps (1,512 cumd).

135 69 Supplementary Appendix C Figure 5.1: CKWD Water Supply System

136 70 Supplementary Appendix C Table 5.1: CKWD Well Data Summary KCWD Well Year Depth Top Screen SWL Production Working Drawdown Sp. Cap. T x 10-3 Sustainable Iron Manganese Constructed (m) (m) (m) (lps) Pressure (psi) (m) (lps/m) (m 2 /sec) Yield (lps) (mg/l) (mg/l) Sta. Cruz Forro no data Morales San Antonio no data Barrio Dos

137 71 Supplementary Appendix C Table 5.2: CKWD - Summary of Deep Well Pump Data Deep Well Source Sta Cruz San Antonio Morales Well Forro Well Bo.2 Well Well Well Location Brgy. Sta. Cruz Brgy. Sta. Cruz Brgy. Morales Brgy. Gen. P. Santos Brgy. Sto. Nino Depth (m) Casing/ Screen / Diameter (mm) Type of Pump Submersible Submersible Submersible Submersible Submersible Motor Rating (Hp) Voltage/ Phase 440V/ 3-220V/ 1-440V/ 3-440V/ 3-phase 440V/ 3- phase phase phase phase Pumping Rate(lps) Pump Setting (mbgl) Static Water Level Free flow Free flow (mbgl) Pumping Water Level (mbgl) Year Constructed Standby Genset(KVA) None None None 100 None Morales Well. The Morales Well was drilled in 2005 to 103 meters and installed with 300 x 200 steel casings and 200 mm wirewound screens. Test pumping records showed that with withdrawal of lps water level dropped from 6.6 meters to 31.1 meters and gave specific capacity of 1.47 lps per meter of drawdown. This well is currently being used with withdrawal of lps (3,111 cumd). The manganese content is 1.2 mg/l, which exceeds the PNSDW s permissible limit of 0.5 mg/l. Test pumping of the Morales Pumping Station could only be done at night, on June 5-6, The test consisted of a recovery test from 6:30 AM to 9:30 PM followed by a stepdrawdown test from 9:30 PM (June 5) 12:30 AM (June 6). A water sample was collected at the end of the test for physical and chemical analysis. Results are as follows: Transmissivity value as determined from the recovery test was 1.73 x10-3 m 2 /sec, indicating medium aquifer characteristics. Three (3) steps at one hour per step were done at step discharges of lps, 37.70lps and lps. The Formation Loss Factor (B) and Well Loss Factor (C) as determined from this test were 205 sec/m 2 and 9,625 sec 2 /m 5, respectively. Well loss is high (59 63%) with discharge rates of lps. Transmissivity value as determined from the third step of this test was 2.40 x10-3 m 2 /sec, indicating medium aquifer characteristics. The laboratory test results (June 11, 2009) showed Total Dissolved Solids of 717 mg/l, exceeding the maximum permissible limits 500 mg/l, while other parameters measured are within the Philippine National /standards for Drinking Water. Based on the results of the test pumping of the wells of the Morales Pumping Station well,

138 72 Supplementary Appendix C the sustainable yields were estimated to be 26.6 lps (2,298 cumd). San Antonio Well. The San Antonio Well was drilled to 30 meters in 1996 for the San Antonio Subdivision and installed with 30 meters galvanized iron casings. Operation and maintenance of this well was turned over to the water district. The well is free-flowing and with test discharge of 3.89 lps, pumping water was measured at 6 mbgl. This well is currently being used with discharge of 3.30 lps (285 cumd). Except for manganese which is slightly high, all parameters are within the PNSDW s permissible limit. Water from the San Antonio Well is transmitted to the existing elevated steel tank before it is distributed to the consumers, while water from the four (4) other wells is pumped directly to the distribution system. The diameter of the San Antonio well at 125 mm is too small to allow for a water level measuring device, and the well yield is too small at 3 lps for test pumping. Barrio Dos Well. The Barrio Dos Well was drilled in 1990 to 103 meters and installed with 300 mm casings and screens. Test pumping record showed that with withdrawal of 22.8 lps water level dropped from 6.2 mbgl to 22.0 mbgl. The well is currently being used with withdrawal of lps (1,283 cumd). Manganese at 1.2 mg/l is higher than the PNSDW s permissible limit of 0.5 mg/l. At Barrio Dos Pumping Station well, the water level measuring device could not be lowered to measure the static and pumping water levels. Also, the gate valve at bypass line is not functioning Surface Water The Marbel River is identified as a potential water supply source for the water district. Mean monthly flow of the river during a 16 year observation period below the confluence of the Marbel River and the Palian River is 6,826 lps (589,766 cumd). The gauging station is located some 12 km southeast of the Koronadal City center at elevation 104 mamsl. On June 4, 2009, the WDDSP water resources engineer together with CKWD technical staff visited the Marbel River and observed the following: Two (2) National Irrigation Administration (NIA) diversion dams were constructed on the Marbel River: the Marbel 1 River Irrigation System in Brgy. Saravia located about 12 km southeast of the city proper and the Marbel 2 River Irrigation System in Brgy. Sto. Nino about 3k southeast of the city proper. Data taken during the visit to the NIA regional office at the Marbel-Banga River Irrigation System Office in the City of Koronadal show irrigated areas for Marbel 1 River Irrigation System and Marbel 2 River Irrigation System of 1, and 1, hectares, repectively. Spot discharge measurements were done at two points along the Marbel River using a current meter, General Oceanics Model 2030R with standard rotor S2030R. The first measuring station which is upstream of the Marbel 1 River Irrigation System diversion dam was located near the Palian River bridge in Brgy. Palian, Tupi, South Cotabato about 13.5 km southeast of the sity proper, while the second measuring station was located near the Marbel River bridge in Brgy. Concepcion, City of Koronadal about 5 km southeast of city proper. The results of the discharge measurements and water quality test are as follows:

139 73 Supplementary Appendix C The discharge measured at the first measuring station located upstream of the Palian River bridge on June 4, 2009 was 2.22 m 3 /s (191,560 cumd). The discharge measured at the second measuring station located upstream of the Marbel River bridge in Brgy. Concepcion, on June 6, 2009 was 4.81 m 3 /s (415,300 cumd). A water sample was collected for physical and chemical analysis. The laboratory test results (June 11, 2009) showed turbidity and color units of 10.3 and 15, respectively exceeding the maximum permissible limits of 5, while other parameters measured are within the Philippine National Standards for Drinking Water. 5.3 Water Treatment The water coming from the wells is treated with sodium hypochlorite in liquid form. All well pump stations are equipped with hypochlorinator to treat the water before distribution to the concessionaires. Bo.2, Forro and Morales pump stations have existing iron and manganese removal and sand separator facilities; however, the iron and manganese removal facilities fail to reduce the amount of manganese to its acceptable level since they were commissioned. The said facility in Forro is presently being used for sand separation process since the well there is discharging water with high sand content. 5.4 Storage Facilities KCWD has two (2) existing storage facilities, consisting of one (1) concrete ground reservoir and one (1) elevated steel tank: The concrete ground reservoir constructed in 1998 and located at Brgy. Zone 4 has a capacity of 800 cu.m. The reservoir operates on a floating in the line scheme. The elevated steel tank is located at Brgy. Sta. Cruz and operates on a fill and draw scheme, with water coming from the San Antonio Well. The San Antonio Well and the elevated steel tank are used exclusively for the residents of San Antonio Village. 5.5 Service Connections and Coverage A summary of the number of connections in CKWD along with population and derived service coverage information is given in Table 5.3. Total population 2007 Census; Served population based on an occupancy rate of 6 persons per household.the existing service area of CKWD covers 9 barangays out of the total 27 barangays of the City of Koronadal, namely: Caloocan, General Paulino Santos, Morales, Sta. Cruz, Santo Nino, Zone I, Zone II, Zone III and Zone IV. Figure 5.3: CKWD Service Connections Active Connections Koronadal Total 5,638 Residential 4,709 Total Population 149,622 Population Served 28,254 Service Coverage 18.9%

140 74 Supplementary Appendix C Consumption. The average consumption by consumer type was derived utilizing WD records on total billed consumption and number of connections per consumer type. The average household size of 6.5 persons was also used. a) Domestic Connections. Domestic connections are also known as residential connections. These are connections that are used for household consumption only and not used for any commercial purpose. 93,086 cu.m mo. x 1000 L = cu.m lpcd 30 days mo. x 4,847HHx6.5 persons HH b) Commercial connections cu.m mo. days mo. x 825conn = 0.85 cu.m day per connection c) Government/ Institutional. Government connections are connections that are used by government establishments. 5, cu.m mo. days mo. x 79conn = 2.47 cu.m day per connection 5.6 Water Network Operations Network The CKWD has a total length of 81,045 lm of PVC transmission / distribution mains with pipe diameters ranging from 50 mm to 250 mm. The summary of transmission / distribution pipelines is shown below in Table 5.4. Figure 5.4: CKWD Transmission/ Distribution Facilities Diameter Length Material PVC 200 3,300 PVC 150 8,990 PVC ,500 PVC 75 11,950 PVC 50 37,800 PVC

141 75 Supplementary Appendix C The CKWD is utilizing five (5) wells as its existing water sources and has two (2) distribution reservoirs. Water from the Bo. 2, Forro, Morales and Sta. Cruz wells is pumped directly to the distribution system. The Bo. 2, Forro and Sta. Cruz pump stations regularly operate from 4AM to 10 PM daily. The Morales pump station operates intermittently from 3AM to 2PM and from 5PM to 10 PM daily. The operation time maybe modified or extended depending on what time the concrete ground reservoir has been filled up or emptied. The concrete ground reservoir operates on the floating in the line scheme. Water from San Antonio Well is exclusively for the residents of San Antonio Village. The water is transmitted to the elevated steel tank and distributed by gravity. The CKWD is maintaining the system by performing pump testing, conducting system pressure measurements and undertaking physical, chemical and bacteriological analysis of the water being supplied to the consumers Network Pressures Pressures within the distribution network are generally good; most areas have pressures ranging between 20 and 30 m. In two sub divisions peak hour pressure drops to around 9 m Operations Activity Management of all operational activity is carried out in house by CKWD staff, e.g. meter reading, leak detection, leak repair, meter replacement, disconnections, etc. The management of Koronadal are focusing on the rehabilitation of the system. (i) Loss Reduction Leak Detection. Visible leak detection is carried out by the maintenance team. Illegal Connection and Consumption Reduction Activities. Illegal use of water is not considered to be a serious problem by CKWD. Any reports of illegal use either come from meter readers or from the general public. (ii) Customer Meter Management All customer connections within the system are metered. Meter Calibration and Replacement. CKWD have a meter calibration facility where they have the capability to refurbish meters with new inserts. They have recently started to install plastic meters due to problems with the theft of the brass meters they were previously using. In the order of 20 meters are replaced per month. Arad meters used to be used but are considered too expensive currently. Meter Reading, Billing and Collection. CKWD have 2 meter readers. Reading is carried out manually and data entry undertaken at the head office. Meter readers also deliver bills 2 days after the meter has been read. The meter readers report any meter problems daily and the maintenance section carries out the necessary replacement on an ad hoc basis.

142 76 Supplementary Appendix C The only payment facility is at the water district office in Koronadal. The billing cycle is spread over 20 days so this is currently not a problem. If customers don t pay within 60 days they are temporarily disconnected (the water district are trying to amend this to be within one month). If no p[ayment has been received after a further 3 weeks they are permanently disconnected at the main. New Connections. Applications for new connection are made to the commercial section of the water district. An engineering survey is carried out to confirm if customer can be served. There is an application fee of PhP 1,800 which covers the cost of the meter. The customer pays for all associated costs of installation. If an excavation permit is required CKWD organise with the city council Management Information Systems GIS/Mapping: CKWD have digitized their network data onto AutoCad. As yet they don t have a full GIS. Billing: The billing system for CKWD is the LWUA billing and CPS system it has recently been computerized. 5.7 Non Revenue Water Strategy Reported NRW levels in CKWD are low; however, the management of CKWD are aware of the need to ensure continued control of NRW and are taking proactive steps to ensure that production and customer metering is as accurate as possible. They do not believe at this time that targeted investment for NRW reduction is required NRW Performance Management of NRW-related activities that are taking place is being carried out in house by CKWD staff. The CKWD reported production and billed volume figures for 2008 were analysed to evaluate NRW performance these are shown in Table 5.5. CKWD acknowledge that one of their production meters is not working accurately and have derived a correction factor which they are currently using in the preparation of reported data. The reported data show that the NRW for the Year 2008 was 12.2% with a loss volume of 0.2 million m 3.

143 77 Supplementary Appendix C Figure 5.5: CKWD Non Revenue Water Month Production Billed Volume San Antonio Morales Forro Bo. 2 Total Resid Commercial Ind Govt Total NRW Jan 4,194 64,309 40,543 30, ,802 85,920 19,647 2,801 3, , % Feb 3,463 64,882 36,150 29, ,916 91,175 22,654 3,051 4, , % Mar 3,583 64,559 43,690 30, ,941 70,951 18,921 2,573 4,165 96, % Apr 3,494 65,672 43,460 27, ,458 92,825 19,815 3,570 4, , % May 3,928 65,768 42,780 28, ,916 96,050 19,788 4,058 4, , % Jun 4,240 64,863 39,900 31, ,633 93,392 20,506 3,435 4, , % Jul 3,889 67,143 46,410 29, ,864 86,462 20,574 2,918 5, , % Aug 3,940 66,853 44,440 31, , ,927 23,738 3,331 5, , % Sep 4,195 64,510 40,180 32, , ,271 28,317 3,826 10, , % Oct 3,735 64,835 39,260 32, ,695 96,583 21,838 2,877 7, , % Nov 2,706 61,507 39,740 31, ,500 96,018 20,333 2,791 6, , % Dec 1,841 63,218 40,200 32, ,686 94,792 20,679 3,242 6, , % Total 43, , , ,226 1,686,306 1,116, ,810 38,473 69,047 1,480, % Total billed revenues for 2008 were PhP26.9 million which gives an average tariff across all categories of consumer of PhP18.2/m 3. The average residential tariff was PhP 15.3/m 3. In comparison with other water districts investigated the NRW in Koronadal is particularly low. The fluctuation in NRW on a monthly basis indicates some inconsistencies, either in billing or production period recording, and as discussed below the sensitivity to NRW of the pumping regime of the Morales well. To provide some confidence in the reported figures a simple analysis of the production well design capacities combined with the reported operating regime of the wells was undertaken. This indicates that the reported production is consistent with the installed pump capacities at the reported operating hours. The analysis indicated that the level of NRW is particularly sensitive to the hours run of the Morales well a one-hour increase in the reported operating hours for Morales well increases NRW by 3%. The control of the Morales pump may go a long way to explaining the monthly variation in NRW. From the analysis carried out using the design production figures the reported NRW levels are probably within reasonable bounds. (i) IWA Water Balance Under IWA best practice standard the components of revenue water and non-revenue water are identified as shown in Table 5.6. This standard is now well recognized across the world and provides a clear basis for discussion of NRW. The standard identifies three principal components of NRW: Unbilled authorised consumption; Apparent Losses; and Water losses.

144 78 Supplementary Appendix C Figure 5.6: IWA Best Practice Standard on Revenue Water and NRW System Input Volume (corrected for known errors) Authorised Consumption Water Losses Billed Authorised Consumption Unbilled Authorised Consumption Apparent Losses Real Losses Billed Metered Consumption (including water exported) Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorised Consumption 1 Customer Metering Inaccuracies Leakage on Transmission an/or Distribution Mains Leakage and Overflows at Utility's Storage Tanks Leakage on Service Connections up to point of customer metering Revenue Water Non- Revenue Water (NRW) 1 - this includes illegal connections and illegal consumption - M Waite footnote not IWA Unbilled Authorised Consumption. Unbilled authorized use of water is very often not monitored or measured, it includes: fire fighting (typically fire-fighting flows are not billed for); operational use such as mains flushing; any other kind of unbilled use with the recognition of the water utility. CKWD do not at the moment record unbilled authorised consumption. Apparent Losses. Table 5.7 shows an estimate of apparent losses for CKWD based on discussions with CKWD staff during the field visit. It must be remembered that these are estimates and the calculation should be refined as better data becomes available. Figure 5.7: CKWD Apparent Losses Parameter Koronadal Total Connections 5,751 Illegal as Percentage of Total Connections 1% Estimated Illegal Connections 58 Avge. Volume Use - m 3 /conn/yr Estimated Illegal volume/yr 14,807 Illegal volume as % of Production 0.9% Estimated Metering Inaccuracies % 5% Estimated Metering Inaccuracies - m 3 /yr 74,035 Total Apparent loss - m 3 /yr 88,842 Total Apparent loss as % of Production 5.3%

145 79 Supplementary Appendix C Real Losses. The IWA water balance is used to determine the Current Annual Real Losses (CARL), this incorporates the values for Unbilled Authorised Consumption and Apparent losses. The 2008 data for CKWD is shown in Table 5.8. Figure 5.8: CKWD Current Annual Real Losses WATER BALANCE Koronadal System Input Volume - m3/yr 1,686,306 Billed Authorised Consumption - m3/yr 1,480,696 Non Revenue Water - m3/yr 205,610 Unbilled Authorised Consumption - m3/yr 0 Water Losses m3/yr 205,610 Apparent Loss % 5.3% Apparent Loss Volume - m 3 /yr 88,842 Current Annual Real Losses (CARL) 116,768 Infrastucture Leakage Index. IWA have also developed a best practice standard indicator for assessing network performance, the Infrastructure Leakage Index (ILI). It allows useful comparison between systems taking into account network length as well as operating pressure. The ILI is a dimensionless ratio between the Current Annual Real Losses (CARL) derived above and the losses that will always occur in the network as a function of network length, number of connections and pressure. This is known as the Unavoidable Annual Real Loss (UARL) within a network and is a measure of the combined performance of leak repair, asset condition/management and the speed and quality of repairs. The calculation of UARL for CKWD is shown in Table 5.9. This is indicates that at current pressures there will always be unavoidable losses of around 63,000 m 3 /year. As pressures increase so the level of UARL will increase linearly this is a physical consequence of improving the pressure level of service in CKWD. The confidence in the use of UARL for systems with average pressures less than 25m may be lower than for systems with pressures 25m or greater because the assumption of a linear pressure relationship below 25m has not been tested. However, as a general guide to performance it provides a useful reference. Figure 5.9: CKWD Unavoidable Annual Real Losses Koronadal No. of connections (Nc) 5,751 Length of network (Lm in km) 81 Length of service lines (Lp in km) 35 Avge operating pressure in distribution (P in m) 25 Unavoidable Annual Real Losses (UARL) m 3 63,158 Where: UARL = (18 x Lm x Nc + 25 x Lp) x P

146 80 Supplementary Appendix C Calculation of the Infrastructure Leakage Index for CKWD is shown in Table In a perfectly managed system with no economic constraints the ILI should be equal to 1. The ILI for CKWD is low indicating that the network is in a reasonable condition; that said, further work is required on leak repair (including speed and quality); and targeted replacement of failed assets where they exist should be considered in order to further improve the infrastructure condition. Figure 5.10: CKWD Infrastructure Leakage Index Current Annual Real Losses (CARL) 116,768 Unavoidable Annual Real Losses (UARL) m3 63,158 Infrastructure Leakage Index (CARL/UARL) Deficiencies of Existing System Water Quality. Except for Sta. Cruz Well, all wells have high manganese content and therefore consumers tend to buy bottled water for their drinking and cooking needs. Values of manganese were measured at 0.60, 1.20, 1.20 and 1.50 from San Antonio, Morales, Bo. 2 and Forro wells respectively which exceeded the PNSDW limit of 0.40 mg/l. The value of manganese from the Sta. Cruz well was measured at 0.10 mg/l which is below the PNSDW limit. Production meter at Forro Pump Station. The transmission facilities at Forro pump station have a defective mechanical flowmeter which makes it difficult for CKWD to monitor the operation of the said pump station as well as to control NRW. Storage Facilities. Since the elevation of the concrete ground reservoir is almost the same as that of the high areas of Brgy. Sta. Cruz, water in those areas is not available during minimum hour demand (late night or wee hours of the morning). At present, the Sta. Cruz pump station is not operating 24 hours, since doing so will be costly because only a few consumers live in the high areas.

147 i Supplementary Appendix D PROPOSED WATER SUPPLY COMPONENT FOR PILOT WATER DISTRICTS 1 Metro La Union Water District Potential Water Sources - MLUWD Water Supply Component Scope - MLUWD Water Demand and Service Connections Projections Proposed Sources LWUA Program Proposed Development Plan Cost Estimates - MLUWD Capital Cost Implementation Program - MLUWD Quezon Metro Water District Potential Water Sources - QMWD Rationale for Subproject System Expansion/ New Works - QMWD Recommended Water Supply Outline Design Cost Estimates for System Expansion - QMWD System Operation Non Revenue Water Reduction Program Utility Management Review Non-Revenue Water Control, Reduction and Management Program NRW Priority Measures of the QMWD Management of Water Resources and Watersheds Management of Water Resources Management of Watershed Implementation Schedule Procurement Packaging Detailed Engineering Study for the Outline Design Legazpi City Water District Potential Water Sources System Expansion/ New Works - LCWD Rationale for Subproject Water Supply Recommended Plan Figure 3.2: Schematic of Proposed Water Supply Improvements LCWD Non Revenue Water (NRW) LCWD NRW Asset Improvement NRW Recommended Operational Activity Improvements NRW Capital Investment Requirement Implementation Schedule - LCWD Cost Estimates - LCWD Metro Leyte City Water District Potential Water Source(s) Recommended Plan Projected Annual Number of Connections and Water Demand Served Population Projections Capital Cost Operation and Maintenance Cost Implementation Schedule... 53

148 ii Supplementary Appendix D Procurement Packaging Original Design for Rehabilitation and New Works as in DFR - LMWD Rationale for Subproject Recommended Plan NRW Reduction Activities Water Supply Cost Estimate LMWD Capital Cost Operation and Maintenance Cost System Operation and Maintenance Implementation Schedule Procurement Packaging City of Koronadal Water District Potential Water Source(s) Outline Designs for Rehabilitation and New Works - CKWD Rationale for Subproject Recommended Plan for System Expansion NRW Reduction Activity Cost Estimates - CKWD Capital Costs Operation and Maintenance Cost System Operation and Maintenance Implementation Schedule Procurement Packaging Figures 1.2 Georesistivity Survey Locations along Baroro River, MLUWD Georesistivity Survey Locations along Bauang River, MLUWD Schematic Diagram of Proposed Development Plan MLUWD Phase I Implementation Schedule MLUWD Phase II Implementation Schedule MLUWD Georesistivity Survey Locations in Lucena Area, QMWD Layout of Proposed Water Supply Development Plan QMWD Implementation Schedule QMWD Georesistivity Survey Locations in Legazpi Area, LCWD Schematic of Proposed Water Supply Improvements LCWD Water Supply Implementation Schedule Phase Schematic of Proposed Water Supply Improvements LMWD Water Supply Implementation Schedule Phase Schematic of Proposed Water Supply Improvements CKWD Water Supply Implementation Schedule CKWD 68

149 iii Supplementary Appendix D Tables 1.1 Projected Number of Service Connections MLUWD Projected Water Demand Projections/Water Demand Variations MLUWD MLUWD Potential Wellfields Phase I New Water Sources MLUWD Proposed Phase I Water Storage Facilities MLUWD Phase II New Water Sources MLUWD Phase II New Water Storage Facility MLUWD Estimate of Capital Cost - Design YR 2025 (Phase I and II) MLUWD Estimate of Capital Cost - Phase I (for Design year 2020) MLUWD Estimate of Capital Cost - Phase II (for Design year 2025) MLUWD Operation and Maintenance Estimated Cost MLUWD Breakdown of Cost Estimates QMWD Annual Operation and Maintenance Costs QMWD Breakdown of Capex Costs for NRW Control, Reduction and Management Program QMWD Annual Opex Costs for NRW Control, Reduction and Management Program QMWD Phase I NRW Priority Measures of the QMWD Storage Requirement for Expansion Area LCWD NRW Capital Investment Requirements LCWD Estimated Distribution Main Line Leaks and Costs LCWD Summary of Proposed NRW Investment Expenditure LCWD Detailed NRW Cost Breakdown LCWD Implementation Schedule LCWD Total Capital Cost Estimate LCWD Operation and Maintenance Cost Estimate LCWD Projected Annual Number of Connections and Water Demand - Phase Annual Service Area and Served Population Projections - Phase Estimate of Capital Cost Phase Projected Annual Operation and Maintenance Costs Phase NRW Capital Investment Requirements LMWD Estimate of Water Supply Capital Cost Phase Annual Operation and Maintenance Cost Phase Proposed Non Revenue Water Measures CKWD Estimate of Water Supply Capital Cost CKWD Annual Water Supply Operation and Maintenance Cost CKWD 67 Attachments 1 NRW Improvement Measures MLUWD 69 2 NRW Improvement Measures QMWD 81 3 NRW Improvement Measures LMWD 93 4 NRW Improvement Measures CKWD 105

150 1 Supplementary Appendix D 1 METRO LA UNION WATER DISTRICT 1.1 Potential Water Sources - MLUWD Based on the initial findings and evaluation of previous water resources investigations, the potential water supply sources for the improvement and expansion of the water district s water supply system includes the following: Baroro River through dam construction. Additional induced infiltration wells along the Baroro and Bauang Rivers. Baroro River. The Baroro River originates in the mountains northeast of San Fernando City and flows in a generally western direction through the Municipality of San Gabriel. It finally empties into the South China Sea just south of the Municipality of Bacnotan. The Baroro River flows have been measured since 1958 at a gauging station located near Cabaroan in the Municipality of San Juan. This river has a recorded minimum flow of 20 lps (1,700 cumd) after the present water district and NIA withdrawals in Sitio Lon-oy, Barangay Balbalayang, San Gabriel, La Union. The recorded mean flow of 10,046 lps (868,000 cumd) is very high in comparison to the recorded minimum flows. Therefore, the safe yield of this source can be increased by construction of an impoundment reservoir. The LWUA consultant, Camp Dresser and McKee, in its 1976 Water Supply Feasibility Report recommended an meter high concrete dam or a meter high rockfill dam in Barangay Bumboneg, San Gabriel, La Union. Should the river be developed as a surface water source, complete treatment is necessary to bring water quality within the permissible limits set by PNSDW. Additional Induced Infiltration Wells. Construction of additional induced infiltration wells along the Baroro and Bauang Rivers could be made to provide an additional supply to the water district. A geo-resistivity survey consisting of ten (10) vertical electrical sounding (VES) points five (5) VES points along the Bauang River and five (5) VES points along the Baroro River was carried out in May 2009 (locations are shown on Figures 1.1 and 1.2). In Bauang, the results of the geo-resistivity survey indicate presence of potential aquifers that could be tapped through drilled wells, big diameter dug wells and collector wells. In the vicinity of VES 5, the section that exhibited resistivity value of 200 ohm-meter from 1.2 meter to 7.2 meters could be tapped through big diameter dug wells or collector wells. Very high resistivity values correspond to coarse sand and gravel deposits, which is in direct hydraulic contact with the river. On the other hand, the section that exhibited resistivity values of ohm-meter in the vicinity of VES 3 and VES 4 could be tapped through wells drilled to 60 meters. These resistivity values correspond to intercalation and/or mixture of sand, gravel, clay and silt. This is the same aquifer section being tapped by the MLUWD production wells in the area. In San Juan, the results of the geo-resistivity survey indicate presence of coarse-grained materials at shallow depth and mixture and/or intercalation of sand, gravel clay and silt down to about 40 meters. At VES 9, resistivity of 116 ohm-meter from 1.1 meter to 8.3 meters correspond to sand and gravel deposits, which could tapped through big diameter dug well or collector well. In the vicinity of VES 6, VES 9 and VES 11, the section that showed resistivity of more than 20 ohm-meter is identified as potential sites for wells drilled to meters.

151 2 Supplementary Appendix D Figure 1.1: Georesistivity Survey Locations along Baroro River, MLUWD Source: Geo-resistivity Survey Report, WATCON, Inc., June 2009.

152 3 Supplementary Appendix D Figure 1.2: Georesistivity Survey Locations along Bauang River, MLUWD Source: Geo-resistivity Survey Report, WATCON, Inc., June 2009.

153 4 Supplementary Appendix D From the above results, the proposed well drilling sites are located upstream of the existing water district wells along the Baroro River and upstream of the existing wells along the Bauang River. Recommendations are as follows: Bauang Wellfield Well Depth : 60 meters meters Well Diameter : 200 mm 200 mm Expected Yield : lps lps Expected Drawdown : 8 12 meters 6 8 meters San Gabriel - San Juan Wellfield An adaptation of infiltration galleries can also be made in areas identifies as sites for big diameter dug wells. Large vertical caissons are constructed and screens or perforated pipes are jacked-out horizontally from the caisson into the permeable river deposits. The caisson serves as large storage tank and can yield big volume of water with very little drawdown. 1.2 Water Supply Component Scope - MLUWD Water Demand and Service Connections Projections The projected number of service connections is shown in Table 1.1 while the water demand projections and demand variations are shown in Table 1.2. Table 1.1: Projected Number of Service Connections - MLUWD City/Municipality Bacnotan ,464 Bauang 2,542 4,120 5,338 6,574 San Gabriel San Juan 700 1,160 1,732 2,354 San Fernando 4,700 6,041 8,949 11,832 Total 8,191 12,068 17,384 22,751 (In April 2009 and June 2009, connections were down to 8,015 and 7,981 respectively) Table 1.2: Projected Water Demand Projections/Water Demand Variations - MLUWD Year Total Demand (cumd) Non- Revenue Water Average-Day Demand Maximum-Day Demand (cumd) (L/s) (cumd) (L/s) Peak- Hour Demand (cum/hr) ,788 40% 7, , ,504 32% 12, , , ,118 30% 17, , , ,017 30% 21, , ,788

154 5 Supplementary Appendix D Proposed Sources The proposed additional source to be developed to meet the above projected demand will come from groundwater through wellfields identified in the areas northeast (San Juan) and south (Bauang) of San Fernando City. The combined discharge from the deep wells and shallow wells is L/s and L/s respectively, or a total additional water supply of L/s (12,960 21,168 cumd). To meet the 2025 demand, an additional capacity of about 184 lps need to be added. The well parameters are tabulated in Table 1.3. Water Source Table 1.3: MLUWD Potential Wellfields Bauang Wellfield San Juan Wellfield Combined Wellfield Deep Well Shallow Well Deep Well Shallow Well Deep Well Well Depth, m ; Shallow Well Well Diameter, mm Expected Yield/Well, lps No. of Wells Total Discharge, lps Total LWUA Program LWUA is currently preparing a Program of Work (POW) for the MLUWD of about PhP 86 Million of which about PhP 50 million will be spent for infrastructure development. The LWUA POW objective is to provide water service to Poro Point, San Fernando, as well as to reduce NRW. The POW will be implemented in Some of the NRW remedial works required will be undertaken in this POW Proposed Development Plan This Development Plan aims to improve the water supply system of Metro La Union Water District in order to meet the projected water demand for the design year 2025, both in the existing and proposed service areas. The program includes the development of new source facilities, construction of new pumping facilities, provision of new treatment facilities, installation of new transmission and distribution pipelines and construction of a new storage tank. Provision of new service connections is excluded in the estimate of capital cost as the funds for this will be raised from the prospective consumers from service connection fees. The recommended plan involves two (2) construction phases. The proposed Phase I will meet the projected water demand for Year 2020, is scheduled to be completed in 2014, while Phase II should be implemented before the Year 2020 to the meet the demand of the design year The proposed improvements shall be undertaken in accordance with the established standards set by LWUA. (i) Phase I Development Program The following improvements are proposed for Phase I (the schematic diagram is shown in Figure 1.3):

155 6 Supplementary Appendix D Figure 1.3: Schematic Diagram of Proposed Development Plan - MLUWD

156 7 Supplementary Appendix D Supply Sources. Construction of four (4) new wells located at Brgy. Ballay, Bauang and four (4) new wells located at Brgy. Naguirangan, San Juan. All existing sources will be retained. The Phase I maximum day demand (MDD) for the year 2020 is 250 L/s, and it will be supplied by the following: a) Utilization of all existing sources which could deliver a total capacity of about 116 L/s; b) Construction of four (4) new wells located at Brgy. Ballay, Bauang and four (4) new wells located at Brgy. Naguirangan, San Juan, which are expected to yield a total of 140 L/s. The expected yields of the wells are shown in Table 1.4. Table 1.4: Phase I New Water Sources - MLUWD Yr 2020 NEW SOURCE FACILITIES Capacity Expected No. (L/s) Yield (L/s) New Bauang Deepwells New San Juan Deepwells Total (L/s) 140 Pumpsets and Generators. This includes the construction of four (4) new well pump stations at Brgy. Ballay, Bauang and four (4) new well pump stations located at Brgy. Naguirangan, San Juan. A total of eight (8) new well pump stations will be constructed in or at new sources in Bauang and San Juan. Each pump station will be equipped with a submersible pump and motor capable of producing the expected yields of the new water sources. All pump stations shall be provided with a production meter and a stand-by generator. (Cost = Php million) Treatment/Disinfection Facilities. This will include the provision of a treatment facility for each pump station as well as the construction of filter beds for the Lon-oy source after the sedimentation basin. Each of the proposed eight (8) new well pump stations will be provided with a hypochlorinator to disinfect the water being withdrawn from the new sources. (Cost=Php million) Installation of new transmission and distribution pipelines. New transmission and distribution lines will be laid in the proposed service expansion while reinforcements will be laid to improve carrying capacity of pipes which may become inadequate to projected increased flow. This involves the construction of about 59 km of new pipelines ranging from 75 mm Ø to 350 mm Ø. The main transmission pipes of about 36 km and distribution pipes of about 23 km will satisfy the demand for YR 2020 service area. This will likewise include the attendant cost of valves and fittings. (Cost= Php million). Storage Reservoirs. All existing operational reservoirs will be retained in Phase I. The abandoned San Juan 150 cum concrete ground reservoir will be rehabilitated and four (4) new concrete ground reservoirs with a total capacity of 1,400 cum will be constructed to meet the need of Year 2020 for operational and emergency storage. The new storage facilities are shown in Table 1.5. (Cost= Php million).

157 8 Supplementary Appendix D Table 1.5: Proposed Phase I Water Storage Facilities - MLUWD City/Municipality Existing (cum) Required Additional Storage Bacnotan Bauang 1, cum San Gabriel cum *San Juan cum San Fernando 1, cum Total Capacity 2,950 cum 1,400 cum *Note: San Juan Ground Concrete Reservoir to be rehabilitated NRW Reduction. A lump sum provision of Php 12 million was provided for pipe replacements and installation of zone meters (A study was conducted during the PPTA on the full requirements needed to reduce the level of NRW of MLUWD; the study resulted in the recommendations shown in Attachment 1). Land Acquisition. This includes land acquisition for the eight (8) new well sites and two reservoir sites of about 2,600 square meters. (Cost= Php million). New Service Connections. An additional 9,199 connections will have to be added to meet 2020 demand. (Cost = Php million) Capital Cost Estimates. The total capital cost estimate for Phase I, including contingencies and engineering, is PhP million. (ii) Development Program Phase II Source Facilities. Three (3) new wells will be drilled under Phase II, and the projected maximum day demand (MDD) for the year 2025 of 310 L/s, will be supplied by the following: (cost=php3 million): a) Utilization of all existing sources which could deliver a total capacity of about 116 L/s, and all new wells completed under Phase I with total rated capacity of 140 L/s. b) Construction of two (2) new wells located at Brgy. Ballay, Bauang and one (1) new well located at Brgy. Naguirangan, San Juan, which are expected to yield a total of 55 L/s. The expected yields of the wells are shown in Table 1.6. NEW SOURCE FACILITIES New Bauang Deepwells New San Juan Deepwells Table 1.6: Phase II New Water Sources - MLUWD Yr 2020 (Phase I) Yr 2025 (Phase II) Number Capacity Expected Capacity Expected No. (L/s) Yield (L/s) (L/s) Yield (L/s) Sub-Total (L/s) Pumpsets. A total of three (3) new well pump stations will be constructed at the new well sources in Bauang and San Juan. Each pump station will be equipped with a submersible pump and motor capable of producing the expected yields of the new water sources. All

158 9 Supplementary Appendix D pump stations shall be provided with production meter and stand-by generator. (Cost =Php4.15 million). Treatment Facilities. Each of the proposed three (3) new well pump stations will be provided with a hypochlorinator to disinfect the water being withdrawn from the new sources. (Cost=Php234,000). Transmission/ Distribution Facilities. This will involve the construction of about 32.1 km of new pipelines ranging from 75 mm Ø to 350 mm Ø. Transmission pipes and distribution pipes of about 4.5 km and 27.6 km respectively, will satisfy the demand for YR 2025 service area. The schematic diagram is shown in Figure 8.1. (Cost=Php million). Storage Facilities. Two (2) new concrete ground reservoirs with a combined capacity of 600 cum will be constructed during Phase II to meet the need of Year 2025 for operational and emergency storage. The new storage facilities are shown in Table 8.7. (Cost=Php12.75 million). Table 1.7: Phase II New Water Storage Facility - MLUWD City/Municipality Existing (cum) New Storage (cum) 2020(Phase I) 2025(Phase II) Bacnotan Bauang 1, San Gabriel San Juan San Fernando 1, Capacity 2,950 1, NRW Reduction. A lump sum provision of Php 8 million was provided for NRW purposes. Land Acquisition. This will involve land acquisition for the 3 new well sites and 2 reservoir sites of about 1,600 square meters. (Cost=Php840,000). Service Connections. To meet the demand of YR 2025, about 5,367 projected new service connections should be installed. (Cost=Php8.05 million) Capital Cost Estimates. The total capital cost estimate for Phase II, including contingencies and engineering, is Php million. 1.3 Cost Estimates - MLUWD Capital Cost The cost estimates as shown in Tables 1.8 to 1.10 were prepared using the LWUA In-place Costs of Waterworks Materials and Equipment.

159 10 Supplementary Appendix D Table 1.8: Estimate of Capital Cost - Design YR 2025 (Phase I and II) - MLUWD COST ITEM UNIT QTY. UNIT COST TOTAL I. ENGINEERING BASIC COST ITEMS 1.0 SOURCE FACILITIES New Bauang Deepwells no 6 1,000,000 6,000,000 New San Juan Deepwells no 5 1,000,000 5,000,000 TOTAL 11,000, PUMPING STATION a.bauang Submersible Pump (15 LPS) no 3 400,000 1,200,000 Submersible Pump (20 LPS) no 3 540,000 1,620,000 Electrical Works including Generator sets ls 6 550,000 3,300,000 Valves, fittings, and meter ls 6 105, ,000 Transformer and accessories set 6 55, ,000 Pump House (18 s.m.) ls 6 180,000 1,080,000 a.san Juan Submersible Pump (15 LPS) no 2 400, ,000 Submersible Pump (20 LPS) no 3 540,000 1,620,000 Electrical Works including Generator sets ls 5 550,000 2,750,000 Valves, fittings, and meter ls 5 105, ,000 Transformer and accessories set 5 55, ,000 Pump House (18 s.m.) ls 5 180, ,000 TOTAL 15,030, WATER TREATMENT FACILITY a.bauang Hypochlorinator & Accessories lot 6 78, ,000 a.san Juan Hypochlorinator & Accessories lot 5 78, ,000 c.san Gabriel Filter Bed & Accessories lot 1 8,000,000 8,000,000 TOTAL 8,858, TRANSMISSION FACILITIES Pipes ( Approx. 41 km New Reinforcement pipes) ls 1 167,417, ,417,500 Valves and Fittings ls 1 10,045,050 10,045,050 TOTAL 177,462, STORAGE FACILITIES New Concrete Ground Reservoir Bauang (1-400 cum) cum ,250 8,500,000 San Fernando (1-500, cum) cum ,250 21,250,000 San Juan (1-350 cum) cum ,250 7,437,500 Bacnotan (1-100 cum) cum ,250 2,125,000 San Gabriel (1-150 cum) cum ,250 3,187,500 TOTAL 42,500, DISTRIBUTION FACILITIES Pipes (Approx 50 km New Pipelines for expansion area) ls 1 47,432,000 47,432,000 Valves and Fittings ls 1 3,794,560 3,794,560 TOTAL 51,226, NRW Reduction Replacement of pipes, valves and meters ls 1 20,000,000 20,000,000 TOTAL 20,000, SUB-TOTAL 1 326,077,110 PHYSICAL CONTINGENCIES (10% OF SUB- TOTAL 1) 32,607,711 ENGINEERING STUDIES (6% OF SUB-TOTAL 1+PC) 21,521,089 CONSTRUCTION SUPERVISION (4% OFSUB- TOTAL 1+PC) 14,347,393 TOTAL COST 1 394,553,303 II. NON-ENGINEERING BASIC COST ITEMS

160 11 Supplementary Appendix D COST ITEM UNIT QTY. UNIT COST TOTAL A. LAND ACQUISITION sm ,100,000 CONTINGENCIES (5% OF A) 105,000 TOTAL COST 2 2,205,000 TOTAL PROJECT COST 396,758,303 III. Note: Item No. III excluded from Total Project Cost SERVICE CONNECTIONS Service Connections, additional tubing. Excludes water meters Bauang no 4,032 1,500 6,048,000 San Fernando no 7,133 1,500 10,699,500 San Juan no 1,659 1,500 2,488,500 San Gabriel no 443 1, ,500 Bacnotan no 1,299 1,500 1,948,500 TOTAL 14,566 21,849,000 Table 1.9: Estimate of Capital Cost - Phase I (for Design year 2020) - MLUWD COST ITEM UNIT QTY. UNIT COST TOTAL I. ENGINEERING BASIC COST ITEMS 1.0 SOURCE FACILITIES New Bauang Deepwells no 4 1,000,000 4,000,000 New San Juan Deepwells no 4 1,000,000 4,000,000 TOTAL 8,000, PUMPING STATION a.bauang Submersible Pump (15 LPS) no 2 400, ,000 Submersible Pump (20 LPS) no 2 540,000 1,080,000 Electrical Works including Generator sets ls 4 550,000 2,200,000 Valves, fittings, and meter ls 4 105, ,000 Transformer and accessories set 4 55, ,000 Pump House (18 s.m.) ls 4 180, ,000 a.san Juan Submersible Pump (15 LPS) no 2 400, ,000 Submersible Pump (20 LPS) no 2 540,000 1,080,000 Electrical Works including Generator sets ls 4 550,000 2,200,000 Valves, fittings, and meter ls 4 105, ,000 Transformer and accessories set 4 55, ,000 Pump House (18 s.m.) ls 4 180, ,000 TOTAL 10,880, WATER TREATMENT FACILITY a.bauang Hypochlorinator & Accessories lot 4 78, ,000 a.san Juan Hypochlorinator & Accessories lot 4 78, ,000 c.san Gabriel Filter Bed & Accessories lot 1 8,000,000 8,000,000 TOTAL 8,624, TRANSMISSION FACILITIES Pipes ( Approx. 36 km New Reinforcement pipes) ls 1 154,368, ,368,000 Valves and Fittings ls 1 9,262,080 9,262,080 TOTAL 163,630, STORAGE FACILITIES New Concrete Ground Reservoir Bauang (1-400) cum ,250 8,500,000 San Fernando (1-500) cum ,250 10,625,000 San Juan (1-350) cum ,250 7,437,500 San Gabriel (1-150 cum) cum ,250 3,187,500 TOTAL 29,750, DISTRIBUTION FACILITIES

161 12 Supplementary Appendix D COST ITEM UNIT QTY. UNIT COST TOTAL Pipes (Approx 23 km New Pipelines for expansion area) ls 1 22,445,500 22,445,500 Valves and Fittings ls 1 1,795,640 1,795,640 TOTAL 24,241, NRW Reduction Replacement of pipes, valves and meters ls 1 12,000,000 12,000,000 TOTAL 12,000, SUB-TOTAL 1 257,125,220 PHYSICAL CONTINGENCIES (10% OF SUB- TOTAL 1) 25,712,522 ENGINEERING STUDIES (6% OF SUB-TOTAL 1+PC) 16,970,265 CONSTRUCTION SUPERVISION (4% OFSUB- TOTAL 1+PC) 11,313,510 TOTAL COST 1 311,121,516 II. NON-ENGINEERING BASIC COST ITEMS A. LAND ACQUISITION sm ,300,000 CONTINGENCIES (5% OF A) 65,000 TOTAL COST 2 1,365,000 TOTAL PROJECT COST 312,486,516 III. Note: Item No. III excluded from Total Project Cost SERVICE CONNECTIONS Service Connections, additional tubing. Excludes water meters Bauang no 2,796 1,500 4,194,000 San Fernando no 4,250 1,500 6,375,000 San Juan no 1,037 1,500 1,555,500 San Gabriel no 297 1, ,500 Bacnotan no 819 1,500 1,228,500 TOTAL 9,199 13,798,500 Table 1.10: Estimate of Capital Cost - Phase II (for Design year 2025) - MLUWD COST ITEM UNIT QTY. UNIT COST TOTAL I. ENGINEERING BASIC COST ITEMS 1.0 SOURCE FACILITIES New Bauang Deepwells no 2 1,000,000 2,000,000 New San Juan Deepwells no 1 1,000,000 1,000,000 TOTAL 3,000, PUMPING STATION a.bauang Submersible Pump (15 LPS) no 1 400, ,000 Submersible Pump (20 LPS) no 1 540, ,000 Electrical Works including Generator sets ls 2 550,000 1,100,000 Valves, fittings, and meter ls 2 105, ,000 Transformer and accessories set 2 55, ,000 Pump House (18 s.m.) ls 2 180, ,000 a.san Juan Submersible Pump (20 LPS) no 1 540, ,000 Electrical Works including Generator sets ls 1 550, ,000 Valves, fittings, and meter ls 1 105, ,000 Transformer and accessories set 1 55,000 55,000 Pump House (18 s.m.) ls 1 180, ,000 TOTAL 4,150, WATER TREATMENT FACILITY a.bauang Hypochlorinator & Accessories lot 2 78, ,000 a.san Juan Hypochlorinator & Accessories lot 1 78,000 78,000

162 13 Supplementary Appendix D COST ITEM UNIT QTY. UNIT COST TOTAL TOTAL 234, TRANSMISSION FACILITIES Pipes ( Approx. 36 km New Reinforcement pipes) ls 1 13,049,500 13,049,500 Valves and Fittings ls 1 782, ,970 TOTAL 13,832, STORAGE FACILITIES San Fernando (1-500) cum ,250 10,625,000 Bacnotan (1-100 cum) cum ,250 2,125,000 TOTAL 12,750, DISTRIBUTION FACILITIES Pipes (Approx 23 km New Pipelines for expansion area) ls 1 24,986,500 24,986,500 Valves and Fittings ls 1 1,998,920 1,998,920 TOTAL 26,985, NRW Reduction 8,000,000 Replacement of pipes, valves and meters ls 1 8,000,000 TOTAL 8,000, SUB-TOTAL 1 68,951,890 PHYSICAL CONTINGENCIES (10% OF SUB-TOTAL 1) 6,895,189 ENGINEERING STUDIES (6% OF SUB-TOTAL 1+PC) 4,550,825 CONSTRUCTION SUPERVISION (4% OFSUB- TOTAL 1+PC) 3,033,883 TOTAL COST 1 83,431,787 II. NON-ENGINEERING BASIC COST ITEMS A. LAND ACQUISITION sm ,000 CONTINGENCIES (5% OF A) 40,000 TOTAL COST 2 840,000 TOTAL PROJECT COST 84,271,787 III. Note: Item No. III excluded from Total Project Cost SERVICE CONNECTIONS Service Connections, additional tubing. Excludes water meters Bauang no ,500 1,854,000 San Fernando no ,500 4,324,500 San Juan no 622 1, ,000 San Gabriel no 146 1, ,000 Bacnotan no 480 1, ,000 TOTAL 5,367 8,050,500 (iii) Operation and Maintenance Cost The projected O&M cost is shown in Table Implementation Program - MLUWD The implementation timeline of the proposed improvements, Phase I and Phase II, are shown on Figures 1.4 and 1.5 respectively.

163 14 Supplementary Appendix D Table 1.11: Operation and Maintenance Estimated Cost MLUWD OPERATION AND MAINTENANCE COSTS YEAR NO. OF CONN. Ave Day SALARIES POWER CHEMICALS MAINTENANCE OTHER O&M TOTAL ,191 7,980 13,533,551 12,432, ,825 7,117,691 9,094,332 42,670, ,352 8,151 13,799,563 12,793, ,386 7,257,595 9,273,088 43,626, ,495 8,162 13,894,058 12,816, ,065 7,381,857 9,431,858 44,028, ,638 8,163 13,986,663 12,818, ,127 7,506,119 9,590,629 44,406, ,826 10,959 15,910,275 18,717, ,801 8,538,449 10,909,645 54,752, ,068 12,507 18,610,024 21,983, ,402 10,486,668 12,923,211 64,775, ,138 13,366 17,727,559 23,795, ,452 11,416,461 13,393,682 67,158, ,193 14,393 19,151,107 25,962, ,877 12,333,219 14,533,948 72,869, ,259 15,280 20,589,497 27,833, ,656 13,259,535 15,605,661 78,231, ,323 16,298 22,025,190 29,981,109 1,006,525 14,184,114 16,746,174 83,943, ,384 17,311 23,456,834 32,118,247 1,069,085 15,106,085 17,882,335 89,632, ,451 18,403 24,896,574 34,422,052 1,136,524 16,033,271 19,064,030 95,552, ,528 19,435 26,349,807 36,599,274 1,200,258 16,969,146 20,219, ,337, ,602 20,460 27,798,993 38,761,728 1,263,560 17,902,414 21,369, ,095, ,660 21,473 29,226,589 40,898,866 1,326,120 18,821,779 22,503, ,777, ,751 21,453 30,698,713 40,856,672 1,324,885 19,769,820 23,105, ,755,366 Assumptions: 1. Compensation Cost ( per Employee) = P161, per year. 2. Power Cost estimated at P 5.78 per cu. m of water produced from ground sources. 3. Chemical Cost estimated at P 0.17 per cu. m of water produced. 4. Maintenance Cost for the Facilities estimated at P per connection. 5. Other O&M Cost estimated at P1, per connection.

164 15 Supplementary Appendix D Figure 1.4: Phase I Implementation Schedule - MLUWD

165 16 Supplementary Appendix D Figure 1.5: Phase II Implementation Schedule - MLUWD

166 17 Supplementary Appendix D 2 QUEZON METRO WATER DISTRICT 2.1 Potential Water Sources - QMWD The potential water source for the improvement and expansion projects of the water district is groundwater through wells. Although the May-it Spring has a recently measured excess flow of 358 lps (30,931 cumd), the reliability of the spring as an additional water supply source needs to be established. The reported yield of lps (62,500 cumd) is almost equal to the 710 lps (61,344 cumd) design capacity of the existing transmission lines. Also the observed flow of 175 lps (15,120 cumd) from the 500 mm diameter pipe is much less when compared with its 400 lps (34,560 cumd) design capacity. Existing water district wells showed that high capacity wells can be drilled and developed in the area north and northwest of Lucena City. A geo-resistivity survey was undertaken west and northwest of Lucena City in May 2009 (locations are shown on Figure 2.1). Results of the survey showed that the investigated areas are underlained with fine to coarse grained deposits as indicated by low to high resistivity values. Finer grained materials were determined at the lower slopes of Mt. Banahaw, particularly the low-lying areas closer to the coastline. Very low resistivity values determined at greater depths near the coastline correspond to formations saturated with brackish water. In terms of resistivity values and thickness of potential aquifer, the third electrostratigraphic section that exhibited resistivity values of more than 50 ohm-meter is identified as the potential aquifer section that could be tapped through deepwells. In the vicinity of VES 9 this section is down to about 133 meters and about 116 meters in the vicinity of VES 1. From the above results, the following are recommended: Well Depth : meters Well Diameter : 350 x 200 mm Expected Yield : lps Expected Drawdown : meters.

167 18 Supplementary Appendix D Figure 2.1: Georesistivity Survey Locations in Lucena Area, QMWD Source: Geo-resistivity Survey Report, WATCON, Inc., June 2009.

168 19 Supplementary Appendix D 2.2 Rationale for Subproject Quezon Metro Water District is one of the five pilot subprojects that will comprise the Water District Development Sector Project which a preparatory technical assistance is being undertaken. The preparatory technical assistance aims to assess the present situation of the existing water supply and sanitation system in QMWD and to recommend outline design for the improvement of the existing system and/or expansion of water supply services, reduction of NRW, and for upgrading and improvement of existing sanitation facilities in QMWD franchise area. This section presents the outline of the development program recommended for the improvement of the Quezon Metro Water District. The recommendations include source development, construction of additional storage facilities, provision of booster pump stations, provision of stand-by power supply, installation of treatment/disinfection facilities, installation of new transmission/distribution pipelines, installation of new service connections, and provision of other system appurtenances, and stored materials and equipment, NRW control and management measures. The development cost and the annual operation and maintenance costs are also presented. The system operation, implementation schedule, management of water resources and watershed, sewerage and drainage concept, updating of the water supply plan and the environmental impact of the proposed project are likewise discussed. The recommended water supply system improvement program will be undertaken in a two stages. Phase 1 will cover requirements until design year 2017 while Phase considers Year 2025 as the design year. Deviations from the design criteria as contained in the LWUA Methodology Manual were allowed to enhance the feasibility of the project and to reduce the project cost. 2.3 System Expansion/ New Works - QMWD Recommended Water Supply Outline Design (i) Phase I Development Program ( ) To supplement the existing facilities, following: Phase I Development Program will include the Laying of approximately 10 km of 200mm to 300mm transmission pipes including valves and appurtenances from Tayabas proper to proposed reservoir in Barangay Calumpang near Lucena City area. Construction of nine (9) additional deepwell sources and provision of pumping and disinfection facilities, including provision of generator sets, and provision of power supply lines. Laying of approximately 65 km of 50mm to 300mm transmission and distribution lines including valves and appurtenances at existing service area and proposed expansion areas including pipe bridge crossings and culvert crossings, provision for pavement cutting, breaking and surface restoration. Construction of 1,150 cum storage facilities. Installation of 10 sets of 150mm and 15 sets on 10mm fire hydrants. Installation of 2,616 service connections excluding water meters. Provision for booster pumps station at Bgy. Masin and at at Lucena area.

169 20 Supplementary Appendix D Provision for stored materials and equipment; and Acquisition of about 2000 sqm of land for wells and reservoirs The layout of the proposed development plan is shown in Figure 2.2. Source Facilities. Deepwells. Nine deepwells will be developed to cope with the increasing water demand in QMWD. Three deepwells each with a capacity of 40L/s will be drilled in the north and northwestern part of Lucena City to. Four wells will be drilled in Pagbilao expansion area in Barangay Silangan Malicboy; and two wells will be drilled in Bgy. Masin in Tayabas. These wells will augment the existing sources to meet present and future supply requirement. The two newly drilled wells in Bgys Lalo and Calumpang will be provided with pumping facilities and have to be commissioned by the QMWD for utilization in 2010 to augment deficiency in water supply prior to the implementation of the proposed subproject. The existing eleven deepwell and pumping stations with a total rated production of 223 L/s will continuously be utilized by the system. Springs. The existing springs, namely, May-it, Ibia, Dapdap A, Dapdap B, Lalo Grande and Lalo Pequeño Springs with a combined production capacity of about 509 L/s will continuously be utilized. Pumping Facilities. Each of the proposed well sources will be equipped with pumping facilities, motor control and accessories. A pumphouse with a minimum floor area of 25 sqm will be constructed in each of the proposed pump stations to secure the motors, controls and other appurtenances. Booster Pump Station. At least four QMWD wells in Lucena City operates on a floating-onthe line method. This system involves more pumping hours thus will result in higher pumping costs. A more ideal system operation would to store water in the reservoir, then to flow by gravity from the reservoir into the distribution system. High areas may be served by providing a booster pump from the reservoir, hence a provision for booster station. In Tayabas expansion area, a booster pump is also provided to boost pressure in the area and to obtain a better system pressure distribution. Stand-by Power Generating Units. Two of the four wells to be drilled in Bgy. Silangan Malicboy will be provided with stand-by power generating sets while one unit will be provided for the wells at Bgy. Masin, to ensure uninterrupted water service even during power outages. Treatment/Disinfection Facilities. Only hypochlorination facilities using liquid chlorine will be used in treating water from the proposed and existing sources to bring the quality of the raw river water to the standard of the PNSDW. Transmission Facilities. About 10 km of 200mm to 300mm diameter transmission will be laid to convey raw water from Tayabas proper to the proposed reservoir in Bgy. Calumpang. As discussed in Chapter 7, a thorough review and investigation of the hydraulic configuration and actual physical condition of the existing transmission mains should first be conducted prior to laying of the proposed transmission mains under the subproject.

170 21 Supplementary Appendix D Figure 2.2: Layout of Proposed Water Supply Development Plan - QMWD

171 22 Supplementary Appendix D Water from the proposed wells in Barangay Malicboy will be conveyed to Pagbilao proper through f 200mm to 300mm diameter transmission pipelines, about 14 km in length. Most of the pipes will be laid along the road and are always subject to vibration due to traffic, particularly in Lucena City. Further, existing condition results in high pressure in some parts, particularly during minimum hour due to the difference in elevation between the low points in the area. All transmission and distribution pipes will have Class 150 specifications. Storage Facilities. The total volume of storage facilities in the QMWD of 12,775 cum is sufficient for the operational storage of the system at Year 2015 computed at on 15% of the Maximum-Day Demand. However, a 700 cum ground concrete tank will be needed to store water coming from the new transmission lines from Tayabas proper. A 300 cum reservoir will be constructed to provide the operational storage requirement of the Tayabas expansion area. A 150cum reservoir will be constructed at Bgy Ilayang Palsabangon to balance pressure in the area. Distribution Facilities. About 60 km of 50mm to 200mm distribution pipes will be laid along road network in the proposed and existing service area expansion. The pipe sizes and lengths were derived from the program of work prepared by the QMWD. During detailed engineering design, the pipe sizes will be finalized with the aid a computerized hydraulic analysis model. Service Connections, Valves and Fire Hydrants. The total number of connections is expected to increase from the present number of 34,595 to 49,069 in year The subproject will include the cost for additional 2,616 connections expected to be generated on the first year of operation of the improved system. About 191 sets of valves and assemblies will be installed in the new pipelines and some sections of the existing lines for flow control, and zoning and isolation purposes in cases of emergencies. Blow-off valves will likewise be installed at low points and extremities of the system for line flushing purposes. A total of 25 hydrants (150mm and 100mm) will be installed at the distribution network to provide fire protection in cases of fire emergencies. Land Acquisition. A total of 2,000 sqm of lot area needs to be acquired for the sites of the proposed nine (9) new wells/pump stations at minimum of 100 sqm per site. Minimum lot areas of 500 sqm will be acquired for the 700 cum reservoir at Barangay Calumpang; 260 sqm for the 150 cum reservoir at Barangay Silangan Malicboy; 340 sqm for the 300 cum reservoir at Barangay Masin. Stored Materials. An adequate inventory of stored materials and equipment, which is essential for the efficient operation and maintenance of the water supply system, will be provided. (ii) Phase II Development Program Phase II development program will include the following: 1. Construction of ten (10) additional deepwell sources and provision of pumping and disinfection facilities, including provision of generator sets, and provision of power supply lines. 2. Laying of approximately 43 km of 50mm to 200mm transmission

172 23 Supplementary Appendix D and distribution lines and reinforcements, including valves and appurtenances at existing service area and proposed expansion areas including pipe bridge crossings and culvert crossings, provision for pavement cutting, breaking and surface restoration. 3. Construction of 3,750 cum storage facilities. 4. Installation of 10 sets of 150mm and 15 sets on 10mm fire hydrants. 5. Installation of 1,748 service connections excluding water meters. 6. Construction of about 3,750 cum storage facilities. 7. Provision for booster pump station for Lucena City area. 8. Acquisition of 2,125 sqm of land for deepwells and reservoir Cost Estimates for System Expansion - QMWD (i) Phase I Costs The estimated costs of the proposed improvement program for QMWD at 2009 price level is presented in Table 2.1. The total project cost is P Million broken down into P Million for engineering costs and P Million for price and physical contingencies, engineering study and provision for construction supervision. Nonengineering costs amounts to Php 3.36 Million. The cost for pipelines including valves, service connections and fire hydrants amounts to Php Million representing 72% of the total engineering costs. The total cost of source facilities and pumping stations is about Php Million representing 18% of the engineering basic costs while the reservoirs at Php Million represents 8.5%. Other costs represent 1.5% of the engineering basic costs. The non-engineering costs include costs for price and physical contingencies, detailed engineering design, construction supervision, land acquisition and other contingencies. (ii) Phase II Cost Estimate Phase II Improvement program has a total construction cost of Php Million broken down into P Million for engineering costs and P Million for price and physical contingencies, engineering study and provision for construction supervision. Non-engineering costs amounts to Php 3.57 Million. The breakdown of costs is also shown in Table 2.1.

173 24 Supplementary Appendix D Table 2.1: Breakdown of Cost Estimates QMWD Table 8.1 BREAKDOWN OF COST ESTIMATES (P x 1000) BASIC CONSTRUCTION COST LWUA PRICE LEVEL (YEAR 2009) Facilities Phase 1 (2017) Phase 2 (2025) Qty. Unit Unit Cost Total Cost Qty. Unit Unit Cost Total Cost I Engineering Basic Cost Items 1 Laying of 200mm to 300mm 300mm diameter 6,020 LM , mm diameter 2,680 LM , mm diameter 1,000 LM , Transmission/Distribution Lines 300 mm diameter 5,265 LM , mm diameter 5,865 LM , mm diameter 7,929 LM , ,489 LM , mm diameter 12,782 LM , ,077 LM , mm diameter 12,437 LM , ,748 LM , mm diameter 19,300 LM , ,991 LM , mm diameter 2,000 LM Bridge/River Crossings LS 10, , Culvert Crossing LS Pavement Cutting and Breaking LS 4, , LS 4,535 4,535 6 Surface Restoration LS 5, , LS 11,922 11,922 7 Well Drilling NW of Lucena Wellfield 3 ea 2, , ea 2, , mm x L/s each Malicboy Wellfield 4 ea 2, , ea 2, , mm x L/s each Masin Wellfied 2 ea 2, , ea 2, , mm x L/s each Lalo-Alitao Wellfield 1 ea 4, , mm x L/s each 8 Construction of Dug Well at Ransohan 1 ea Pumping Stations 75 Hp Submersible Pump 3 set 1, , set 1, , Civil Works: Pumphouse 75 sqm sqm , Discharge Pipes Valves and Fittings 3 lot lot , Production Meter 3 set set Demand Meter 3 set set Hypochlorinator and Accessories 3 set set Power Supply Line/Dist. Transformers 3 lot 1, , lot 1, , Accessories such as: Motor Control, Riser Pipe, Submersible Cable etc. 3 lot , lot , Hp Submersible Pump 1 set Civil Works: Pumphouse 25 sqm Discharge Pipes Valves and Fittings 1 lot Production Meter 1 set Demand Meter 1 set Hypochlorinator and Accessories 1 set Power Supply Line/Dist. Transformers 1 lot Accessories such as: Motor Control, Riser Pipe, Submersible Cable etc. 1 lot

174 25 Supplementary Appendix D Facilities Phase 1 (2017) Phase 2 (2025) Qty. Unit Unit Cost Total Cost Qty. Unit Unit Cost Total Cost 15 Hp Submersible Pump 6 set , set , Civil Works: Pumphouse 150 sqm , sqm Discharge Pipes Valves and Fittings 6 lot , lot Production Meter 6 set set Demand Meter 6 set set Hypochlorinator and Accessories 6 set set Power Supply Line/Dist. Transformers 6 lot , lot , Accessories such as: Motor Control, 6 lot , lot Hp Submersible Pump 1 set Civil Works: Pumphouse 5 sqm Discharge Pipes Valves and Fittings 1 lot Production Meter 1 set Demand Meter 1 set Hypochlorinator and Accessories 1 set Power Supply Line/Dist. Transformers 1 lot Accessories such as: Motor Control, 1 lot Standby Power Generating Set 25 KVA 3 set , set , Reservoir Lucena 700 cum , cum , Pagbilao 150 cum , Tayabas 300 cum , cum , Valves 300 mm 21 ea mm 19 ea mm 24 ea ea mm 37 ea ea mm 36 ea ea mm 55 ea ea Fire Hydrants 150 mm (Commercial) 10 set set mm (Residential) 15 set set Service Connections (Without Meters) 2,616 set , set , Provision for Booster Pump Stations 2 lot 2, , lot 2, , Stored Materials 4, , II SUB-TOTAL I 294, , PRICE AND PHYSICAL CONTINGENCIES (10% OF SUB-TOTAL I) 29, , DETAILED ENGINEERING DESIGN (6% of SUBTOTAL I +PPC) 19, , CONSTRUCTION SUPERVISION (4% OF SUB-TOTAL I +PPC) 12, , TOTAL COST I 356, , Non-Engineering Costs A. Land Acquisition 2,000 sqm , ,125 sqm , B. Contingencies (5% of A) TOTAL COST II 3, , TOTAL PROJECT COST 360, ,226.75

175 26 Supplementary Appendix D (iii) Operation and Maintenance Costs Operational cost includes salaries of WD personnel, power, chemical, maintenance, and miscellaneous costs. Maintenance expenses include repair of facilities and other fixed assets. These are the costs associated with materials necessary for the up-keeping of the system facilities. The labor component of such expenses has already been included in the staff salaries. Miscellaneous costs include general expenses for administration such as office supplies and materials, promotions and public relations, travel and per diem expenses, training of staff, directors fees and remuneration, communication, professional fees, and other overhead expenses of the WD management. The annual operation and maintenance costs are presented in Table System Operation The QMWD will operate and maintain the improved water system. Water services will be provided to the concessionaires for 24 hours daily. Water from the springs is treated at the intakes prior to storage at reservoir. For May-it Spring, post chlorination may be undertaken in view of the distance of the chlorination point to the distribution center. May-it Spring will continue to serve the Lucena City and the Municipality of Pagbilao. Portion of Tayabas is also being served from the May-it Spring. The supply in Lucena will be augmented by existing wells (Well Nos. 1,2,3,4,5,8,9 and 11), Well No.7 to be commissioned by the QMWD and the proposed three new deepwells to be drilled in Lucena North and Northwest. The supply in Pagbilao will be augmented by four new wells to be drilled in Silangan Malicboy. Water from May-it will be conveyed to the Pagbilao Reservoir, Tongko Reservoir, and the proposed Calumpang Reservoir and will flow to the distribution system by gravity. It is recommended that all pumping stations and the Isabang Reservoir operate on a fill-and-draw method. All pumping stations will pump water in to the reservoir. From the reservoir water will flow into the service area by gravity. Areas which may experience low pressure or may not be served by the reservoir may be served by the booster pump station.

176 27 Supplementary Appendix D Table 2.2: Annual Operation and Maintenance Costs QMWD Table 8.2 ANNUAL OPERATION AND MAINTENANCE COSTS (P x 1,000) 1/ QUEZON METRO WATER DISTRICT YEAR AVERAGE-DAY DEMAND (cum) NO. OF CONNECTION NO. OF EMPLOYEES SALARIES2/ POWER3/ CHEMICALS4/ MAINTENANCE5/ MISCELLANEOUS6/ Total ,549,267 34, ,603 13,909 2,783 15,844 59, , ,304,814 35, ,941 15,623 2,935 16,439 61, , ,060,297 37, ,281 17,323 3,071 17,033 63, , ,831,516 38, ,621 19,058 3,210 17,675 65, , ,630,157 39, ,962 18,442 3,353 18,316 65, , ,335,487 41, ,302 16,779 3,480 18,957 64, , ,630,562 44, ,642 19,692 3,714 21,689 68, , ,593,895 45, ,982 21,860 3,887 22,330 70, , ,401,041 47, ,238 23,676 4,032 23,168 72, , ,514,323 49, ,494 26,181 4,233 24,006 74, , ,641,931 50, ,750 28,718 4,436 24,844 76, , ,783,865 52, ,006 31,287 4,641 25,683 79, , ,580,923 54, ,263 32,720 4,785 26,521 80, , ,567,434 56, ,433 34,939 4,962 28,699 82, , ,563,675 58, ,604 37,181 5,141 29,506 84, , ,569,645 59, ,775 39,444 5,323 30,312 85, , ,585,346 61, ,946 41,730 5,505 31,119 86, , ,610,777 63, ,117 44,037 5,690 31,925 87, ,641 1/ Unescalated Cost 2/ Salaries = average monthly salary (P14,225) x no. of employees x 13 months 3/ Annual Power Costs = Annual water requirement x Ave. Power Cost (P2.25/cum) 4/ Annual Chemical Costs = ave. day water demand (m3/d) x 365 Php 0.18/cum 5/ Annual Maintenance Costs = Maintenance Cost of Existing Facilities (P458/Service Connection)+ Maintenance Cost of Recommended Facilities 6/ Annual Miscellaneous Costs = 55% to 75% of Salaries, Power, Chemicals and Maintenance Costs.

177 28 Supplementary Appendix D 2.4 Non Revenue Water Reduction Program Utility Management Review The Utility Management Review conducted by the Consultant in June to August 2009 highlighted the issues affecting the performance of the system, particularly in the measurement of production vis-a-vis consumption, being one of the key indicators in assessing water system efficiency. The major findings of the review included the following: a) Very few of the water sources (spring or deepwell) are measured on a continuous basis. Similarly only a few of the inlets to the three distribution systems are monitored. This means that accounting for source water and water into supply from reservoirs and wells is approximate. Although reasonable estimating assumptions are being used the variability in supply due to network dynamics is not accurately being picked up. There are a number of electromagnetic meters, however not utilized because of worn-out batteries. b) In Lucena City, about 42 km are old pipes which are possible sources of leaks. c) About 20% of the existing service connections are old G.I. materials which are also possible causes of leaks. d) Pressures in Pagbilao are generally high which is controlled by the existing reservoir located at an elevation of 83 mamsl. The high pressures often cause pipe bursts. There are no pressure control mechanisms installed in the system. e) There is also a very small percentage (20 out of 34,595 connections) of illegal connections found in f) QMWD has no meter replacement program for leaking and defective meters. g) As yet QMWD are not utilizing a GIS/mapping system. Mapping records are held at the operational offices. Mapping in each of the service areas is limited to as built drawings from construction projects. The production team relied on a detailed sketch of the Lucena network showing deep well sources, major pipelines and key controlling valves in the network Non-Revenue Water Control, Reduction and Management Program The board and management of QMWD recognize the importance of effective management of NRW and have recently embarked on a drive to lower their unaccounted for water to 20% by At present there a special task for force for water accounting Operation & Maintenance and Assistance Program (OMAP) focusing on the following activities: inspection and survey of inactive customers; routine check-up of water meters; leak detection survey; permanent disconnection of inactive consumers and concessionaires with illegal connections; spot inspection and constant surveillance of suspected customers; coordination with Barangay officials pertaining to apprehension of illegal water users; and coordination with local police in documenting and apprehending illegal water users. Although the QMWD is embarking on these activities, NRW cannot be truly accounted without the aid of an effective measurement system. There is a need to establish a monitoring and measurement system that would accurately measure performance of the improved system in terms of flows and pressure through installation production metering units and data logging equipment with a totalizing mechanism to record variation in flows and pressure due to dynamics of system. An efficient measurement system will enable water utility managers and personnel to optimise utilization of the system facilities that will be very useful in achieving and assessing system performance and efficiency.

178 29 Supplementary Appendix D Based on the results of the investigation analysis conducted under the PPTA, the following are the recommended Non-Revenue Control, Reduction, and Management Measures: 1) Installation of production metering devices so that spring flows and deepwell production can be measured continuously. 2) Acquisition of leak detection equipment such as leak noise correlators, electronic listening equipment, pipe locating equipment (all materials), and noise loggers 3) District metering by dividing the network into discrete where flows can be monitored continuously. Usually these are done based on technical considerations such as setting hydraulic boundaries instead of political/geographical boundaries. It is ideal to setup district metering zones with 3000 to 5000 service connections. 4) Pressure reduction by installation of Pressure Reducing Valves in areas where there are excessive pressure. High pressures results in high NRW also. 5) Replacement of leaking mains particularly old mains which are possible sources of leaks. 6) Replacement of defective meters, as these meters area sources of NRW (through under registry of consumption). On the other hand defective meters also cause over registry of consumption which is not good for the customers and is a common source of complaints. 7) Replacement of defective service connections which are mostly G.I materials. 8) Valve Rehabilitation Program to allow isolation of small parts of the network so that operational situations like burst mains or interconnections can be managed without affecting large numbers of customers. 9) Installation of operational systems and equipment such as GIS Mapping tools for utility operation, billing system and an operable hydraulic model. Geographic Information system provides a very useful platform for recording details of physical assets location, type, age, condition; as well as for recording customer consumption, billing and payment information. The QMWD has an existing billing system which should be reviewed by systems specialist to determine whether it is sufficiently robust for the task and/or whether it can be further customized to the benefit of the user. Hydraulic models of water supply systems provide many benefits to the water utility in terms of improved knowledge of network asset types and condition; better understanding of water usage across the network; use of the model to simulate changes and improvements to the network; design of district meter zoning and pressure reduction areas; and support to strategic resource planning. The total estimated costs of the whole program are shown in Table 2.3 while the operation and maintenance costs are shown in Table 2.4.

179 30 Supplementary Appendix D Table 2.3: Breakdown of Capex Costs for NRW Control, Reduction and Management Program QMWD Particulars Total Cost 1 NRW Control 1.1 Production Metering 7,747, District Metering 5,986, Leak Detection/Pipe Location Equipment 2,400, Data Logging Equipment 3,553,000 Sub-total 19,687,022 2 NRW Reduction 2.1 Customer Meter Replacement 13,800, Pressure Reduction Valves 7,303, Mains Replacement 34,429, Service Repacement 14,175, Valve Rehabilitation 4,539,826 Sub-total 74,247,756 3 Management System Geographical Information System 795,000 Hydraulic Modelling 545,000 Sub-total Total 1,340,000 95,274,778 Table 2.4: Annual Opex Costs for NRW Control, Reduction and Management Program QMWD Year NRW Control (Licensing & Batteries) NRW Reduction (Leak Repair) Management System (Licensing & Batteries) Total Costs ,314,811 1,314, ,314,811 39,000 1,353, ,314,811 39,000 1,353, ,000 1,314,811 39,000 1,428, ,314,811 39,000 1,353, ,314,811 39,000 1,353,811 8,158, NRW Priority Measures of the QMWD The above NRW Reduction Program was discussed with management and officials of the QMWD on August 28, Based on discussions with the officials of the QMWD, it was informed that due to cost constraints, a priority on the NRW Program will include control measures so that the system will have a more accurate accounting of water production and water losses since present method of measurement gives approximate figures only. The work items that will be included under Phase 1 of the subproject are as shown in Table 2.5. Other recommendations under the Utility Management Review to further improve and enhance system performance will be gradually implemented by the QMWD using internally generated funds.

180 31 Supplementary Appendix D Table 2.5: Phase I NRW Priority Measures of the QMWD NRW Control Measures Quantiy/Description Cost (Php) 1. Production Metering a) Electro-mechanical b) Mechanical Type 5 units 300mm to 600mm 17 units-150mm to 250mm 7,747, Leak Detection Eqp t a) leak noise correlators, b) electronic listening equipment, c) pipe locating equipment (all materials), and d) noise loggers 3. Data Logging Equipment a) Dual flow and pressure logger b) Pressure Logger c) Computer (Hardware) 4. Geographical Information Syste (GIS) a) Software Purchase and Implementation b) Hardware Purchase - Computers 5. Hydraulic Modelling a) Software Epanet Freeware b) Hardware Purchase- Computer c) Model Building 2units 5 units 3 units 2 units 20 units 30 units 3 units 1 lot 1 lot 1 lot 1 lot 2,440,000 3,553, , ,000 Total Cost for Phase 1 NRW (Php) 15,080,119 The complete details of the NRW Reduction Program showing the strategies, benefits, water savings/recovery and payback periods against investments are contained in Attachment Management of Water Resources and Watersheds Management of Water Resources The need to secure the sustainability of water sources was underscored. Mount Banahaw is an abundant water supplier for all municipalities in the region. But human pressure into the protected zone, political issues and greatly increased demand from a fast growing population, competing water uses for agriculture and the high fuel cost of extracting ground water, and possible effects of climate change on water sources, all point to the need to integrate sustainability of water resources into QMWD s water management programs and strategies. The recommended measures for water resources management in this context means the preservation of primary water sources for sustainable use. The following measures should be implemented to preserve the usefulness of the existing sources: 1. Management of wells should include a monitoring program of flow rates, pumping time, static water levels, pumping water levels and water quality. These will determine the variations in well performance which may indicate the

181 32 Supplementary Appendix D need for corrective measures. These records, except for water quality, should be maintained on a daily basis. Physical and chemical analyses, consisting of parameters established by the Philippine National Standards for Drinking Water (PNSDW), should be performed at least once every six (6) months. Bacteriological analysis should be conducted at least once a month. The well fields should be protected from all activities which may lead to contamination and/or excessive lowering of the water table. 2. A sanitary zoning plan should be implemented with special emphasis on the protection of the most economical water sources. It should be integrated into the general zoning plan. 3. The necessary water rights should be secured as early as possible. Professional advice may be sought from the Local Water Utilities Administration (LWUA) regarding water resources management Management of Watershed The watershed of the area, particularly Mount Banahaw and other resources such as groundwater that contribute to the water supply should be monitored and managed by the QMWD to ensure that continuous recharging of the water sources is attained. Coordination with the various agencies involved in water resources and environmental protection should be maintained. A collaborative effort between stakeholders such as the QMWD, irrigators, other users, other government agencies, and the LGU for an environment of an integrated water resources management for use and preservation of the Mount Banahaw as the major source of water for the QMWD, water irrigation and other uses should be initiated. 2.6 Implementation Schedule The proposed improvement program as contained in this study will be implemented over a one and a half year period starting in mid-year 2012 and until end of year The improved system is expected operate by the first quarter of The implementation schedule is shown in Figure Procurement Packaging All Procurement of Works, Goods and Consultants will be conducted in accordance with the ADB Guidelines for procurement and the guidelines of the Government Procurement Policy Board (GPPB). The following options may be undertaken: a) Procurement of Consultant to undertake review/updating/detailed engineering design of the outline design, and prepare tender documents such as plans, drawings, technical specifications and bill of quantities, environmental impact assessment and other required reports, b) Procurement of Works/Goods may be done through international or national competitive bidding using the tender documents prepared by the Consultant; or c) Design-and-Build Scheme whereby LWUA/QMWD will procure works for design and construction under one contract. Strict provision will be provided in the bid documents for the required design and construction results.

182 33 Supplementary Appendix D Figure 2.3: Implementation Schedule - QMWD Figure 8.2 IMPLEMENTATION SCHEDULE Quezon Metro Water District Phase I ( ) ACTIVITIES /FACILITIES OUTLINE DESIGN REVIEW/APPROVAL BY LWUA/WD DETAILED DESIGN STAGE REVIEW AND APPROVAL PROCUREMENT/TENDERING PROCESS PHASE I EXPANSION PROGRAM: NRW Measures Transmission Lines to Isabang Reservoir Transmission/Distribution Lines/Bridge & Culvert Crossings/PavementCutting & Breaking CONSTRUCTION PHASE st 2 nd 3 rd 4 th 1 st 2 nd 3 rd 4 th 1st 2nd 3rd 4th Surface Restoration Well Drilling Incl. Const. of Dugwell Pumping Stations ` Standby Power Generating Set Reservoir Valves ` ` Fire Hydrants ` ` ` Service Connections ` ` Provision for Booster Pump Stations Stored Materials Land Acquisition

183 34 Supplementary Appendix D Well Drilling will be undertaken by specialty contractors and will be procured separately ahead of schedule of the pipelaying and civil works package to confirm finality of the design. 2.8 Detailed Engineering Study for the Outline Design The water supply outline design must be thoroughly reviewed to assess its effectiveness and ensure that data and information are updated prior to conduct of detailed engineering design. As recommended in Chapter 6, Water Resources Study, drilling of tests wells in Barangay Pagbilao and Barangay Masin should be undertaken to confirm the assumptions for water quantity and quality used during conduct of preparatory technical assistance. The following items should also be considered in the Detailed Engineering Study: 1) Revision in the outline due to changes in the existing conditions of the system such as addition or deletion of facilities, increase in service area and service connections which might result in updating of projections, changes in city/municipality development plan which might affect the outline; 2) Implementation of any part of the outline design; 3) Re-evaluation water tariffs including the financial and economic viability of the project ; and 4) A detailed environmental impact assessment.

184 35 Supplementary Appendix D 3 LEGAZPI CITY WATER DISTRICT 3.1 Potential Water Sources The potential water sources for the improvement and expansion projects of the water district include the following: Groundwater from the existing wells in the Bogna and Mabinit Wellfields that produce good water quality, which totaled lps from the Bogna Wellfield and lps from the Mabinit Wellfield for a total of lps (8,984 cumd). Withdrawal of additional surface water from the Yawa River. The Yawa River could support total water demands of 848 lps (73,267cumd) based on 80% of minimum flow as limit for extraction. This withdrawal rate is more than thrice the present abstraction from the river. The bulk water supplier could also immediately meet additional demands of 10,000 cumd, considering that the design capacity of the plant is 30,000 cumd and current production is about 20,000 cumd. Groundwater from additional wells in the Bogna Wellfield or other areas northeast of the city center. A geo-resistivity survey was undertaken in the vicinity of the Bogna and Mabinit Wellfields to determine the composition of sub-surface formations, depth of potential aquifer layers and for selection of the most feasible site/s for well drilling (locations are shown on Figure 3.1). The third electrostratigraphic layer that exhibited resistivity values of ohm-meter is identified as the potential aquifer section in Barangay Mabinit and Barangay Bogna that can be tapped through wells drilled to 165 meters in the vicinity of VES 1 and 142 meters in the vicinity of VES 4. It is clear from these results that the existing Legazpi City Water District wells in Barangay Bogna and Barangay Mabinit are partially penetrating the potential aquifer layer and therefore if additional wells are to be drilled in the Bogna and Mabinit Wellfields or other areas northeast of Legazpi City, the wells are to be drilled deeper to fully tap the potential aquifer identified in the geo-resistivity survey. Well Depth : 120 meters Well Diameter : 300 mm Expected Yield : lps Expected Drawdown : meters. The expansion area identified by the water district and the city government covering Barangay Taysan could be supplied from the Bogna and Mabinit Wellfields, surface water from the Yawa River or from wells drilled in Barangay Taysan. Yields of new wells to be drilled in Barangay Taysan are expected to be at least 5 lps. To determine the depth and lateral extent of potential aquifers in the area, a geo-resistivity survey consisting of ten (10) Vertical Soundings was conducted in May Based on the results of the geo-resistivity survey, the fourth electrostratigraphic layer that exhibited resistivity values of ohm-meter is identified as the potential aquifer section that can be tapped through wells drilled to 180 meters in the vicinity of VES 5 and to 200 meters in the vicinity of VES 9. Well Depth : meters Well Diameter : 200 mm Expected Yield : lps Expected Drawdown : meters

185 36 Supplementary Appendix D Figure 3.1: Georesistivity Survey Locations in Legazpi Area, LCWD Source: Geo-resistivity Survey Report, WATCON, Inc., June 2009.

186 37 Supplementary Appendix D 3.2 System Expansion/ New Works - LCWD Rationale for Subproject The proposed improvement and expansion shall address the future water requirement in the year 2015, 2020 and up to the design period Water Supply Recommended Plan The proposed system is shown on Figure 3.2. (i) Water Source Taking into account the cost of water, the following water sources are hereby recommended: Re-commissioning of nine (9) existing wells at Bogna and Mabinit Well Fields: Since the nine (9) existing wells with a discharge capacity of 8,984 cumd are in place, re-commissioning of these sources is recommended; these are Bogna well Nos. 1, 2, 4, 5, 6 and 8, and Mabinit well Nos. 2, 3 and 6. By 2010, it is projected that LCWD will require an additional 3,828 cumd to sustain its operation. The additional demand will increase to 8,307cumd by 2015, 11,794 cumd by 2020 and 15,159 cumd by Recommissioning these 9 existing wells by year 2010 will save LCWD approximately PhP185 million from 2010 to The remaining water requirement of LCWD for the year 2020 to 2025 would be reduced to 6,000 cumd. Well Sources for Barangays Taysan, Maslog, Lamba and Banquerohan: For the expansion areas covering Barangay Taysan, Lamba and Maslog, an additional well supplying an independent system is recommended, since the service area is about four (4) kilometers away from the existing network. The additional well with a capacity of 1,720 cumd will augment the existing well source (400 cumd) to address the 2025 water requirement of Barangay Taysan estimated at around 2,000 cumd. Provision of 1 new well is likewise recommended for Barangay Banquerohan. (ii) Storage Facility For the main system, no additional storage facility is recommended if the additional water source is tapped from existing and new well sources at Bogna and Mabinit well field. For the expansion area, recommended storage type and capacity is shown in Table 3.1. Table 3.1: Storage Requirement for Expansion Area - LCWD Reservoir Location Type Capacity Barangay Taysan Elevated Steel Reservoir 300 cubic meters Barangay Banquerohan Elevated Steel Reservoir 200 cubic meters

187 38 Supplementary Appendix D Figure 3.2: Schematic of Proposed Water Supply Improvements LCWD

188 39 Supplementary Appendix D (iii) Transmission/Distribution Pipelines For the main system, reinforcement pipes are recommended at various sections of the distribution network to accommodate the 2025 flow and minimum pressure requirement within LCWD main service area. Hydraulic calculations shall be performed during the detailed engineering design stage to confirmed the types and diameters of reinforcement pipes at various sections of the transmission pipeline and distribution network. Hydraulic design calculations shall likewise be performed for the expansion areas consisting of two (2) independent systems for Taysan and Banquerohan respectively. (iv) Service Connections The service connection is expected to increase from the existing 16,934 to 24,929 by the design year The additional 7,995 service connections will come from the unserved portions within the main service area and the four (4) barangays in the proposed expansion areas. 3.3 Non Revenue Water (NRW) LCWD NRW improvement has been considered in terms of both asset and operational activity improvement. These are reported on separately below NRW Asset Improvement There is scope for investment in NRW reduction by LCWD in a limited number of areas. The types of investment that should be considered are itemized below with a brief summary of the rationale for the investment. Flow Measurement Macro Level. The principal water sources are measured on a continuous basis. There is no immediate need for additional source metering. District Metering. In order to target operational resources and investment, the division of water networks by means of district metering is commonly undertaken. This is particularly useful when NRW levels are relatively low, either to make further reductions or to sustain the achieved levels of NRW into the future. The size of district meter area depends on a number of factors including network layout and connectivity, investment and operating cost of installed infrastructure, resources available to manage and monitor, etc. As a first step for costing purposes, it is proposed that areas between 3,000 and 5,000 connections are set up. At the moment, there is no metering within the LCWD distribution network to determine the amount of water going in any direction. As currently operated, the system could be split into 6 distribution areas as follows: Buraguis pumped supply area, Legazpi southeast, Legazpi south west, Bonga, spring area and coast central area. The Buraguis area is already operating as a discrete supply area and only requires a 150mm meter to be added on the outlet of the booster station with 2 units isolating valves.

189 40 Supplementary Appendix D Definition of boundaries for the other zones will require detailed network modeling but for costing purposes, we have assumed an equipment requirement of 2 units 200mm meters per zone plus chambers and valves, as well as 2 units 150mm isolating valves per zone. 10 no. 200 mm meters; 10 no. meter chambers; 30 no. 200mm valves; 20 no. 150mm isolating valves; DMA (district meter area) design for complex networks should be carried out using a calibrated hydraulic network model. Pressure Control. There is a very limited scope for pressure reduction. Mains Replacement. LCWD network was totally replaced in the mid-1980s using PVC pipe. There is little scope for pipe replacement in the medium term so this hasn t been included as an investment item for LCWD. Customer Meter Replacement. LCWD are already implementing a rigorous customer meter management program which is built into their current investment forecast Service connections. Service connections are mainly PE with GI stand pipes. There appears to be no need for a blanket service connection change program. Valve Rehabilitation Program. Valves are an essential component of a pipe network allowing isolation of small parts of the network so that operational situations like burst mains or interconnections can be managed without affecting large numbers of customers. The networks in LCWD appear to have a good proportion of valves. One problem with valve maintenance is the asphalting or concreting over of control valves. It is suggested that a program of valve rehabilitation be included in the investment plan for LCWD. There were no data in relation to valves and valve condition within the network. For costing purposes, a provision has been made for the 5-year investment period based on the installation of 1 valve per every 1,000 connections or about 16 valves per year. An average cost equivalent to the cost of a 150mm valve has been used; however, the provision can be used for valves of any size. Operational Systems & Equipment. There are a number of tools and types of equipment that are necessary to enable the efficient operation of a water utility. These include GIS Mapping Systems, Billing systems, Hydraulic model of the transmission and distribution systems, Meter reading recording devices and/or on the spot billing technology, Leakage detection equipment, Portable flow and pressure logging technology. GIS & Mapping. Geographical information systems technology is now well tried and tested for utility operation, and provides a very useful platform for recording details of physical assets such as location, type, age, condition; as well as for recording customer consumption, billing and payment information. LCWD has map records based on as-built construction drawings from pipeline projects over the years. These are now incorporated into the LCWD AutoCad design system which is a good basis from which to create a GIS system linking the operational and commercial aspects of the business. It is recommended that this is carried out in year 1 of the loan period.

190 41 Supplementary Appendix D Billing System. This should be reviewed at the feasibility stage to see whether it is sufficiently robust for the task and/or whether it can be further customized to the benefit of LCWD. If the system is not sufficiently robust, an alternative should be considered at the feasibility stage. Hydraulic Modeling. Construction of hydraulic models to water supply systems provide many benefits to the water utility this may be in terms of improved knowledge of network asset types and condition; better understanding of water usage across the network; use of the model to simulate changes and improvements to the network; design of district meter and pressure reduction areas; support to strategic resource planning; etc. The hydraulic model should be built with the support of consultants, but ownership and use should rest with LCWD. Leakage Detection. Provision of appropriate and adequate leakage detection and training in its use is essential if physical losses are to be managed to minimal levels. Proposed equipment listing for LCWD would be: Leak Noise Correlators 2 no. Electronic listening equipment 4 units Pipe locating equipment metallic and non-metallic 2 sets. Noise loggers 3 sets. Flow and Pressure Monitoring Equipment. Sufficient flow and pressure data logging equipment should be provided to allow field testing of the largest district area over an extended time period. Dual flow & pressure loggers 20 no. Single channel pressure loggers 30 no. Heavy duty laptop computers 3 no. Provision should also be made for maintenance and replacement of this equipment and associated batteries, cables etc. Summary of Capital Investment Requirements. Table 3.2 is a summary of the assets included in the capital investment requirements NRW Recommended Operational Activity Improvements Leak Detection and Repair. LCWD is not proactively carrying out leak detection and repair activity. These are key activities in the reduction and control of NRW. Further, the analysis of ILI indicates a relatively good network condition. This being the case, leak detection and repair (as opposed to mains and service replacement, etc.) becomes the prime means of loss reduction and control. It is suggested that LCWD set up a team to more proactively manage leak detection and repair this could be either in-house or could be contracted out either on a rate basis or a performance basis or combination of both with supervision responsibility remaining with LCWD. The current level of leaks within the system is unknown; however, an attempt at estimating the number of leaks has been made, the results of which are shown in Table 3.3. No attempt has been made to attribute savings to the leaks repaired. LCWD should ensure that adequate budget for leak repair is provided in their expense forecast.

191 42 Supplementary Appendix D Table 3.2: NRW Capital Investment Requirements - LCWD Expenditure Type NRW MANAGEMENT/CONTROL COSTS Production Metering District Metering Mechanical Meters Quantities Chamber construction - 2m x 1.5m x 2m 10 Network Isolation valves Leak Detection/Pipe Location Equipment Leak Noise Correlator 2 Electronic Listening Sticks 4 Noise Loggers - set 3 Pipe Location Equipment - All materials 2 Data Logging Equipment Dual Flow & Pressure Loggers 20 Pressure loggers 30 Hardware purchase - computer 1 NRW REDUCTION CAPEX Valve Rehabilitation MANAGEMENT SYSTEMS COST GIS Software Purchase 1 Hardware Purchase - Computers 1 Table 3.3: Estimated Distribution Main Line Leaks and Costs - LCWD Diameter (mm) Leaks/yr/ km Network Length (m) No. of Repairs/yr Leak Repair Cost (PhP) , , , , , , , , , , , , , ,557 TOTAL LEAKS PER YEAR 475 1,052,151 Illegal Loss Reduction. It is considered that illegal connections are not a significant problem within the Legaspi City network. However, the conversion of illegal connections to legal connections is a double win for any utility with a reduction in the NRW as well as a revenue gain for no additional production or distribution effort. It is suggested that LCWD strengthen their activity vis a vis illegal connections and consumption to ensure the best control possible of their supply. This is not an easy task and

192 43 Supplementary Appendix D is something that requires good network knowledge, incentives and penalties, effective communication and hard work in the field visiting all areas of the network. This is an area of activity that could be outsourced on a performance basis. Water Audit. It is recommended that LCWD adopt the IWA water audit methodology as a performance measurement tool. A key part of this would be to begin to record unbilled authorized consumption within the water district and using this information to inform operational decisions. Quantifying the amount of water used for operational activities would allow comparison to be made with the cost of mitigating the need for the operational use, e.g. if water used for flushing was quantified and a value assigned to it, it would be possible to calculate when remedial action such as swabbing or scouring would have a greater cost benefit. Outsourcing of Operational Services. LCWD currently carry out all operational activity inhouse. As they expand the number of connections served, there should be scope for LCWD to enter into out-sourcing contracts to support the efficient operation of the business. Similarly for specific and enhanced programs of activity (e.g. a crash leak detection and repair program) it may be beneficial to undertake some of the work through outsourcing to have a quick impact. Outsourcing can be used for many of the routine activities, either individually or in combination, e.g. Meter reading; Billing; Collection; Meter replacement; Reduction of illegal connections; Leak Detection; Leak Repair; M&E Maintenance activity; NRW reduction. All these contracts should be set up with performance in mind rewarding out performance and penalizing under performance. For performance contracts to be successful, however, the risk-reward criteria and payment mechanisms need to be clearly thought out in order to reinforce the desired performance. Such contracts should also be regarded as a partnership rather than a one sided opportunity by either party to gain benefit at the expense of the other. The use of outsourcing contracts brings with it the requirement for effective supervision this should be viewed as an opportunity to develop staff within the water district and appropriate capacity building activity undertaken NRW Capital Investment Requirement NRW reduction activities fall into both capital investment (pipelines, meters, pressure reducing valves, specialist equipment, etc.) and operational expense categories (leak repair, equipment licensing and battery replacement). Both of these categories are further described below. Capital Investment. Capital Investment costs can be broken down into investment for control and management of NRW reduction activity (production metering, district metering, specialist equipment purchase, etc.) and investment that directly leads to reduction of NRW (pipe replacement, pressure reduction, meter replacement, etc.).

193 44 Supplementary Appendix D A further type of cost presented here is for Management System Capex. This is related more to effective utility management but impacts on NRW reduction performance in terms of supporting the activities carried out in NRW management. Operational Activity Costs. Operational activity costs have also been considered in relation to NRW Control, NRW Reduction and Management Systems. NRW Control operational expense covers licensing and batteries for the Control Capex assets (leak detection equipment, data loggers etc.). NRW Reduction operational expense covers leak repair. NRW Management System operational expense covers licensing and batteries for the management system assets. Costs have been prepared for the period 2011 to 2016 consistent with the financial requirements of the PPTA for inclusion in the relevant section of the financial model for LCWD. In practice many of these types of costs will continue into the future (although at different levels) as part of a regular asset management planning process. Table 3.4 shows a summary of all proposed investment expenditure items for LCWD. Costs are in Philippine Peso. The main capital costs proposed in relation to NRW for Legaspi City are for the implementation of district metering infrastructure to facilitate better management of the existing network and the rehabilitation of valves for improved leakage and network control. This is particularly important due to the already relatively low level of losses within the system and the need for better informed management decisions to further reduce and then maintain NRW at the lowest level possible. Table 3.5 shows the detailed breakdown of these costs by expense category. Costs are in Philippine Peso. Table 3.4: Summary of Proposed NRW Investment Expenditure - LCWD EXPENSE CATEGORY NRW CONTROL CAPEX NRW REDUCTION CAPEX MANAGEMENT SYSTEM CAPEX Total Capex TOTAL % of TOTAL 5,768,000 3,867, ,635, % 213, , , , , ,639 2,136, % 795, , % 6,776,639 4,294, , , , ,639 12,566, % NRW CONTROL OPEX NRW REDUCTION OPEX MANAGEMENT SYSTEM OPEX Total Opex , , % 1,052,151 1,052,151 1,052,151 1,052,151 1,052,151 1,052,151 6,312, % 0 39,000 39,000 39,000 39,000 39, , % 1,052,151 1,091,151 1,091,151 1,166,151 1,091,151 1,091,151 6,582, % TOTAL ANNUAL TOTAL CUMULATIVE 7,828,790 5,386,024 1,518,429 1,593,429 1,518,429 1,304,790 19,149,891 7,828,790 13,214,814 14,733,243 16,326,672 17,845,101 19,149,891

194 45 Supplementary Appendix D Table 3.5: Detailed NRW Cost Breakdown - LCWD EXPENSE CATEGORY TOTAL % of TOTAL NRW CONTROL CAPEX Production Metering District Metering Leak Detection/Pipe Location Equipment Data Logging Equipment 5,768,000 3,867, ,635, % 0 3,867, ,867, % 2,350, ,350, % 3,418, ,418, % NRW REDUCTION CAPEX Customer Meter Replacement Pressure Reduction (PRVs) Mains replacement Service Pipe replacement Valve Rehabilitation 213, , , , , ,639 2,136, % % % % 213, , , , , ,639 2,136, % MANAGEMENT SYSTEM CAPEX GIS Billing System Hydraulic Modelling Meter Reading Automation MIS TOTAL CAPEX NRW CONTROL OPEX Licensing & Batteries 1,295, ,295, , , % % 500, , % % % 7,276,639 4,294, , , , ,639 13,066, , , , , % NRW REDUCTION OPEX Leak Repair 1,052,151 1,052,151 1,052,151 1,052,151 1,052,151 1,052,151 6,312,906 1,052,151 1,052,151 1,052,151 1,052,151 1,052,151 1,052,151 6,312, % MANAGEMENT SYSTEM OPEX Licensing & Batteries 0 39,000 39,000 39,000 39,000 39, , ,000 39,000 39,000 39,000 39, , % TOTAL OPEX 1,052,151 1,091,151 1,091,151 1,166,151 1,091,151 1,091,151 6,582, Implementation Schedule - LCWD At the start of subproject physical implementation in 2012, construction activities shall cover recommissioning of 9 existing wells at Bogna and Mabinit well fields, and the construction of deep well, pumping facilities, storage facilities and transmission/distribution pipelines and service connections at Barangays Taysan, Lamba, Maslog and Banquerohan. Table 3.6 presents the implementation schedule for LCWD expansion and improvement program. 3.5 Cost Estimates - LCWD The cost estimate for capital works (including NRW measures) is presented in Table 3.7, and for O&M in Table 3.8.

195 46 Supplementary Appendix D Table 3.6: Implementation Schedule LCWD CONTRACT DESCRIPTION TOTAL WATER SUPPLY Source Facilities 0% Wells 100% Spring Pumping Station 100% 100% Water Treatment Plant 0% Transmission Facilities 50% 50% 100% Storage Facilities 50% 50% 100% Distribution Facilities 0% Service Connections 100% 100% Fire Protection Facilities 0% Pressure Reducing Valves 0% NRW Reduction 54% 34% 12% 100% Zone Meters 0% Internal Networks 0% Stored Materials 0% Resettlement Cost Land Acquisition 100% 100% Detailed Engineering Design 100% 100%

196 47 Supplementary Appendix D Table 3.7: Total Capital Cost Estimate LCWD COST ITEM UNIT QUANTITY UNIT COST TOTAL A. INVESTMENT FOR FACILITIES I. ENGINEERING BASIC COST ITEMS 1.0 SOURCE FACILITIES Re-commissioning of 9 existing wells at Bogna and Mabinit New Banquerohan Deepwell ( 1 unit, 200mm x 200m) New Taysan Deepwell ( 1 unit, 200mm x 200m) TOTAL 2.0 PUMPING STATION 50 Hp Submesible Pump Electrical Works Vallves, fittings,and meter Transformer and accessories TOTAL 3.0 STORAGE FACILITIES Concrete Ground Reservoir (Taysan) Concrete Ground Reservoir (Banquerohan) TOTAL 4.0 TRANSMISSION/DISTRIBUTION FACILITIES Reinforcement Pipes (Main Service Area) New Pipes (Main Servie Area) New Pipes (Taysan, Maslog, Lamba Expansion Area) New Pipes (Banquerohan Expansion Area) TOTAL LS ,000, m ,200, m ,200, ,400, no , ls , ls , set ,400, ,800, cum ,000, cum ,000, ,000, ls ,000, ls ,000, ls ,000, ls ,000, ,000, SERVICE CONNECTIONS SUB-TOTAL 1 PHYSICAL CONTINGENCIES (10% OF SUB-TOTAL 1) ENGINEERING STUDIES (6% OF SUB-TOTAL 1+PC) CONSTRUCTION SUPERVISION (4% OFSUB-TOTAL 1+PC) TOTAL COST 1 no 7, ,992, ,192, ,019, ,230, ,498, ,941, II. NON-ENGINEERING BASIC COST ITEMS A. LAND ACQUISITION CONTINGENCIES (5% OF A) TOTAL COST 2 TOTAL PROJECT COST ,000, , ,100, ,041, B. INVESTMENT EXPENDITURES FOR NRW I. CAPITAL EXPENDITURES 1.0 NRW Control Capex 9,635, NRW Reduction Capex 2,136, Management System Capex TOTAL 795, ,566, II. OPERATIONAL EXPENDITURES 1.0 NRW Control Opex 75, NRW Reduction Opex 6,312, Management System Opex TOTAL 195, ,582, TOTAL NRW INVESTMENT COST 19,149, TOTAL INVESTMENT COST 117,191,390.00

197 48 Supplementary Appendix D Table 3.8: Operation and Maintenance Cost Estimate - LCWD YEAR NO. OF CONN. MAX. DEMAND/D SALARIES POWER CHEMICALS MAINTENANCE OTHER O&M TOTAL Assumptions: 1. Compensation package per employee = P 19, per month. No. of connections/employee Power Cost estimated at P 0.30 per cu.m from and P 1.50 per cu. m of water produced from 2014 onwards with the inclusion of well operations. 3. Chemical Cost estimated at P 0.36 per cu. m of water produced starting Maintenance Cost for the Facilties estimated at P per connection. 5. Miscellaneous Cost estimated at P 4, per connection.

198 49 Supplementary Appendix D 4 METRO LEYTE CITY WATER DISTRICT 4.1 Potential Water Source(s) The only potential water source for the improvement and expansion projects of the water district is surface water from the Binahaan River. An intake near the existing rapid sand filtration plant in Barangay Tingib, Pastrana, Leyte is proposed. Placing the intake structure at the lower reaches of the river is not recommended as it will require pumping, and the water is contaminated with agricultural pesticides and fertilizers. Also, the lower reaches of existing river systems are reportedly characterized by schistosomiases-causing larvae. The water district at present is utilizing only a third of the water rights granted by the NWRB, and the excess flows of the river are capable of meeting any additional demands of the water district. 4.2 Recommended Plan The original Recommended Plan as outlined in the Draft Final Report (November 2009) was based on the construction of a new water treatment plant, the installation of a new transmission pipeline and the NRW improvement measures. The estimated cost represented about half of the total cost of the Project (WDDSP). However, results of the economic evaluation showed that the proposed investment for the above-mentioned works is not viable. Subsequently, LMWD is proposing to tap the Malirong Dam as a possible alternative source of water supply to augment the needs of Tacloban City. The WD intends to utilize the overflow from the dam. The dam is closer to Tacloban City and that would mean having a shorter transmission line than the original source (Binahaan River). The National Irrigation Administration (NIA) owns the dam and the water rights but at present it is not known whether NIA are willing to share the water. LMWD is requesting for a re-evaluation/reassessment of the subproject as this will greatly reduce the subproject cost. Within the sector loan framework, it is recommended that the subproject is to be implemented in two (2) phases. Phase 1 will focus on the NRW reduction activities, and Phase 2 for the expansion works from the alternative source which shall be developed and implemented during the loan implementation. Phase 2 may include another NRW reduction program. The scope of work covered by Phase 1 is as follows: ο ο ο NRW management and control which includes production metering, district metering, purchase of leak detection/ pipe location equipment and data logging equipment. NRW reduction which involves customer meter replacement, mains replacement, service pipe replacement, pressure reduction and valve rehabilitation. NRW management system which includes GIS and hydraulic modelling Projected Annual Number of Connections and Water Demand The NRW reduction program will be implemented in six (6) years, from 2011 to Table 4.1 shows the projected annual number of connections and water demand for the implementation of Phase 1.

199 50 Supplementary Appendix D Table 4.1: Projected Annual Number of Connections and Water Demand - Phase 1

200 51 Supplementary Appendix D Served Population Projections Consequently, served population projections were updated due to the effects of Phase 1. Table 4.2 presents the annual served population projections. Table 4.2: Annual Service Area and Served Population Projections - Phase Capital Cost The cost estimate was based on the 2009 In-Place Cost of Waterworks Materials and Facilities of LWUA and from costs provided by the Engineering Department of Maynilad Water. The total project cost is estimated to be PhP 131,401, as presented in Table 4.3.

201 52 Supplementary Appendix D Table 4.3: Estimate of Capital Cost - Phase 1

202 53 Supplementary Appendix D Operation and Maintenance Cost The projected annual operation and maintenance costs when there is Phase 1 are presented in Table 4.4. The costs include manpower, power, chemical, maintenance and miscellaneous costs. Table 4.4: Projected Annual Operation and Maintenance Costs - Phase 1 Assumptions: 1. Compensation package per employee = P 7, per month. No. of connection/employee= Power Cost estimated at P0.05/ cum of water produced. 3. Chemical Cost estimated at P0.36/ cum of water produced. 4. Maintenance Cost for the Facilities estimated at P251.18/connection. 5. Miscellaneous Cost estimated at P2,647.22/connection Implementation Schedule NRW reduction activities will last for six 6 years starting 2011 and ending in Figure 4.1 shows the implementation schedule.

203 54 Supplementary Appendix D Figure 4.1: Water Supply Implementation Schedule - Phase Procurement Packaging Philippine government bidding rules and regulations and ADB bidding guidelines shall apply to the procurement of contractor/s and supplier/s. The WD Bids and Awards Committee (BAC) shall handle the tendering process while the Water District Implementing Unit (WDIU) shall be in-charge during construction. Phase 1 can be packaged into one (1) contract or maybe into two (2) or more contracts. Supplementary Appendix E outlines options for performance-based contracts. The Project Management Advisory Consultants (PMAC) will be involved during Phase 1 implementation. 4.3 Original Design for Rehabilitation and New Works as in DFR - LMWD Rationale for Subproject This subproject aims to bring out the realization of an improved water supply system of LMWD with due considerations to the amount of water to be supplied to meet the projected water demand for the design year Recommended Plan The Recommended Plan includes the construction of a new water treatment plant and the installation of a new transmission pipeline. The scope of work covered by the recommended plan is as follows: o o o o o Construction of a new Water Treatment Plant (WTP), conventional-type, rapid gravity filtration, in Brgy. Hibunawon, Jaro, Leyte with a capacity of 30,000 cum/day of treated water. Installation of a new raw and treated water transmission pipeline with a total length of 39,484 lm and with size of 600 mm Ø. NRW Reduction activities. Land Acquisition for the sites of the sand/grit remover and the settling basin (part of intake structure). Implementation of resettlement plan. Refer to Figure 4.2 for the schematic diagram of the proposed infrastructures. The description of the proposed improvements follows.

204 55 Supplementary Appendix D Figure 4.2: Schematic of Proposed Water Supply Improvements - LMWD

205 56 Supplementary Appendix D (i) Water Treatment Plant Results of the water demand projections showed that the maximum day demand for the design year 2025 is lps. At present, the total combined supply from the three (3) existing sources of LMWD, all of which are surface water, is 455 lps. The supply that would come from the Tolosa (2.5 lps) and San Gerardo (2 lps) wells was not considered because they are to be abandoned later due to the non-viability of the wells. Hence, additional supply of lps or 27, cum/day is necessary. However, a capacity of 30,000 cum/day (347 lps) for the new WTP was considered for this study. This is because the available data at hand is for the 30,000 cum/day capacity and, in order to facilitate the preparation of concept design and cost estimate, these data were used as references. Since groundwater availability within the service area of LMWD is poor, the only potential and viable source of the water supply of LMWD is the surface water from the Binahaan River.In this regard, a new water treatment plant will be constructed near the existing WTP of LMWD in Brgy. Hibunawon, Jaro, Leyte (except the existing sludge lagoon which is located in Brgy. Tingib, Pastrana, Leyte) with a production capacity of 30,000 cum/day or about 347 lps. The new intake structure will be located at upstream of Binahaan River in Brgy. San Agustin, Jaro, Leyte where the existing intake structure is also located. The new treatment plant will be based on the conventional processes i.e. coagulation-flocculationsedimentation-filtration-disinfection and will consist of the intake structure, coagulation and flocculation tanks, clarifiers, rapid filters, control room, laboratory building, clear water reservoir, chemical building, power house with genset and sludge lagoon. The new water treatment plant will produce an effluent with turbidity not exceeding 5 NTU as prescribed by the Philippine National Standards for Drinking Water (PNSDW). The plant will be automated and will be provided with adequate controls. The plant will have 2 production lines. Intake Structure. The intake structure shall consist of 3 components, namely: an ogee dam with intake weir, the sand/ grit remover and the settling basin with bar screen. Coagulation and Flocculation Tanks. The plant is to be provided with 1 chemical mixing chamber equipped with rapid mechanical mixer, and 4 flocculation basins (2 per line); each basin is provided with slow mechanical mixer. Clarifiers. There will be 2 sedimentation basins (1 per line), rectangular in shape and furnished with tube settlers and sludge collectors. Rapid Filters. There will be 4 rapid gravity filters (2 per line) equipped with floor drain system and automatic backwash system (i.e. surface wash with air scour process). The dual filter media will consist of anthracite and silica sand. Control Room and Laboratory Building. The control room and laboratory building will be located on top of the rapid filters. Clear Water Reservoir. The clear or treated water reservoir will consist of 2 chambers each with a capacity of 1,500 cum. Chemical Building. The chemical building will accommodate among others, the chemical feed systems, receiving tank systems, dosing pump systems and the chlorination facilities. The chemicals to be used are the alum, polymers, lime and chlorine gas. Power House with Genset. The power house will accommodate the genset which will be used for standby power.

206 57 Supplementary Appendix D Sludge Lagoon. The sludge lagoon will consist of an overflow weir interconnected to drain or river. The sludge will be extracted and will be put on drying beds. The dry sludge will be disposed into an authorized dumping site. (ii) Transmission Facilities A total of 39,484 lm of 600 mm Ø steel transmission pipelines, cement-coated and cementlined, will be installed that will end at the existing Utap Hill concrete ground reservoir located in the Tacloban City proper after passing through the town proper of Pastrana, Sta Fe and Palo via the National Highway. In Tacloban City, the pipeline will traverse the Maharlika Highway, then the Rizal Avenue Extension and the Imelda Avenue before the pipeline connects to the existing Utap reservoir. The total length consists of 2,766 lm of raw water pipelines and 36,718 lm of treated water pipelines. 4.4 NRW Reduction Activities Funds will be provided for the NRW capital investment requirements spread over the 6-year program that will start NRW reduction activities are needed to meet the targets during the design period. Please refer to Table 4.5 for the capital investment requirements. The complete details of the NRW Reduction Program showing the strategies, benefits, water savings/recovery and payback periods against investments are contained in Attachment 3.

207 58 Supplementary Appendix D Table 4.5: NRW Capital Investment Requirements - LMWD

208 59 Supplementary Appendix D 4.5 Water Supply Cost Estimate LMWD Capital Cost The cost estimate was based on the 2009 In-Place Cost of Waterworks Materials and Facilities of LWUA and on submitted quotations from suppliers. The total project cost is estimated to be PhP 1,191,998, ($24.8 million) as presented in Table 4.6. Table 4.6: Estimate of Water Supply Capital Cost - LMWD

209 60 Supplementary Appendix D Operation and Maintenance Cost The annual Operation and Maintenance costs from the Year 2009 to 2025 include manpower, power, chemical, maintenance and miscellaneous costs which are shown in Table 4.7. Table 4.7: Annual Operation and Maintenance Cost - LMWD Assumptions: 1. Compensation package per employee = P 7, per month. No. of connection/employee= Power Cost estimated at P0.05/ cum of water produced. 3. Chemical Cost estimated at P0.36/ cum of water produced. 4. Maintenance Cost for the Facilities estimated at P251.18/connection. 5. Miscellaneous Cost estimated at P 2,647.22/connection. 4.6 System Operation and Maintenance Treated water from the new treatment plant will be conveyed by gravity directly to the existing Utap reservoir through a new transmission pipeline. Once the subproject is completed, the existing Utap reservoir will then be operating on a fill and draw scheme instead of floating in the line scheme. The whole system will be maintained by monitoring the performance of the plants, doing preventive maintenance on water treatment equipment, conducting system pressure measurements, flushing of pipelines, doing valve exercises, cleaning of reservoirs and undertaking physical, chemical and bacteriological analysis of the water being supplied to the consumers.

210 61 Supplementary Appendix D 4.7 Implementation Schedule Detailed Engineering Design will be implemented mid of 2011 and is expected to be completed before Construction of the proposed water treatment plant and transmission facilities will start in January 2012 and will be completed in December NRW reduction activities will have a separate program that will last for 6 years starting 2011 and ending in Figure 4.3 shows the implementation schedule. Figure 4.3: Water Supply Implementation Schedule - LMWD 4.8 Procurement Packaging Since the cost of the subproject is too high, the possibility of having more than one lender to finance the project is inevitable. Because of this scenario, the whole subproject will be divided into several contract packages with funding coming from different sources, and therefore this will lead to procurement of more than one contractor. Moreover, it is appropriate that consultants prepare the detailed engineering design and cost estimates for each contract package.

211 62 Supplementary Appendix D 5 CITY OF KORONADAL WATER DISTRICT 5.1 Potential Water Source(s) The potential water source for the improvement and expansion projects of the water district is groundwater through wells. Existing water district wells showed that productive wells can be drilled and developed in the area. Although most of the existing wells showed high concentration of manganese, the newly drilled Sta. Cruz Well located southwest of the City of Koronadal center showed better water quality when compared with the wells drilled to the north and to the southeast. Geo-resistivity surveys carried out by the LWUA in April 2008 and August 2008, identified several areas as potential wellfields. Due to water quality problems among wells drilled southeast and north of the city center, the new wells must be drilled to the west and southwest of the city in the general area of the Sta. Cruz Well. The first well is recommended to be drilled in the vicinity of the proposed government center near KOR 108 to tap the section that exhibited resistivity of 54 ohm-meter determined below 38 meters. Well Depth : 120 meters Well Diameter : 250 mm Expected Yield : 20 lps (1,728 cumd) Expected Drawdown : meters 5.2 Outline Designs for Rehabilitation and New Works - CKWD Rationale for Subproject There is a need to increase water production since Koronadal City is planned to become the regional center for Region 12 until 2010 (transfer of regional offices from other provinces, and associated in-migration). This subproject aims to improve the water supply system of CKWD in order to meet the projected water demand for the design year 2025, both in the existing and proposed service areas Recommended Plan for System Expansion The Recommended Plan includes the development of new source facilities, construction of new pumping facilities, provision of new treatment facilities, installation of new transmission and distribution pipelines, construction of a new storage tank and provision of new service connections. The scope of work covered by the recommended plan is as follows: 1. Construction of four (4) new wells located in the Carpenter Hill wellfield. 2. Construction of four (4) new well pump stations. 3. Provision of a hypochlorinator for each pump station. 4. Installation of new transmission and distribution pipelines. 5. Construction of 2,200 cum. concrete ground reservoir at Brgy. Sarabia. 6. Installation of 1,000 sets of new service connections. 7. Procurement of operational systems and equipment (NRW). 8. Land acquisition for the new well sites and reservoir site.

212 63 Supplementary Appendix D Refer to Figure 5.1 for the schematic diagram of the proposed improvements. The description of the proposed improvements follows. Source Facilities. The projected maximum day demand of CKWD for the year 2025 is lps and it will be supplied by the following: a) Utilization of the nine (9) existing wells which could deliver a total capacity of about lps. Four of these wells are under the LWUA-funded project, having an assumed capacity of 20 lps per well for a total of 80 lps. b) Construction of four (4) new wells at the Carpenter Hill wellfield which is expected to yield a total of 80 lps. The design parameters of the wells are: Well No.1 Well No.2 Well No.3 Well No.4 Total Depth 120 m 120 m 120 m 120 m Borehole Diameter 400 mm 400 mm 400 mm 400 mm Casing Diameter 250 mm 250 mm 250 mm 250 mm Screen Diameter 250 mm 250 mm 250 mm 250 mm Expected Yield 20 lps 20 lps 20 lps 20 lps Pumping Facilities. Four (4) new well pump stations will be constructed that will consist of a pump house and security fence. Each pump station will be equipped with a 30 HP submersible pump, motor and accessories, including the motor control, capable of producing 20 lps. All pump stations shall be provided with discharge pipe assembly that includes the production meter. Each pump station shall be energized by providing 3 units 25 KVA distribution transformers, 3-phase power line extension and demand (KWH) meter. Each pump station shall also be equipped with 80 KVA diesel generator set for standby power. Treatment Facilities. The four (4) new well pump stations will be provided with a hypochlorinator to disinfect the water being withdrawn from the new sources. Transmission and Distribution Facilities. Transmission and distribution pipelines will be installed in Brgys. Caloocan, Carpenter Hill, Concepcion, Namnama and Sarabia, with sizes ranging from 50 mm Ø to 250 mm Ø. This item of work is assumed a lump sum item, and the cost represents approximately 40% of the basic construction cost. Storage Facilities. Since the emergency volume requirement seldom occurs simultaneously with the operational volume requirement, and in order to reduce capital cost, the larger of the two volumes will be used to satisfy both requirements. The operational volume requirement which is larger than the emergency volume requirement is calculated to have a capacity of 3,000 cum, as indicated in Table 7.2 of Chapter 7. The existing 800 cu.m. concrete ground reservoir at Brgy. Zone IV will be retained. Therefore, an additional 2,200 cum concrete ground reservoir will be constructed at Brgy. Sarabia. Service Connections. A total of 1,000 new service connections will be financed by the Project and will be installed during the construction period. The cost does not include the water meter, which will be supplied by the water district.

213 64 Supplementary Appendix D Figure 8.1: Schematic of Proposed Water Supply Improvements - CKWD

214 65 Supplementary Appendix D NRW Reduction Activity Funds will be provided to purchase operational systems and equipment designed to manage and control NRW. The cost is categorized as a capital expense. The cost requirements are enumerated in Table 5.1. The complete details of the NRW Reduction Program showing the strategies, benefits, water savings/recovery and payback periods against investments are contained in Attachment 4. Table 5.1: Proposed Non Revenue Water Measures - CKWD Description Qty Leak Detection/ Pipe Location Equipment Leak Noise Correlator 1 Electronic Listening Sticks 3 Noise Loggers 3 Pipe Location Equipment- All Materials 2 Data Logging Equipment Dual Flow & Pressure Loggers 10 Pressure Loggers 20 Hardware Purchase-computer 2 GIS Software Purchase 1 Hardware Purchase-Computers 1 Hydraulic Modeling Software- Epanet Freeware 1 Hardware Purchase-Computers 1 Model Building Cost Estimates - CKWD Capital Costs The cost estimate was based on the 2009 In-Place Cost of Waterworks Materials and Facilities of LWUA and on submitted quotations from suppliers. The total project cost is estimated to be PhP 157,081,064.93, as presented in Table 5.2.

215 66 Supplementary Appendix D Table 5.2: Estimate of Water Supply Capital Cost - CKWD

216 67 Supplementary Appendix D Operation and Maintenance Cost The annual Operation and Maintenance costs from the Year 2009 to 2025 include manpower, power, chemical, maintenance and miscellaneous costs, which are shown in Table 5.3. Table 5.3: Annual Water Supply Operation and Maintenance Cost - CKWD Assumptions: 1. Compensation package per employee = P 12, per month. No. of connection/employee= Power Cost estimated at P1.82/ cum of water produced. 3. Chemical Cost estimated at P0.13/ cum of water produced. 4. Maintenance Cost for the Facilities estimated at P129.82/connection. 5. Miscellaneous Cost estimated at P1,191.62/connection. 5.4 System Operation and Maintenance The existing and proposed barangays included in the service area will be served by one integrated water supply system. The system will utilize groundwater through the existing and proposed wells. The total supply from the well sources would be enough to meet the average and maximum day demands of the system. The peak hour demand would be adequately met by supply coming from the existing 800 cum. concrete ground reservoir and from the proposed 2,200 cum. concrete ground reservoir; both reservoirs will operate on a floating on the line scheme. During minimum demand, however, not all well sources will be utilized, to minimize excessive pressure build-up within the distribution system. Water will be disinfected prior to distribution to the system. The system will be maintained by performing pump testing, conducting system pressure measurements, flushing of pipelines, doing valve exercises, cleaning of reservoirs and undertaking physical, chemical and bacteriological analysis of the water being supplied to the consumers.

217 68 Supplementary Appendix D 5.5 Implementation Schedule The subproject is scheduled to start in July 2011 with the procurement of NRW operational system and equipment. Then, well drilling follows after this activity. After confirmation of the wells of their quality, quantity and location, the detailed engineering design will commence. The construction of civil works will start after the detailed engineering design. The subproject is targeted to be completed in December Figure 5.2 shows the implementation schedule. Figure 5.2: Water Supply Implementation Schedule - CKWD 5.6 Procurement Packaging It is convenient and advantageous to procure a main contractor to undertake all the activities under a Design-Build scheme. However, for the well drilling activity, the main contractor is supposed to have an approved drilling sub-contractor.

218 69 Supplementary Appendix D ATTACHMENT 1: NRW IMPROVEMENT MEASURES- MLUWD NRW improvement has been considered in terms of both asset and operational activity improvement. These are reported on separately below. NRW ASSET IMPROVEMENT There is scope for investment in NRW reduction by MLUWD in a number of areas. The types of investment that should be considered are itemized below with a brief summary of the rationale for the investment. Flow Measurement Macro Level MLUWD have comprehensive production source metering in place this is reflected in the reported level of NRW which in 2008 was 53%. Only one production meter was reported as being defective this was the outlet of San Gabriel reservoir. It is anticipated by MLUWD that this will be replaced within the next year, so it has not been included for in the investment expenditure. Future replacement of meters should be carried out in accordance with the useful life. District Metering In order to target operational resources and investment, the division of water networks into discrete areas into which flows are continuously measured is commonly undertaken (district metering). This is particularly useful when NRW levels are relatively low, either to make further reductions or to sustain the achieved levels of NRW into the future. The size of district meter area depends on a number of factors, including network layout and connectivity; investment and operating cost of installed infrastructure; resources available to manage and monitor; etc. As a first step for costing purposes it is proposed that areas of between 3,000 and 5,000 connections are set up. The meter installation should be provided with a bypass in order that meter maintenance can be easily undertaken the bypass should be sized as one diameter lower than the main line. Estimated requirements are given below: Bacnotan. There is no need currently to subdivide the measurement of flow in Bacnotan area. The outlet flow meter on the service reservoir is sufficient to provide the level of control an understanding necessary in this small system. San Juan. San Juan has a small number of connections that would currently only merit one district meter area based on number of connections. The town is supplied from the transmission main between San Gabriel and San Fernando city; however, none of the off-takes from the transmission mains are currently metered. To simplify the measurement of flow in both the transmission and distribution systems in this area it is proposed to install flow meters on both transmission mains upstream and downstream of San Juan. On the upstream side of San Juan the meters should be installed before the off-takes to Barangay Cacapian and Barangay Sta. Rosa; on the downstream side of San Juan they should be installed after the off-takes to Egida compound and Villa San Juan.

219 70 Supplementary Appendix D A total of 4 no. 250mm meters will be required; 12 no. isolation valves and 4 no. meter chambers. Installation of these four meters will allow step testing to be carried out within the area to identify areas of highest loss. San Fernando City. San Fernando has the most complex distribution system, with more than 4,500 connections. As with San Juan it is probably most effective at this stage to measure the flow into San Fernando through both transmission mains from San Juan as well as from Bauang. The high level area supplied from Service Reservoir No.2 should also be continuously metered. By measuring the flow in this way it will also be possible to monitor the losses along the transmission lines from San Juan to San Fernando. This will require 1 no. 250 mm meter on each of the transmission mains from San Juan located upstream of the 50mm off-take to the Oceana Apartment; and 1 no. 250 mm meter on the transmission main from Bauang to San Fernando to the south of the off-take along Carabasa Road. In addition, a flow meter should be installed on each of the 250mm outlets of the two high level reservoirs in San Fernando to measure fire-fighting flow when it occurs, and the high level housing area in San Fernando. A total of 5 no. of 250mm meters will be required; 15 no. of isolation valves and 5 no. chambers. Bauang. Bauang currently contains around 2,500 connections. Assuming that the flow to San Fernando from Bauang is measured (see above) there is no need at this stage to install further metering to measure flows in the Bauang area. Pressure Control Transmission Main Pressure Control. The main source of water for the network comes from San Gabriel and is transmitted by gravity approximately north-south to San Fernando city. The distance is considerable and high pressures are required at the source end in order to ensure supply to San Fernando City. Pressures in the transmission at San Juan are around 100 psi (70m) and entering San Fernando are around 60 psi (40m) whilst this is necessary for the transmission it is quite likely that this too high for the distribution off the transmission main, and the use of pressure reduction off the transmission mains should be evaluated. Distribution Main Pressure Control. Pressures within the distribution networks operated by MLUWD differ quite significantly. There is likely to be scope for pressure reduction in the San Juan distribution network given the transmission main pressure of 70m reported above. The scope for pressure reduction in San Fernando and Bauang is less certain and can only be assessed after more rigorous analysis. For purposes of preliminary costing a provision has been included for pressure reduction in the San Juan area. This includes for 3 no. 150mm PRVs; 9 no. 150mm isolation valves; and 3 no. PRV chambers. Mains Replacement A key component in the reduction of NRW is the replacement of leaking mains. In the absence of detailed condition information an estimate of the required investment in mains replacement can be made from knowledge of the existing network materials and general characteristics of these mains.

220 71 Supplementary Appendix D ACP accounts for approximately 50% of the MLUWD network (see details in Supplementary Appendix C); however, its condition is considered, by water district staff, to be poor. For estimating purposes provision has been made for replacing the ACP within the distribution at the rate of 8 km per year, commencing with the smallest size first further detailed analysis will be required to confirm the scheduling of replacement. Customer Meter Replacement The age of meters in use in MLUWD is wide ranging. At present the company doesn t have a policy or programme for proactive customer meter replacement. MLUWD does have meter testing facility where it tests meters that have been reported as not reading properly. An interesting finding has been the potential of customer meters to over-read on what would appear to be a significant basis (around 50% of meters tested by MLUWD meter testing team were found to be over-reading) reasons suggested for this are inclusion of air within the mains and secretion of fine sand coating within velocity flow meters. Further analysis of this is suggested during the feasibility stage of the project preparation as this may have an effect on the impact of meter replacement programs. Customer meter management usually has two components: planned meter replacement, and ad-hoc meter replacement. Planned meter replacement policy tends typically to be based on a fixed period for replacement usually between 5 and 10 years depending on the particular company, requiring meter change out irrespective of actual performance. Ad-hoc meter replacement is carried out based on meter condition as reported by meter readers, customers etc., and analysis of historic meter readings as part of the billing process. Given the problem of meter blockage that is experienced in MLUWD a meter management program similar to that in place in Legazpi would probably be of benefit to MLUWD. For this reason no planned replacement program is suggested; however, it would be prudent to assume a high degree of replacement is required in the initial years of the refurbishment program, requiring purchase of new meters for initial replacement. Provision has been made for replacement of 50% of the existing meter stock over the investment period i.e. 800 per year. Replacement of GI Service Connections The need for a blanket service connection change out programme depends on the condition of service pipe materials and historic installation practice. Service mains are currently being replaced by MLUWD on a needs basis, the replacement material being Poly Ethylene (PE). It was estimated by MLUWD staff that around 30% of services (2,400 in number) are GI. Based on this, a cost provision has been included for replacing these over a period of 3 years 800 per year. Valve Rehabilitation Program Valves are an essential component of a pipe network, allowing isolation of small parts of the network so that operational situations like burst mains or interconnections can be managed without affecting large numbers of customers.

221 72 Supplementary Appendix D The networks in MLUWD appear to have a good proportion of valves around 350 for the whole system. One problem with valve maintenance faced by most water districts is the asphalting or concreting over of control valves it is suggested that a program of valve rehabilitation be included in the investment plan for MLUWD. For costing purposes a provision has been made for the 5-year investment period based on the installation of 1 valve per every 1,000 connections. An average cost equivalent to the cost of a 150mm valve has been used; however, the provision can be used for valves of any size. Based on this a total of 8 valves will be replaced per year. Operational Systems and Equipment There are a number of tools and types of equipment that are necessary to enable the efficient operation of a water utility. These include: GIS Mapping Systems; Billing systems; Hydraulic model of the transmission and distribution systems; Meter reading recording devices and/or on the spot billing technology; Leakage detection equipment; Portable flow and pressure logging technology. GIS and Mapping. Geographical information systems technology is now well tried and tested for utility operation and provides a very useful platform for recording details of physical assets location, type, age, condition; as well as for recording customer consumption, billing and payment information. MLUWD has very rudimentary map records, based on as-built construction drawings from pipeline projects over the years. There would be very large benefits of creating a GIS for the MLUWD. Billing System. MLUWD billing system should be reviewed at the WDDSP feasibility stage to see whether it is sufficiently robust for the task and/or whether it can be further customized to the benefit of MLUWD. If the system is not sufficiently robust alternative options should be considered at the feasibility stage. Hydraulic Modelling. Construction of hydraulic models to water supply systems provides many benefits to the water utility. This may be in terms of improved knowledge of network asset types and condition; better understanding of water usage across the network; use of the model to simulate changes and improvements to the network; design of district meter and pressure reduction areas; support to strategic resource planning; etc. The hydraulic model should be built with the support of consultants but ownership and use should rest with MLUWD. Meter Reading Automation. The automation of meter reading through the use of hand held computer technology up- and down-loaded to a computerized billing system both simplifies and speeds up the meter reading process and potential for recording and downloading errors; it also reduces the likelihood of meter fraud by restricting the information visible to the meter reader. An extension of this technology will also allow bills to be issued on the spot to customers, simplifying and speeding up the billing process. This has not been costed for as MLUWD have budget in FY 2009 for purchase of this equipment.

222 73 Supplementary Appendix D Leakage Detection. Provision of appropriate and adequate leakage detection and training in its use is essential if physical losses are to be managed to minimal levels. Proposed equipment listing for MLUWD would be: Leak Noise Correlators 2 units; Electronic listening equipment 3 units; Pipe locating equipment (all materials) 2 sets; Noise loggers 3 sets; Flow and Pressure Monitoring Equipment. Sufficient flow and pressure data logging equipment should be provided to allow field testing of the largest district area over an extended time period. Dual flow & pressure loggers 20 no. Single channel pressure loggers 30 no. Heavy duty laptop computers 1 no. Provision should also be made for maintenance and replacement of this equipment and associated batteries, cables etc. Summary of Capital Investment Requirements Table 1 is a summary of the assets included in the capital investment requirements.

223 74 Supplementary Appendix D Table 1: NRW Capital Investment Requirements - MLUWD Expenditure Item Quantities NRW MANAGEMENT/CONTROL COSTS District Metering Mechanical Meters Meter Installation valves Chamber construction - 2m x 1.5m x 2m 9 Leak Detection/Pipe Location Equipment Leak Noise Correlator 2 Electronic Listening Sticks 3 Noise Loggers - set 3 Pipe Location Equipment - All Materials 2 Data Logging Equipment Dual Flow & Pressure Loggers 20 Pressure loggers 30 Hardware purchase - computer 1 NRW REDUCTION CAPEX Customer Meter Replacement Pressure Reduction (PRVs) 1/2" Chamber construction - 2m x 1.5m x 2m 3 Isolation valves Mains replacement PVC 200 7,590 4, , ,000 8,000 8,000 1,254 Service Pipe replacement 1/2" Valve Rehabilitation MANAGEMENT SYSTEMS COST GIS Software Purchase & Implementation 1 Hardware Purchase - Computers 1 Hydraulic Modelling Software - Epanet Freeware 1 Hardware Purchase - Computers 1 Model Building 1

224 75 Supplementary Appendix D NRW OPERATIONAL ACTIVITY IMPROVEMENT Leak Detection and Repair MLUWD are not proactively carrying out leak detection and repair activity. These are key activities in the reduction and control of NRW. Further, the analysis of ILI (Infrastructure Leakage Index) (included in Supplementary Appendix C, para 114) demonstrates the need for significant improvement in the management of physical losses from the network. It is suggested that MLUWD set up a team to more proactively manage leak detection and repair this could be either in-house or could be contracted out either on a rate basis or a performance basis or combination of both with supervision responsibility remaining with MLUWD. The current level of leaks within the system is unknown; however, an attempt at estimating the number of distribution leaks (mains equal to or less than 300mm diameter) has been made based on an average number of leaks per km of main. The estimated number of leaks to be repaired per year along with an estimate of the repair cost to be included in the operational budget are shown in Table 2. No attempt has been made to attribute savings to the leaks repaired. MLUWD should ensure that adequate budget for leak repair is provided in their expense forecast. Table 2: Estimated Distribution Main Line Leaks and Costs - MLUWD Diameter (mm) Leaks/yr/ km Network Length (m) No. Of Repairs Leak Repair Cost (PhP) , , , , , , , , , , , ,725 TOTAL ,308 Illegal Loss Reduction It is considered that illegal connections are a problem within the MLUWD network. The conversion of illegal connections to legal connections is a double win for any utility, with a reduction in the NRW as well as a revenue gain for no additional production or distribution It is suggested that MLUWD set up a team to focus on the identification and subsequent conversion of illegal connections to legal paying customers. This is not an easy task and is something that requires good network knowledge, incentives and penalties, effective communication and hard work in the field visiting all areas of the network. This is an area of activity that could be outsourced on a performance basis.

225 76 Supplementary Appendix D Water Audit It is recommended that MLUWD adopt the IWA water audit methodology as described in Supplementary Appendix C, para 108, as a performance measurement tool. A key part of this is the recording of unbilled authorised consumption within the water district this is being done by MLUWD and using this information to inform operational decisions. Quantifying the amount of water used for operational activities allows comparison to be made with the cost of mitigating the need for the operational use, e.g. if water used for flushing was quantified and a value assigned to it, it would be possible to calculate when remedial action such as swabbing or scouring would have a greater cost benefit. Outsourcing of Operational Services MLUWD currently carry out all operational activity in-house. As they are a rapidly growing organization with some positions unfilled there is scope for MLUWD to enter into outsourcing contracts to support the efficient operation to the business. Similarly for specific and enhanced programs of activity (e.g. a crash leak detection and repair program) it may be beneficial to undertake some of the work through outsourcing to have a quick impact. Outsourcing can be used for many of the routine activities, either individually or in combination, e.g. meter reading; billing; collection; meter replacement; reduction of illegal connections; leak detection; leak repair; M&E maintenance activity; NRW reduction. All these contracts should be set up with performance in mind rewarding out performance and penalizing under performance. For performance contracts to be successful, however, the risk-reward criteria and payment mechanisms need to be clearly thought out in order to reinforce the desired performance. Such contracts should also be regarded as a partnership rather than a one-sided opportunity by either party to gain benefit at the expense of the other. The use of outsourcing contracts brings with it the requirement for effective supervision this should be viewed as an opportunity to develop staff within the water district and appropriate capacity building activity undertaken. Supplementary Appendix E shows the types of outsourcing that can be carried out and suggests some performance criteria that could be used to improve utility efficiency.

226 77 Supplementary Appendix D NRW IMPROVEMENT COSTS Costing Rationale NRW reduction activities fall into both capital investment (pipelines, meters, PRVs, specialist equipment, etc.) and operational expense categories (leak repair, equipment licensing and battery replacement). Both of these categories are further described below. 1. Capital Investment. Capital Investment costs can be broken down into investment for control and management of NRW reduction activity (production metering, district metering, specialist equipment purchase, etc.) and investment that directly leads to reduction of NRW (pipe replacement, pressure reduction, meter replacement, etc.). 2. A further type of cost presented here is for Management System Capex this is related more to effective utility management but impacts on NRW reduction performance in terms of supporting the activities carried out in NRW management, and so has been included here. 3. Operational Activity Costs. Operational activity costs have also been considered in relation to NRW Control, NRW Reduction and Management Systems. 4. NRW Control operational expense covers licensing and batteries for the Control Capex assets (leak detection equipment, data loggers etc.). 5. NRW Reduction operational expense covers leak repair. 6. NRW Management System operational expense covers licensing and batteries for the management system assets. Costs have been prepared for the period 2011 to 2016 consistent with the financial requirements of the PPTA for inclusion in the relevant section of the financial model for MLUWD. In practice, many of these types of costs will continue into the future (although at different levels) as part of a regular asset management planning process Table 3 shows a summary of all proposed investment expenditure items for MLUWD. Costs are in Philippine Peso. It is interesting to note that capital investment costs account for 96% of total costs and that almost of 85% of total cost is related to reduction of NRW, with only 10% being related to control. Table 3: Summary of Proposed NRW Investment Expenditure - MLUWD EXPENSE CATEGORY NRW CONTROL CAPEX NRW REDUCTION CAPEX MANAGEMENT SYSTEM CAPEX Total Capex TOTAL % of TOTAL 5,763,000 3,701, ,464, % 7,307,883 12,497,079 12,497,079 16,301,823 20,193,847 11,647,640 80,445, % 1,340, ,340, % 14,410,883 16,198,507 12,497,079 16,301,823 20,193,847 11,647,640 91,249, % NRW CONTROL OPEX NRW REDUCTION OPEX MANAGEMENT SYSTEM OPEX Total Opex , , % 596, , , , , ,746 3,580, % 0 34,500 34,500 34,500 34,500 34, , % 596, , , , , ,246 3,827, % TOTAL ANNUAL TOTAL CUMULATIVE 15,007,629 16,829,753 13,128,325 17,008,069 20,825,093 12,278,886 95,077,754 15,007,629 31,837,382 44,965,706 61,973,775 82,798,868 95,077,754

227 78 Supplementary Appendix D Table 4 shows the detailed breakdown of these costs by expense category. Costs are in Philippine Peso. Unit costs that have been used in the analysis are based on costs provided included in LWUA Form No. 21 where possible, and also costs kindly provided from the Engineering Department of Maynilad Water. Table 4: Detailed NRW Cost Breakdown - MLUWD EXPENSE CATEGORY TOTAL % of TOTAL NRW CONTROL CAPEX Production Metering District Metering Leak Detection/Pipe Location Equipment Data Logging Equipment 5,763,000 3,701, ,464, % 0 3,701, ,701, % 2,300, ,300, % 3,463, ,463, % NRW REDUCTION CAPEX Customer Meter Replacement Pressure Reduction (PRVs) Mains replacement Service Pipe replacement Valve Rehabilitation 7,307,883 12,497,079 12,497,079 16,301,823 20,193,847 11,647,640 80,445, , , , , , ,000 4,800, % 1,815, ,815, % 4,905,720 9,811,440 9,811,440 13,616,184 19,020,208 11,060,821 68,225, % 0 1,512,000 1,512,000 1,512, ,536, % 106, , , , , ,819 1,068, % MANAGEMENT SYSTEM CAPEX GIS Billing System Hydraulic Modelling Meter Reading Automation MIS TOTAL CAPEX NRW CONTROL OPEX Licensing & Batteries 1,340, ,340, , , % % 545, , % % % 14,410,883 16,198,507 12,497,079 16,301,823 20,193,847 11,647,640 91,249, , , , , % NRW REDUCTION OPEX Leak Repair 596, , , , , ,746 3,580, , , , , , ,746 3,580, % MANAGEMENT SYSTEM OPEX Licensing & Batteries 0 34,500 34,500 34,500 34,500 34, , ,500 34,500 34,500 34,500 34, , % TOTAL OPEX 596, , , , , ,246 3,827,974 Estimated Volume of NRW reduction due to Capital Investment Table 5 shows an estimate of volume savings as a result of activity carried out in relation to capital investment. No estimate has been prepared for the impact of pressure reduction in San Juan, due to lack of data. For the pipe replacement it has been assumed that there will be a 10% loss from the new asset, so only 90% of the potential savings are achieved for the duration of the 5-year period this is to recognise the fact that there will be some background losses built into the new asset.

228 79 Supplementary Appendix D Investment Category Table 5: Estimated Volume Savings - MLUWD Main Diameter - mm Leakage Rate - l/min/km Annual Saving Per Item - Potential Volume Saving Due to Investment Activity - m m 3 /yr/km Mains replacement - 5 breaks per km Leak volume per leak assumed the same as for pipe repair , , , ,786 48, , ,185 3, ,256 21,024 42,048 42,048 6, , , Potential Annual Savings 21,024 42,048 42,048 59,776 83,019 48,261 Loss Factor 10% 10% 10% 10% 10% 10% Forecast Annual Savings 18,922 37,843 37,843 53,799 74,717 43,435 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 9,461 18,922 18,922 26,899 37,358 21,717 due to implementation timing effect Savings from Prior Year 18,922 18,922 18,922 18,922 18, % of potential recognised in subsequent years Savings from Prior Years 37,843 37,843 37,843 37,843 Savings from Prior Years 37,843 37,843 37,843 Savings from Prior Years 53,799 74,717 74,717 Annual Saving 9,461 37,843 75, , , ,759 Cumulative Saving 9,461 47, , , , ,022 Meter Replacement - Estimated Volume Saving m 3 /mth/meter m 3 /year 24 9,600 19,200 19,200 19,200 19,200 9,600 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 4,800 9,600 9,600 9,600 9,600 4,800 due to implementation timing effect Savings from Prior Year 9,600 9,600 9,600 9,600 9, % of potential recognised in subsequent years Savings from Prior Years 19,200 19,200 19,200 19,200 Savings from Prior Years 19,200 19,200 19,200 Savings from Prior Years 19,200 19,200 19,200 Annual Saving 4,800 19,200 38,400 57,600 76,800 91,200 Cumulative Saving 4,800 24,000 62, , , ,000 Service pipe relacement - Estmated Volume Saving 1 l/hr/service m 3 /year ,008 7,008 7, Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 0 3,504 3,504 3, due to implementation timing effect Savings from Prior Year 0 7,008 7,008 7,008 7, % of potential recognised in subsequent years Savings from Prior Years 7,008 7,008 7,008 7,008 Savings from Prior Years 7,008 7,008 7,008 Savings from Prior Years 7, Annual Saving 0 3,504 17,520 24,528 28,032 21,024 Cumulative Saving 0 3,504 21,024 45,552 73,584 94,608 Volume Savings Related to Capital Investment - m 3 Total 14,261 60, , , , ,983 Cumulative 14,261 74, , , ,647 1,078,630 Cost Benefit of NRW Reduction Investment The value of savings made by reducing NRW depends upon the volume of water saved and whether it is sold or allows reduction in production output. In networks with a fully satisfied demand the value of the saving lies in the cost of production and distribution, i.e. the losses saved serve to reduce the production requirement. In networks that are resource limited the value of the saving in NRW is equal to the value of revenue less the variable cost of production and distribution, i.e. the losses saved are sold to customers at the applicable tariff rate. The MLUWD system is resource limited so the economic justification of NRW investment is related to the sales value of water saved. Table 6 shows a simple calculation of payback period for each of the components of the fiveyear capital investment program, based on the forecast of savings made as a result of the investment and operational activity. This demonstrates the potential for savings as a result of work carried out it does rely, however, on good quality of workmanship and properly targeted expenditure.

229 80 Supplementary Appendix D Capex Component Table 6: NRW Payback Period - MLUWD 5 Year Capex (PhP) 5 Year Volume Saving - m 3 5 Year Value Saving (PhP) Payback Period Years Mains replacement 68,225, ,022 17,678, Meter Replacement 4,800, ,000 7,315, Service Pipe Replacement 4,536,000 94,608 2,403, Total Capex incl. Non Reduction 95,077,754 1,078,630 27,397, Average Tariff - PhP/m Variable Production Cost - PhP/m Value of Saving - PhP/m3 25.4

230 81 Supplementary Appendix D ATTACHMENT 2: NRW IMPROVEMENT MEASURES- QMWD NRW improvement has been considered in terms of both asset and operational activity improvement. These are reported on separately below. NRW ASSET IMPROVEMENT There is scope for investment in NRW reduction by QMWD in a number of areas. The types of investment that should be considered are itemized below with a brief summary of the rationale for the investment. Flow Measurement Macro Level As reported in Supplementary Appendix C very few of the water sources (spring or deepwell) are measured on a continuous basis. A summary of flow meters required to measure source and distribution inlet flows is given in Table 1. Table 1: Summary of Required Flow Meters - QMWD LOCATION SIZE MEASURING SUPPLY TO May-it Spring 500mm 1 No. Lucena May-it Spring 300mm 1 No. Lucena May-it Spring 250mm 1 No. Lucena Pagbilao Reservoir outlet 400mm 1 No. Pagbilao Pagbilao Reservoir outlet 200mm 1 No. Pagbilao Pagbilao reservoir outlet 200mm 1 No. Small service area adjacent to Pagbilao Ibia Spring; Dapdap Spring 200mm 1 No. Tayabas Lalo Ground Reservoir Lalo Pequeno 200mm 1 No. Tayabas Lalo Grande 150mm 1 No. Tayabas Tongko SR outlet 600mm 1 No. Lucena Tongko SR bypass 200mm 1 No. Lucena Deep wells 10 no. 250mm 10 No. Lucena network Lucena SR outlet 500mm 1 No. Lucena network District Metering In order to target operational resources and investment, the division of water networks into discrete areas into which flows are continuously measured is commonly undertaken (district metering). This is particularly useful when NRW levels are relatively low, either to make further reductions or to sustain the achieved levels of NRW into the future. The size of district meter area depends on a number of factors, including network layout and connectivity; investment and operating cost of installed infrastructure; resources available to manage and monitor; etc. As a first step for costing purposes it is proposed that areas of between 3,000 and 5,000

231 82 Supplementary Appendix D connections are set up. The meter installation should be provided with a bypass in order that meter maintenance can be easily undertaken the bypass should be sized as one diameter lower than the main line. Estimated requirements are given below: Lucena. Lucena network could be split into four sections relatively easily allowing better understanding of the distribution of lows within the network. The metering requirements for this would be as follows: Lucena East: 1 no. 450mm; 1 no. 150mm; 1 no. 250mm; Lucena West: 1 no. 250mm; 1 no. 400mm; Lucena South: 2 no. 200mm; Lucena Centre: This would be derived from bulk supply meters at Tongko SR (service reservoir) and a combination of the meters for Lucena East, West and South as well as provision for 7 additional valves for isolation of distribution areas. Pagbilao. Limited detail of the Pagbilao network was provided. The production metering proposed in the section above is considered sufficient for monitoring of flows at this time. Tayabas. The construction drawings of the Tayabas network indicated that the centre of the network is laid out on a grid system with two spurs leading off. There would be scope to create two district areas to more closely understand water use in Tayabas. Costing provision for 4 additional 200mm meters with chambers and 4 additional 200mm valves should provide sufficient resource to enable district metering to be undertaken. No indication of network pressures was given but there may be scope for pressure control. Pressure Control Pressures within the different networks operated by QMWD differ: Lucena. Pressures in the Lucena network are low to medium; however, this is principally as a result of the lack of adequate supply to Lucena from May-it spring. It may be that pressure control would be beneficial once full resource availability is achieved. Costing provision for 3 no. 250mm PRVs with chambers 3 additional 200mm valves should provide sufficient resource to enable pressure reduction to be undertaken. Pagbilao. Pressures in some parts of the Pagbilao network are very high, leading to a high frequency of burst pipes as reported by the manager responsible for the area; this would indicate that there is scope for pressure reduction in Pagbilao. Costing provision for 2 no. 250mm PRVs with chambers 2 additional 200mm valves should provide sufficient resource to enable pressure reduction to be undertaken. Tayabas. Pressures in the Tayabas network were reported as low to medium further investigation is required to determine if pressure reduction would be beneficial in this network. In the absence of additional information, costing provision for 3 no. 250mm PRVs with chambers 3 additional 200mm valves should provide sufficient resource to enable pressure reduction to be undertaken. Mains Replacement A key component in the reduction of NRW is the replacement of leaking mains. In the absence of detailed condition information an estimate of the required investment in mains replacement can be made from knowledge of the existing network materials and general characteristics of these mains.

232 83 Supplementary Appendix D A significant amount of mains have been replaced within the distribution networks. It is reported that around 41km of the original CI mains remain to be replaced, of which around 31km are more than 50 years old. Following discussions with the board of QMWD it is suggested to replace 16.5km of CI mains (all 100mm and 12km of 200 mm) over a 5-year period of the loan project, and this has been included for in the costing below. Investment, when made, should be made based on a detailed analysis of the physical condition of each main to be replaced. Customer Meter Replacement The age of meters in use in QMWD is wide ranging. At present the company doesn t have a policy or programme for proactive customer meter replacement although they are purchasing around 1,200 meters per year. QMWD does have meter testing facility where it tests meters that have been reported as not reading properly. Customer meter management usually has two components: planned meter replacement, and ad-hoc meter replacement. Planned meter replacement policy tends typically to be based on a fixed period for replacement usually between 5 and 10 years depending on the particular company, requiring meter change out irrespective of actual performance. Ad-hoc meter replacement is carried out based on meter condition as reported by meter readers, customers etc., and analysis of historic meter readings as part of the billing process. No information on customer profile was available from QMWD. This will be necessary to allow the design an effective customer meter replacement program. In the absence of the meter profile data it is suggested that 50% of the meter stock is replaced over the five year period of the loan project i.e. 3,500 meters per year. As mentioned previously, QMWD are purchasing 1,200 meters per year under existing funds so a total replacement of 2,300 meters per year is provided from under the NRW reduction capex. Replacement of GI Service Connections The need for a blanket service connection change out program depends on the condition of service pipe materials and historic installation practice. Service mains are currently being replaced by QMWD on a as-needs basis. No information on the number and condition of GI service mains was available. In the absence of the GI service pipe data, costing provision for replacement of 2,000 services per year until the GI services are completely removed from the system has been made. It is estimated that there are around 7,500 GI service pipes still in place, so provision has been included for replacement of these over a five-year period of the loan project.

233 84 Supplementary Appendix D Valve Rehabilitation Program Valves are an essential component of a pipe network, allowing isolation of small parts of the network so that operational situations like burst mains or interconnections can be managed without affecting large numbers of customers. The networks in QMWD appear to have a good proportion of valves. There are a number of key controlling valves which are in the process of replacement. One problem with valve maintenance is the asphalting or concreting over of control valves it is suggested that a program of valve rehabilitation be included in the investment plan for QMWD. Also that it make representations with the City/Municipal Governments to include the QMWD in planning their road rehabilitation works. This should include for replacement of valves as well as for extension of valve chambers to make valves accessible again. There were no data in relation to valves, and valve condition within the networks. For costing purposes a provision has been made for a 5-year investment period based on the installation of 1 valve per every 1,000 connections, The requirement therefore is: Lucena 23 no.; Pagbilao 6 no.; Tayabas 5 no. An average cost equivalent to the cost of a 150mm valve has been used; however, the provision can be used for valves of any size. Operational Systems and Equipment There are a number of tools and types of equipment that are necessary to enable the efficient operation of a water utility. These include: GIS Mapping Systems; Billing systems; Hydraulic model of the transmission and distribution systems; Meter reading recording devices and/or on the spot billing technology; Leakage detection equipment; Portable flow and pressure logging technology. GIS and Mapping. Geographical information systems technology is now well tried and tested for utility operation and provides a very useful platform for recording details of physical assets location, type, age, condition; as well as for recording customer consumption, billing and payment information. QMWD has very rudimentary map records, based on as-built construction drawings from pipeline projects over the years. There would be very large benefits of creating a GIS for the QMWD. Billing System. QMWD billing system should be reviewed at the WDDSP feasibility stage to see whether it is sufficiently robust for the task and/or whether it can be further customized to the benefit of QMWD. If the system is not sufficiently robust alternative options should be considered at the feasibility stage. Hydraulic Modelling. Construction of hydraulic models to water supply systems provides many benefits to the water utility. This may be in terms of improved knowledge of network asset types and condition; better understanding of water usage across the network; use of the model to simulate changes and improvements to the network; design of district meter and pressure reduction areas; support to strategic resource planning; etc. The hydraulic model should be built with the support of consultants but ownership and use should rest with QMWD. Meter Reading Automation. The automation of meter reading through the use of hand held

234 85 Supplementary Appendix D computer technology up- and down-loaded to a computerized billing system both simplifies and speeds up the meter reading process and potential for recording and downloading errors; it also reduces the likelihood of meter fraud by restricting the information visible to the meter reader. An extension of this technology will also allow bills to be issued on the spot to customers, simplifying and speeding up the billing process. Leakage Detection. Provision of appropriate and adequate leakage detection and training in its use is essential if physical losses are to be managed to minimal levels. Proposed equipment listing for QMWD would be: Leak Noise Correlators 2 units; Electronic listening equipment 5 units (3 for Lucena; 1 for Pagbilao; 1 for Tayabas;) Pipe locating equipment (all materials) 2 sets to be shared between the areas. Noise loggers 3 sets: one for each area. Flow and Pressure Monitoring Equipment. Sufficient flow and pressure data logging equipment should be provided to allow field testing of the largest district area over an extended time period. Dual flow & pressure loggers 20 no. Single channel pressure loggers 30 no. Heavy duty laptop computers 3 no. Provision should also be made for maintenance and replacement of this equipment and associated batteries, cables etc. Summary of Capital Investment Requirements Table 2 is a summary of the assets included in the capital investment requirements.

235 86 Supplementary Appendix D Table 2: NRW Capital Investment Requirements - QMWD EXPENDITURE TYPE Quantities NRW MANAGEMENT/CONTROL COSTS Production Metering Electro Magnetic Mechanical District Metering Electro Magnetic Meters Mechanical Meters Meter Installation valves Chamber construction - 2m x 1.5m x 2m 11 Network Isolation valves Leak Detection/Pipe Location Equipment Leak Noise Correlator 2 Electronic Listening Sticks 5 Noise Loggers - set 3 Pipe Location Equipment - All materials 2 Data Logging Equipment Dual Flow & Pressure Loggers 20 Pressure loggers 30 Hardware purchase - computer 3 NRW REDUCTION CAPEX Customer Meter Replacement 1/2" 1,150 2,300 2,300 2,300 2,300 1,150 Pressure Reduction (PRVs) Chamber construction - 2m x 1.5m x 2m 8 Isolation valves Mains replacement PVC 200 1,500 3,000 3,000 3,000 1, ,250 2,250 Service Pipe replacement 1/2" 750 1,500 1,500 1,500 1, Valve Rehabilitation MANAGEMENT SYSTEMS COST GIS Software Purchase & Implementation 1 Hardware Purchase - Computers 1 Hydraulic Modelling Software - Epanet Freeware 1 Hardware Purchase - Computers 1 Model Building 1

236 87 Supplementary Appendix D NRW OPERATIONAL ACTIVITY IMPROVEMENT Leak Detection and Repair QMWD are not proactively carrying out leak detection and repair activity. These are key activities in the reduction and control of NRW. Further, the analysis of ILI (Infrastructure Leakage Index) (included in Supplementary Appendix C, para 114) demonstrates the need for significant improvement in the management of physical losses from the network. It is suggested that QMWD set up a team to more proactively manage leak detection and repair this could be either in-house or could be contracted out either on a rate basis or a performance basis or combination of both with supervision responsibility remaining with QMWD. The current level of leaks within the system is unknown; however, an attempt at estimating the number of leaks has been made, the result of which are shown in Table 3. No attempt has been made to attribute savings to the leaks repaired. QMWD should ensure that adequate budget for leak repair is provided in their expense forecast. Table 3: Estimated Distribution Main Line Leaks and Costs - QMWD Diameter (mm) Leaks/yr/ km Network Length (m) No. of Repairs Leak Repair Cost (PhP) , , , , , , , , , , , , , ,453 TOTAL 488 1,314,811 Illegal Loss Reduction The conversion of illegal connections to legal connections is a double win for any utility, with a reduction in the NRW as well as a revenue gain for no additional production or distribution effort. It is suggested that QMWD set up a team to focus on the identification and subsequent conversion of illegal connections to legal paying customers. This is not an easy task and is something that requires good network knowledge, incentives and penalties, effective communication and hard work in the field visiting all areas of the network. This is an area of activity that could be outsourced on a performance basis.

237 88 Supplementary Appendix D Water Audit It is recommended that QMWD adopt the IWA water audit methodology as described in Supplementary Appendic C, para 108, Section 4.2, as a performance measurement tool. A key part of this is the recording of unbilled authorised consumption within the water district this is not currently being done by QMWD and using this information to inform operational decisions. Quantifying the amount of water used for operational activities allows comparison to be made with the cost of mitigating the need for the operational use, e.g. if water used for flushing was quantified and a value assigned to it, it would be possible to calculate when remedial action such as swabbing or scouring would have a greater cost benefit. Outsourcing of Operational Services QMWD currently carry out all operational activity in-house. As they are a rapidly growing organization with some positions unfilled there is scope for QMWD to enter into out-sourcing contracts to support the efficient operation to the business. Similarly for specific and enhanced programs of activity (e.g. a crash leak detection and repair program) it may be beneficial to undertake some of the work through outsourcing to have a quick impact. Outsourcing can be used for many of the routine activities, either individually or in combination, e.g. meter reading; billing; collection; meter replacement; reduction of illegal connections; leak detection; leak repair; M&E maintenance activity; NRW reduction. All these contracts should be set up with performance in mind rewarding out performance and penalizing under performance. For performance contracts to be successful, however, the risk-reward criteria and payment mechanisms need to be clearly thought out in order to reinforce the desired performance. Such contracts should also be regarded as a partnership rather than a one-sided opportunity by either party to gain benefit at the expense of the other. The use of outsourcing contracts brings with it the requirement for effective supervision this should be viewed as an opportunity to develop staff within the water district and appropriate capacity building activity undertaken. Supplementary Appendix E shows the types of outsourcing that can be carried out and suggests some performance criteria that could be used to improve utility efficiency. NRW IMPROVEMENT COSTS Costing Rationale NRW reduction activities fall into both capital investment (pipelines, meters, PRVs, specialist equipment, etc.) and operational expense categories (leak repair, equipment licensing and

238 89 Supplementary Appendix D battery replacement). Both of these categories are further described below. 7. Capital Investment. Capital Investment costs can be broken down into investment for control and management of NRW reduction activity (production metering, district metering, specialist equipment purchase, etc.) and investment that directly leads to reduction of NRW (pipe replacement, pressure reduction, meter replacement, etc.). 8. A further type of cost presented here is for Management System Capex this is related more to effective utility management but impacts on NRW reduction performance in terms of supporting the activities carried out in NRW management, and so has been included here. 9. Operational Activity Costs. Operational activity costs have also been considered in relation to NRW Control, NRW Reduction and Management Systems. 10. NRW Control operational expense covers licensing and batteries for the Control Capex assets (leak detection equipment, data loggers etc.). 11. NRW Reduction operational expense covers leak repair. 12. NRW Management System operational expense covers licensing and batteries for the management system assets. Costs have been prepared for the period 2011 to 2016 consistent with the financial requirements of the PPTA for inclusion in the relevant section of the financial model for QMWD. In practice, many of these types of costs will continue into the future (although at different levels) as part of a regular asset management planning process Table 4 shows a summary of all proposed investment expenditure items for QMWD. Costs are in Philippine Peso. It is interesting to note that capital investment costs account for 92% of total costs and that 71% of total cost is related to reduction of NRW, with only 19% being related to control. Table 5 shows the detailed breakdown of these costs by expense category. Costs are in Philippine Peso. Unit costs that have been used in the analysis are based on costs provided included in LWUA Form No. 21 where possible, and also costs kindly provided from the Engineering Department of Maynilad Water. Table 4: Summary of Proposed NRW Investment Expenditure - QMWD EXPENSE CATEGORY NRW CONTROL CAPEX NRW REDUCTION CAPEX MANAGEMENT SYSTEM CAPEX Total Capex TOTAL % of TOTAL 13,700,119 5,986, ,687, % 6,010,950 20,179,408 13,730,685 13,730,685 13,730,685 6,865,343 74,247, % 1,340, ,340, % 21,051,069 26,166,311 13,730,685 13,730,685 13,730,685 6,865,343 95,274, % NRW CONTROL OPEX NRW REDUCTION OPEX MANAGEMENT SYSTEM OPEX Total Opex , , % 1,314,811 1,314,811 1,314,811 1,314,811 1,314,811 1,314,811 7,888, % 0 39,000 39,000 39,000 39,000 39, , % 1,314,811 1,353,811 1,353,811 1,428,811 1,353,811 1,353,811 8,158, % TOTAL ANNUAL TOTAL CUMULATIVE 22,365,880 27,520,122 15,084,497 15,159,497 15,084,497 8,219, ,433,646 22,365,880 49,886,002 64,970,499 80,129,995 95,214, ,433,646

239 90 Supplementary Appendix D Table 5: Detailed NRW Cost Breakdown - QMWD EXPENSE CATEGORY TOTAL % of TOTAL NRW CONTROL CAPEX Production Metering District Metering Leak Detection/Pipe Location Equipment Data Logging Equipment 13,700,119 5,986, ,687,021 7,747, ,747, % 0 5,986, ,986, % 2,400, ,400, % 3,553, ,553, % NRW REDUCTION CAPEX Customer Meter Replacement Pressure Reduction (PRVs) Mains replacement Service Pipe replacement Valve Rehabilitation 6,010,950 20,179,408 13,730,685 13,730,685 13,730,685 6,865,343 74,247,756 1,380,000 2,760,000 2,760,000 2,760,000 2,760,000 1,380,000 13,800, % 0 7,303, ,303, % 2,759,468 6,373,328 7,227,720 7,227,720 7,227,720 3,613,860 34,429, % 1,417,500 2,835,000 2,835,000 2,835,000 2,835,000 1,417,500 14,175, % 453, , , , , ,983 4,539, % MANAGEMENT SYSTEM CAPEX GIS Billing System Hydraulic Modelling Meter Reading Automation MIS TOTAL CAPEX NRW CONTROL OPEX Licensing & Batteries 1,340, ,340, , , % % 545, , % % % 21,051,069 26,166,311 13,730,685 13,730,685 13,730,685 6,865,343 95,274, , , , , % NRW REDUCTION OPEX Leak Repair 1,314,811 1,314,811 1,314,811 1,314,811 1,314,811 1,314,811 7,888,868 1,314,811 1,314,811 1,314,811 1,314,811 1,314,811 1,314,811 7,888, % MANAGEMENT SYSTEM OPEX Licensing & Batteries 0 39,000 39,000 39,000 39,000 39, , ,000 39,000 39,000 39,000 39, , % TOTAL OPEX 1,314,811 1,353,811 1,353,811 1,428,811 1,353,811 1,353,811 8,158,868 Estimated Volume of NRW reduction due to Capital Investment Table 6 shows an estimate of volume savings as a result of activity carried out in relation to capital investment. For the pipe replacement it has been assumed that there will be a 10% loss from the new asset, so only 90% of the potential savings are achieved for the duration of the 5-year period this is to recognise the fact that there will be some background losses built into the new asset.

240 91 Supplementary Appendix D Investment Category Table 6: Estimated Volume Savings - QMWD Main Diameter - mm Leakage Rate - l/min/km Annual Saving Per Item - m 3 /yr Potential Volume Saving Due to Investment Activity - m Mains replacement - 5 breaks per km , , Leak volume per leak assumed the same , as for pipe repair , , , , , ,768 31,536 31,536 31,536 15, , ,256 11,826 11, , , Potential Annual Savings 11,826 27,594 31,536 31,536 31,536 15,768 Loss Factor 10% 10% 10% 10% 10% 10% Forecast Annual Savings 10,643 24,835 28,382 28,382 28,382 14,191 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 5,322 12,417 14,191 14,191 14,191 7,096 due to implementation timing effect Savings from Prior Year 10,643 10,643 10,643 10,643 10, % of potential recognised in subsequent years Savings from Prior Years 24,835 24,835 24,835 24,835 Savings from Prior Years 28,382 28,382 28,382 Savings from Prior Years 28,382 28,382 28,382 Annual Saving 5,322 23,061 49,669 78, , ,721 Cumulative Saving 5,322 28,382 78, , , ,258 Meter Replacement - Estimated Volume Saving m 3 /mth/meter m 3 /year: 24 27,600 55,200 55,200 55,200 55,200 27,600 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 13,800 27,600 27,600 27,600 27,600 13,800 due to implementation timing effect Savings from Prior Year 27,600 27,600 27,600 27,600 27, % of potential recognised in subsequent years Savings from Prior Years 55,200 55,200 55,200 55,200 Savings from Prior Years 55,200 55,200 55,200 Savings from Prior Years 55,200 55,200 55,200 Annual Saving 13,800 55, , , , ,200 Cumulative Saving 13,800 69, , , , ,000 Service pipe relacement - Estmated Volume Saving 1 l/hr/service m 3 /year: 8.8 6,570 13,140 13,140 13,140 13,140 6,570 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 3,285 6,570 6,570 6,570 6,570 3,285 due to implementation timing effect Savings from Prior Year 6,570 13,140 13,140 13,140 13, % of potential recognised in subsequent years Savings from Prior Years 13,140 13,140 13,140 13,140 Savings from Prior Years 13,140 13,140 13,140 Savings from Prior Years 13,140 13,140 13,140 Annual Saving 3,285 13,140 32,850 45,990 59,130 68,985 Cumulative Saving 3,285 16,425 49,275 95, , ,380 Volume Savings Related to Capital Investment - m 3 Total 22,407 91, , , , ,906 Cumulative 22, , , , ,732 1,441,638 Cost Benefit of NRW Reduction Investment The value of savings made by reducing NRW depends upon the volume of water saved and whether it is sold or allows reduction in production output. In networks with a fully satisfied demand the value of the saving lies in the cost of production and distribution, i.e. the losses saved serve to reduce the production requirement. In networks that are resource limited the value of the saving in NRW is equal to the value of revenue less the variable cost of production and distribution, i.e. the losses saved are sold to customers at the applicable tariff rate. The QMWD system is resource limited so the economic justification of NRW investment is related to the sales value of water saved. Table 7shows a simple calculation of payback period for each of the components of the fiveyear capital investment program, based on the forecast of savings made as a result of the investment and operational activity.

241 92 Supplementary Appendix D Capex Component Table 7: NRW Payback Period - QMWD 5 Year Capex (PhP) 5 Year Volume Saving - m 3 5 Year Value Saving (PhP) Payback Period Years Mains replacement 34,429, ,258 5,346, Meter Replacement 13,800, ,000 11,343, Service Pipe Replacement 14,175, ,380 3,060, TOTAL 95,274,778 1,441,638 19,750, Average Tariff - PhP/m Variable Production Cost - PhP/m Value of Saving - PhP/m Whilst overall the expenditure on capital investment has a payback time well within the asset lifetime, the benefit of the expenditure on meter replacement means that at current tariff levels the meter replacement cycle should be 7 years or more to make economic sense. This demonstrates the potential for savings as a result of work carried out it does rely, however, on good quality of workmanship and properly targeted expenditure.

242 93 Supplementary Appendix D ATTACHMENT 3: NRW IMPROVEMENT MEASURES- LMWD NRW improvement has been considered in terms of both asset and operational activity improvement. These are reported on separately below. NRW ASSET IMPROVEMENT There is scope for investment in NRW reduction by LMWD in a number of areas. The types of investment that should be considered are itemized below with a brief summary of the rationale for the investment. Flow Measurement Macro Level The principal water sources (Tingib and Dagami WTPs) are measured on a continuous basis. However, at Tingib the flow measurement is a combined measurement of both WTP outputs. There is no metering of the distribution system or off-takes from the transmission mains along their routes to Tacloban. It is recommended that the outlet flow from both Tingib WTPs is measured independently and that the transmission mains flows are measured adjacent to municipal centres to allow a clear understanding of the integrity of the different sections of the transmission mains. A summary of proposed transmission main meters is shown in Table 1. Table 1: Summary of Proposed Transmission Main Meters LMWD LOCATION SIZE MEASURING SUPPLY TO Tingib SSF WTP Outlet 300mm 1 No. Pastrana Dagami-Tanauan at Tanauan 250mm 1 No. Tanauan Tanauan-Tolosa at Tanauan 300mm 1 No. Tolosa Tanauan-Palo at Tanauan 300mm 1 No. Palo Dagami-Palo at Palo 250mm 1 No. Palo Pastrana-Palo at Palo 600mm 1 No. Palo Palo-Tacloban at Palo 500mm 1 No. Tacloban Palo-Tacloban at Palo 250mm 1 No. Tacloban District Metering In order to target operational resources and investment, the division of water networks into discrete areas into which flows are continuously measured is commonly undertaken (district metering). This is particularly useful when NRW levels are relatively low, either to make further reductions or to sustain the achieved levels of NRW into the future. The size of district meter area depends on a number of factors, including network layout and connectivity; investment and operating cost of installed infrastructure; resources available to manage and monitor; etc. As a first step for costing purposes it is proposed that areas of between 3,000 and 5,000 connections are set up. The meter installation should be provided with a bypass in order that meter maintenance can be easily undertaken. In the LMWD system the smaller municipalities can be treated as individual DMA areas.

243 94 Supplementary Appendix D Measurement of flows off the transmission network into distribution is also proposed to enable better understanding of water use in each municipality. A summary of proposed distribution metering is given in Table 2. Each meter should be located in a chamber and provided with a bypass. Thus, for each meter installation there will be a requirement for three valves of the same diameter. In addition, provision for extra valves for zone isolation should be provided for the DMAs in Tacloban City equivalent to 2 no. 15mm valves per zone 10 valves. Thus, total valve requirement will be: 100mm 3 no. 150mm 21 no. 200mm 25 no. 300mm 3 no. In addition, 14 meter chambers will be required. DMA design for complex networks should be carried out using a calibrated hydraulic network model. Table 2: Summary of Proposed District Metering LMWD LOCATION SIZE MEASURING SUPPLY TO Dagami-TabonTabon at Dagami 150mm 1 No. TabonTabon Dagami Town offtake 150mm 1 No. Dagami town Pastrana Town offtake 150mm 1 No. Pastrana Pastrana-Santa Fe 100mm 1 No. Santa Fe Palo Town offtake 150mm - 4 No. Palo Tacloban City DMA s* 200mm 10 No. Within Tacloban UTAP Reservoir Outlet 300mm 1 No. Tacloban City Tacloban High Level Booster 150mm 1 No. High level area in NW Tacloban *For investment planning purposes suggest to create 5MA s within Tacloban City of approximately 4,000 connections each utilizing two 200mm inlet meters for each. Pressure Control There will be scope for pressure reduction within some or all of the municipalities fed directly off the transmission mains: Dagami; TabonTabon; Pastrana; Palo; Tanauan. Costing provision for PRVs (with bypass) is shown in Table 3. Total valve requirement will be: 150mm 24 no. Table 3: Pressure Valve Reduction Requirement LMWD LOCATION SIZE REDUCING PRESSURE IN TabonTabon offtake at Dagami 150mm 1 No. TabonTabon Dagami Town offtake 150mm 1 No. Dagami town Pastrana Town offtake 150mm 1 No. Pastrana Palo Town offtake 150mm - 4 No. Palo Tanauan Town 150mm 1 No. Tanauan

244 95 Supplementary Appendix D In addition, 8 PRV chambers will be required. PRV design should be undertaken using a calibrated hydraulic model of the network. Mains Replacement A key component in the reduction of NRW is the replacement of leaking mains. LMWD have detailed information about the extent and condition of the network and are carrying out mains replacement work in with which it is anticipated that they will replace all the remaining CI and PB mains in the distribution network (19 km; and 5.6 km respectively). The targeted replacement of poor quality ACP transmission mains was also identified as a requirement, and so an investment provision has been made for replacement of ACP transmission at the rate of 2 km/year. Identification of priority mains for replacement will be carried out during the detailed feasibility study. Investment, when made, should be made based on a detailed analysis of the physical condition of each main to be replaced. Customer Meter Replacement It is proposed that LMWD introduce a planned meter replacement program. Planned meter replacement policy tends typically to be based on a fixed period for replacement usually between 5 and 10 years depending on the particular company, requiring meter change out irrespective of actual performance. In the absence of the meter profile data, costing provision for replacement of meters on an 8- year replacement cycle has been included, i.e. 12.5% per year. This should, however, be based on a proper assessment of meter condition rather than a blanket replacement. This should provide sufficient resources to enable effective customer meter replacement to be undertaken. Replacement of PB Service Connections The need for a blanket service connection change out program depends on the condition of service pipe materials and historic installation practice. Service mains are currently being replaced by LMWD on an as-needs basis. It was estimated that the majority of service connections are now PE but that a significant portion of PB services remain for investment planning, it has been assumed that 25% of services (7,000) are PB and these will be changed out during the investment plan period. Valve Rehabilitation Program Valves are an essential component of a pipe network, allowing isolation of small parts of the network so that operational situations like burst mains or interconnections can be managed without affecting large numbers of customers. The networks in LMWD appear to have a good proportion of valves. There are a number of key controlling valves which are in the process of replacement. One problem with valve maintenance is the asphalting or concreting over of control valves it is suggested that a program of valve rehabilitation be included in the investment plan for LMWD. Also that it make representations with the City/Municipal Governments to include the LMWD in planning

245 96 Supplementary Appendix D their road rehabilitation works. This should include for replacement of valves as well as for extension of valve chambers to make valves accessible again. There were no data in relation to valves, and valve condition within the networks. For costing purposes a provision has been made for a 5-year investment period based on the installation of 1 valve per every 1,000 connections, of 1 no. 150mm valve per every 1,000 connections should be made for the first 5 years i.e. 28 valves per year. An average cost equivalent to the cost of a 150mm valve has been used; however, the provision can be used for valves of any size. Operational Systems and Equipment There are a number of tools and types of equipment that are necessary to enable the efficient operation of a water utility. These include: GIS Mapping Systems; Billing systems; Hydraulic model of the transmission and distribution systems; Meter reading recording devices and/or on the spot billing technology; Leakage detection equipment; Portable flow and pressure logging technology. GIS and Mapping. Geographical information systems technology is now well tried and tested for utility operation and provides a very useful platform for recording details of physical assets location, type, age, condition; as well as for recording customer consumption, billing and payment information. LMWD has very rudimentary map records, based on as-built construction drawings from pipeline projects over the years. There would be very large benefits of creating a GIS for the LMWD. Billing System. LMWD billing system should be reviewed at the WDDSP feasibility stage to see whether it is sufficiently robust for the task and/or whether it can be further customized to the benefit of LMWD. If the system is not sufficiently robust alternative options should be considered at the feasibility stage. Hydraulic Modelling. Construction of hydraulic models to water supply systems provides many benefits to the water utility. This may be in terms of improved knowledge of network asset types and condition; better understanding of water usage across the network; use of the model to simulate changes and improvements to the network; design of district meter and pressure reduction areas; support to strategic resource planning; etc. The hydraulic model should be built with the support of consultants but ownership and use should rest with LMWD. Leakage Detection. Provision of appropriate and adequate leakage detection and training in its use is essential if physical losses are to be managed to minimal levels. Proposed equipment listing for LMWD would be: Leak Noise Correlators 2 units; Electronic listening equipment 5 units Pipe locating equipment (all materials) 2 sets. Noise loggers 3 sets. Flow and Pressure Monitoring Equipment. Sufficient flow and pressure data logging equipment should be provided to allow field testing of the largest district area over an

246 97 Supplementary Appendix D extended time period. Dual flow & pressure loggers 20 no. Single channel pressure loggers 30 no. Heavy duty laptop computers 3 no. Provision should also be made for maintenance and replacement of this equipment and associated batteries, cables etc. Summary of Capital Investment Requirements Table 4 is a summary of the assets included in the capital investment requirements. NRW OPERATIONAL ACTIVITY IMPROVEMENT Leak Detection and Repair LMWD are not proactively carrying out leak detection and repair activity. These are key activities in the reduction and control of NRW. Further, the analysis of ILI (Infrastructure Leakage Index) (included in Supplementary Appendix C, para 114) demonstrates the need for significant improvement in the management of physical losses from the network. It is suggested that LMWD set up a team to more proactively manage leak detection and repair this could be either in-house or could be contracted out either on a rate basis or a performance basis or combination of both with supervision responsibility remaining with LMWD. The current level of leaks within the system is unknown; however, an attempt at estimating the number of leaks has been made the result of which are shown in Table 5. No attempt has been made to attribute savings to the leaks repaired. LMWD should ensure that adequate budget for leak repair is provided in their expense forecast.

247 98 Supplementary Appendix D Table 4: NRW Capital Investment Requirements - LMWD NRW MANAGEMENT/CONTROL COSTS Production Metering Electro Magnetic Mechanical District Metering Electro Magnetic Meters Mechanical Meters Investment Expenditure Meter Installation valves Quantities Chamber construction - 2m x 1.5m x 2m 14 Network Isolation valves Leak Detection/Pipe Location Equipment Leak Noise Correlator 2 Electronic Listening Sticks 5 Noise Loggers - set 3 Pipe Location Equipment - All materials 2 Data Logging Equipment Dual Flow & Pressure Loggers 20 Pressure loggers 30 Hardware purchase - computer 3 NRW REDUCTION CAPEX Customer Meter Replacement Pressure Reduction (PRVs) 1/2" Chamber construction - 2m x 1.5m x 2m 8 Isolation valves Mains replacement PVC Service Pipe replacement Valve Rehabilitation /2" MANAGEMENT SYSTEMS COST GIS Software Purchase 1 Hardware Purchase - Computers 1 Hydraulic Modelling Software - Epanet Freeware 1 Hardware Purchase - Computers 1 Model Building 1

248 99 Supplementary Appendix D Table 5: Estimated Distribution Main Line Leaks and Costs - LMWD Diameter (mm) Leaks/yr/ km Network Length (m) No. of repairs Leak Repair Cost (PhP) , , , , , , , , , , , , , ,776 TOTAL LEAKS PER YEAR ,554 Illegal Loss Reduction The conversion of illegal connections to legal connections is a double win for any utility, with a reduction in the NRW as well as a revenue gain for no additional production or distribution effort. It is suggested that LMWD set up a team to focus on the identification and subsequent conversion of illegal connections to legal paying customers. This is not an easy task and is something that requires good network knowledge, incentives and penalties, effective communication and hard work in the field visiting all areas of the network. This is an area of activity that could be outsourced on a performance basis. Water Audit It is recommended that LMWD adopt the IWA water audit methodology as described in Supplementary Appendic C, para 108, Section 4.2, as a performance measurement tool. A key part of this is the recording of unbilled authorised consumption within the water district this is not currently being done by LMWD and using this information to inform operational decisions. Quantifying the amount of water used for operational activities allows comparison to be made with the cost of mitigating the need for the operational use, e.g. if water used for flushing was quantified and a value assigned to it, it would be possible to calculate when remedial action such as swabbing or scouring would have a greater cost benefit. Outsourcing of Operational Services LMWD currently carry out all operational activity in-house. As they are a rapidly growing organization with some positions unfilled there is scope for LMWD to enter into out-sourcing contracts to support the efficient operation to the business. Similarly for specific and enhanced programs of activity (e.g. a crash leak detection and repair program) it may be beneficial to undertake some of the work through outsourcing to have a quick impact. Outsourcing can be used for many of the routine activities, either individually or in combination, e.g. meter reading; billing;

249 100 Supplementary Appendix D collection; meter replacement; reduction of illegal connections; leak detection; leak repair; M&E maintenance activity; NRW reduction. All these contracts should be set up with performance in mind rewarding out performance and penalizing under performance. For performance contracts to be successful, however, the risk-reward criteria and payment mechanisms need to be clearly thought out in order to reinforce the desired performance. Such contracts should also be regarded as a partnership rather than a one-sided opportunity by either party to gain benefit at the expense of the other. The use of outsourcing contracts brings with it the requirement for effective supervision this should be viewed as an opportunity to develop staff within the water district and appropriate capacity building activity undertaken. Supplementary Appendix E shows the types of outsourcing that can be carried out and suggests some performance criteria that could be used to improve utility efficiency. NRW IMPROVEMENT COSTS Costing Rationale NRW reduction activities fall into both capital investment (pipelines, meters, PRVs, specialist equipment, etc.) and operational expense categories (leak repair, equipment licensing and battery replacement). Both of these categories are further described below. 13. Capital Investment. Capital Investment costs can be broken down into investment for control and management of NRW reduction activity (production metering, district metering, specialist equipment purchase, etc.) and investment that directly leads to reduction of NRW (pipe replacement, pressure reduction, meter replacement, etc.). 14. A further type of cost presented here is for Management System Capex this is related more to effective utility management but impacts on NRW reduction performance in terms of supporting the activities carried out in NRW management, and so has been included here. 15. Operational Activity Costs. Operational activity costs have also been considered in relation to NRW Control, NRW Reduction and Management Systems. 16. NRW Control operational expense covers licensing and batteries for the Control Capex assets (leak detection equipment, data loggers etc.). 17. NRW Reduction operational expense covers leak repair. 18. NRW Management System operational expense covers licensing and batteries for the management system assets. Costs have been prepared for the period 2011 to 2016 consistent with the financial requirements of the PPTA for inclusion in the relevant section of the financial model for LMWD. In practice, many of these types of costs will continue into the future (although at different levels) as part of a regular asset management planning process

250 101 Supplementary Appendix D Table 6 shows a summary of all proposed investment expenditure items for QMWD. Costs are in Philippine Peso. Table 6: Summary of Proposed NRW Investment Expenditure - LMWD EXPENSE CATEGORY NRW CONTROL CAPEX NRW REDUCTION CAPEX MANAGEMENT SYSTEM CAPEX Total Capex TOTAL % of TOTAL 10,103, ,668, ,771, % 14,131,835 18,581,836 18,581,836 18,581,836 18,581,836 9,290,918 97,750, % 1,340, ,340, % 25,575,165 18,581,836 24,250,037 18,581,836 18,581,836 9,290, ,861, % NRW CONTROL OPEX NRW REDUCTION OPEX MANAGEMENT SYSTEM OPEX Total Opex , , % 921, , , , , ,554 5,529, % 0 39,000 39,000 39,000 39,000 39, , % 921, , ,554 1,085, , ,554 5,849, % TOTAL ANNUAL TOTAL CUMULATIVE 26,496,719 19,542,390 25,210,590 19,667,390 19,542,390 10,251, ,710,950 26,496,719 46,039,108 71,249,699 90,917, ,459, ,710,950 It is interesting to note that capital investment costs account for 95% of total costs and that 81% of total cost is related to reduction of NRW, with only 13% being related to control. Table 7 shows the detailed breakdown of these costs by expense category. Costs are in Philippine Peso. Unit costs that have been used in the analysis are based on costs provided included in LWUA Form No. 21 where possible, and also costs kindly provided from the Engineering Department of Maynilad Water.

251 102 Supplementary Appendix D Table 7: Detailed NRW Cost Breakdown - LMWD EXPENSE CATEGORY TOTAL % of TOTAL NRW CONTROL CAPEX Production Metering District Metering Leak Detection/Pipe Location Equipment Data Logging Equipment 10,103, ,668, ,771,531 4,285, ,285, % 0 0 5,668, ,668, % 2,400, ,400, % 3,418, ,418, % NRW REDUCTION CAPEX Customer Meter Replacement Pressure Reduction (PRVs) Mains replacement Service Pipe replacement Valve Rehabilitation 14,131,835 18,581,836 18,581,836 18,581,836 18,581,836 9,290,918 97,750,097 2,250,000 4,500,000 4,500,000 4,500,000 4,500,000 2,250,000 22,500, % 4,840, ,840, % 5,344,050 10,688,100 10,688,100 10,688,100 10,688,100 5,344,050 53,440, % 1,323,000 2,646,000 2,646,000 2,646,000 2,646,000 1,323,000 13,230, % 373, , , , , ,868 3,738, % MANAGEMENT SYSTEM CAPEX GIS Billing System Hydraulic Modelling Meter Reading Automation MIS TOTAL CAPEX NRW CONTROL OPEX Licensing & Batteries 1,340, ,340, , , % % 545, , % % % 25,575,165 18,581,836 24,250,037 18,581,836 18,581,836 9,290, ,861, , , , , % NRW REDUCTION OPEX Leak Repair 921, , , , , ,554 5,529, , , , , , ,554 5,529, % MANAGEMENT SYSTEM OPEX Licensing & Batteries 0 39,000 39,000 39,000 39,000 39, , ,000 39,000 39,000 39,000 39, , % TOTAL OPEX 921, , ,554 1,085, , ,554 5,849,321 Estimated Volume of NRW reduction due to Capital Investment Table 8 shows an estimate of volume savings as a result of activity carried out in relation to capital investment. For the pipe replacement it has been assumed that there will be a 10% loss from the new asset, so only 90% of the potential savings are achieved for the duration of the 5-year period this is to recognise the fact that there will be some background losses built into the new asset.

252 103 Supplementary Appendix D Investment Category Table 8: Estimated Volume Savings - LMWD Main Diameter - mm Leakage Rate - l/min/km Annual Saving Per Item - m 3 /yr Potential Volume Saving Due to Investment Activity - m Mains replacement - 5 breaks per km , , Leak volume per leak assumed the same , as for pipe repair , , , ,140 13,140 26,280 26,280 26,280 26,280 13, , , , , , Potential Annual Savings 13,140 26,280 26,280 26,280 26,280 13,140 Loss Factor 10% 10% 10% 10% 10% 10% Forecast Annual Savings 11,826 23,652 23,652 23,652 23,652 11,826 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 5,913 11,826 11,826 11,826 11,826 5,913 due to implementation timing effect Savings from Prior Year 11,826 11,826 11,826 11,826 11, % of potential recognised in subsequent years Savings from Prior Years 23,652 23,652 23,652 23,652 Savings from Prior Years 23,652 23,652 23,652 Savings from Prior Years 23,652 23,652 23,652 Annual Saving 5,913 23,652 47,304 70,956 94, ,347 Cumulative Saving 5,913 29,565 76, , , ,780 Meter Replacement - Estimated Volume Saving m 3 /mth/meter m3/year: 24 45,000 90,000 90,000 90,000 90,000 45,000 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 22,500 45,000 45,000 45,000 45,000 22,500 due to implementation timing effect Savings from Prior Year 45,000 45,000 45,000 45,000 45, % of potential recognised in subsequent years Savings from Prior Years 90,000 90,000 90,000 90,000 Savings from Prior Years 90,000 90,000 90,000 Savings from Prior Years 90,000 90,000 90,000 Annual Saving 22,500 90, , , , ,500 Cumulative Saving 22, , , , ,500 1,350,000 Service pipe relacement - Estmated Volume Saving 1 l/hr/service m3/year: 8.8 6,132 12,264 12,264 12,264 12,264 6,132 Note: Savings attributable in Year = 50% of Potential Savings attributable in Year 3,066 6,132 6,132 6,132 6,132 3,066 due to implementation timing effect Savings from Prior Year 6,132 12,264 12,264 12,264 12, % of potential recognised in subsequent years Savings from Prior Years 12,264 12,264 12,264 12,264 Savings from Prior Years 12,264 12,264 12,264 Savings from Prior Years 12,264 12,264 12,264 Annual Saving 3,066 12,264 30,660 42,924 55,188 64,386 Cumulative Saving 3,066 15,330 45,990 88, , ,488 Volume Savings Related to Capital Investment - m 3 Total 31, , , , , ,233 Cumulative 31, , , ,239 1,309,035 1,913,268 Cost Benefit of NRW Reduction Investment The value of savings made by reducing NRW depends upon the volume of water saved and whether it is sold or allows reduction in production output. In networks with a fully satisfied demand the value of the saving lies in the cost of production and distribution, i.e. the losses saved serve to reduce the production requirement. In networks that are resource limited the value of the saving in NRW is equal to the value of revenue less the variable cost of production and distribution, i.e. the losses saved are sold to customers at the applicable tariff rate. The LMWD system is resource limited so the economic justification of NRW investment is related to the sales value of water saved. Table 9 shows a simple calculation of payback period for each of the components of the fiveyear capital investment program, based on the forecast of savings made as a result of the investment and operational activity. This demonstrates the potential for savings as a result of work carried out it does rely, however, on good quality of workmanship and properly targeted expenditure.

253 104 Supplementary Appendix D Capex Component Table 9: NRW Payback Period - LMWD 5 Year Capex (PhP) 5 Year Volume Saving - m 3 5 Year Value Saving (PhP) Payback Period Years Mains replacement 53,440, ,780 8,010, Meter Replacement 22,500,000 1,350,000 30,483, Service Pipe Replacement 13,230, ,488 4,707, Total Capex incl. Non Reduction 114,861,628 1,913,268 43,201, Average Tariff - PhP/m Variable Production Cost - PhP/m Value of Saving - PhP/m

254 105 Supplementary Appendix D ATTACHMENT 4: NRW IMPROVEMENT MEASURES - CKWD NRW improvement has been considered in terms of both asset and operational activity improvement. These are reported on separately below. NRW ASSET IMPROVEMENT No investment for Koronadal in NRW reduction has been scheduled at the request of the water district, preferring to focus resources on other activities. The analysis of ILI in Supplementary Appendix C indicates that Koronadal NRW management performance is good, which supports their request not to invest in NRW management at this time. Provision has been made, however, for the purchase of specialist equipment for leak detection, flow and pressure monitoring, and for GIS and network modeling software in order to support operational activity related to NRW management and reduction. A summary of investment items is given in Table 1. Table 1: NRW Capital Investment Requirements - CKWD Expenditure Type Quantities NRW MANAGEMENT/CONTROL COSTS Leak Detection/Pipe Location Equipment Leak Noise Correlator 1 Electronic Listening Sticks 3 Noise Loggers - set 3 Pipe Location Equipment - All Materials 2 Data Logging Equipment Dual Flow & Pressure Loggers 10 Pressure loggers 20 Hardware purchase - computer 2 NRW REDUCTION CAPEX MANAGEMENT SYSTEMS COST GIS Software Purchase 1 Hardware Purchase - Computers 1 Hydraulic Modelling Software - Epanet Freeware 1 Hardware Purchase - Computers 1 Model Building 1 NRW Operational Activity Improvement Leak Detection and Repair LCWD are not proactively carrying out leak detection and repair activity. These are key activities in the reduction and control of NRW. Further, the analysis of ILI in Supplementary Appendix C, para 114, indicates a relatively good network condition. This being the case, leak detection and repair (as opposed to mains and service replacement, etc.) becomes the prime means of loss reduction. It is suggested that CKWD set up a team to more proactively manage leak detection and

255 106 Supplementary Appendix D repair this could be either in-house or could be contracted out either on a rate basis or a performance basis or combination of both with supervision responsibility remaining with CKWD. The current level of leaks within the system is unknown; however, an attempt at estimating the number of distribution leaks (mains equal to or less than 300mm diameter) has been made based on an average number of leaks per km of main. The estimated number of leaks to be repaired per year along with an estimate of the repair cost are to be included in the operational budget are shown in Table 2. No attempt has been made to attribute savings to the leaks repaired. LCWD should ensure that adequate budget for leak repair is provided in their expense forecast. Table 2: Estimated Distribution Main Line Leaks and Costs - CKWD Diameter (mm) Leaks/yr/ km Network Length (m) No. Of Repairs Leak Repair Cost (PhP) , , , , , , , , , , ,863 TOTAL LEAKS PER YEAR ,554 Illegal Loss Reduction It is considered that illegal connections are not a significant problem within the CKWD network. However, the conversion of illegal connections to legal connections is a double win for any utility, with a reduction in the NRW as well as a revenue gain for no additional production or distribution effort. It is suggested that CKWD strengthen their activity vis a vis illegal connections and consumption to ensure the best control possible of their supply. Water Audit It is recommended that CKWD adopt the IWA water audit methodology as described in Supplementary Appendic C, para 108, Section 4.2, as a performance measurement tool. A key part of this is the recording of unbilled authorised consumption within the water district this is not currently being done by CKWD and using this information to inform operational decisions. Quantifying the amount of water used for operational activities allows comparison to be made with the cost of mitigating the need for the operational use, e.g. if water used for flushing was quantified and a value assigned to it, it would be possible to calculate when remedial action such as swabbing or scouring would have a greater cost benefit.

256 107 Supplementary Appendix D Outsourcing of Operational Services CKWD currently carry out all operational activity in-house. As they are a rapidly growing organization with some positions unfilled there is scope for QMWD to enter into out-sourcing contracts to support the efficient operation to the business. Similarly for specific and enhanced programs of activity (e.g. a crash leak detection and repair program) it may be beneficial to undertake some of the work through outsourcing to have a quick impact. Outsourcing can be used for many of the routine activities, either individually or in combination, e.g. meter reading; billing; collection; meter replacement; reduction of illegal connections; leak detection; leak repair; M&E maintenance activity; NRW reduction. All these contracts should be set up with performance in mind rewarding out performance and penalizing under performance. For performance contracts to be successful, however, the risk-reward criteria and payment mechanisms need to be clearly thought out in order to reinforce the desired performance. Such contracts should also be regarded as a partnership rather than a one-sided opportunity by either party to gain benefit at the expense of the other. The use of outsourcing contracts brings with it the requirement for effective supervision this should be viewed as an opportunity to develop staff within the water district and appropriate capacity building activity undertaken. Supplementary Appendix E shows the types of outsourcing that can be carried out and suggests some performance criteria that could be used to improve utility efficiency. NRW IMPROVEMENT COSTS Costing Rationale NRW reduction activities fall into both capital investment (pipelines, meters, PRVs, specialist equipment, etc.) and operational expense categories (leak repair, equipment licensing and battery replacement). Both of these categories are further described below. 19. Capital Investment. Capital Investment costs can be broken down into investment for control and management of NRW reduction activity (production metering, district metering, specialist equipment purchase, etc.) and investment that directly leads to reduction of NRW (pipe replacement, pressure reduction, meter replacement, etc.). 20. A further type of cost presented here is for Management System Capex this is related more to effective utility management but impacts on NRW reduction performance in terms of supporting the activities carried out in NRW management, and so has been included here. 21. Operational Activity Costs. Operational activity costs have also been considered in relation to NRW Control, NRW Reduction and Management Systems.

257 108 Supplementary Appendix D 22. NRW Control operational expense covers licensing and batteries for the Control Capex assets (leak detection equipment, data loggers etc.). 23. NRW Reduction operational expense covers leak repair. 24. NRW Management System operational expense covers licensing and batteries for the management system assets. CKWD expressly advised that they didn t want to include any investment in NRW reduction in the loan. The only capital costs proposed that have been included is for specialist equipment to be used in the support of operations leak detection, flow and pressure management and for mapping and modeling. Table 3 shows a summary of all proposed investment expenditure items for CKWD. Costs are in Philippine Peso. Table 4 shows the detailed breakdown of these costs by expense category. Costs are in Philippine Peso. Unit costs that have been used in the analysis are based on costs provided included in LWUA Form No. 21 where possible, and also costs kindly provided from the Engineering Department of Maynilad Water. Table 3: Summary of Proposed NRW Investment Expenditure - CKWD EXPENSE CATEGORY NRW CONTROL CAPEX NRW REDUCTION CAPEX MANAGEMENT SYSTEM CAPEX Total Capex TOTAL % of TOTAL 3,889, ,889, % % 1,340, ,340, % 5,229, ,229, % NRW CONTROL OPEX NRW REDUCTION OPEX MANAGEMENT SYSTEM OPEX Total Opex , , % 492, , , , , ,554 2,955, % ,500 43,500 34,500 34, , % 492, , , , , ,054 3,147, % TOTAL ANNUAL TOTAL CUMULATIVE 5,721, , , , , ,054 8,376,322 5,721,554 6,214,107 6,741,161 7,322,215 7,849,269 8,376,322

258 109 Supplementary Appendix D Table 4: Detailed NRW Cost Breakdown - CKWD EXPENSE CATEGORY TOTAL % of TOTAL NRW CONTROL CAPEX Production Metering District Metering Leak Detection/Pipe Location Equipment Data Logging Equipment 3,889, ,889, % % 1,850, ,850, % 2,039, ,039, % NRW REDUCTION CAPEX Customer Meter Replacement Pressure Reduction (PRVs) Mains replacement Service Pipe replacement Valve Rehabilitation % % % % % MANAGEMENT SYSTEM CAPEX GIS Billing System Hydraulic Modelling Meter Reading Automation MIS TOTAL CAPEX NRW CONTROL OPEX Licensing & Batteries 1,340, ,340, , , % % 545, , % % % 5,229, ,229, , , , , % NRW REDUCTION OPEX Leak Repair 492, , , , , ,554 2,955, , , , , , ,554 2,955, % MANAGEMENT SYSTEM OPEX Licensing & Batteries ,500 43,500 34,500 34, , ,500 43,500 34,500 34, , % TOTAL OPEX 492, , , , , ,054 3,147,322

259 Supplementary Appendix E NON REVENUE WATER CONTRACT MECHANISMS 1 Introduction 1 2 Utility Efficiency Improvements 1 3 NRW Efficiency Improvements 1 4 Management Approaches to NRW Reduction 4 5 Performance Management 4 6 Total NRW Management by Contractor Contract Phases Baseline Establishment Implementation Phase Maintenance and Handover Phase Contract Payment Mechanisms 7 7 Suggested Use of Performance Contracts in the Water Districts 8 8 LWUA Support to Water Districts 8 Tables 1 Loss Reduction Process for Real and Apparent Losses 2 2 Capital Investment Activity 5 3 Operational Activity 6

260 1 Supplementary Appendix E 1 INTRODUCTION This supplementary appendix looks at the different options for undertaking non-revenue water (NRW) loss reduction activities within a water utility. It considers the trend in improvements in Utility and NRW efficiency and looks at the causes of and solutions for the reduction of NRW losses. 2 UTILITY EFFICIENCY IMPROVEMENTS Over the last 20 years as a result of a number of different pressures commercial business performance; water resource pressures; increased customer service expectation; etc. there has been a worldwide move to improve utilities operational and service efficiency. A key means of generating this efficiency improvement has been to outsource different components of the operations and service chain in order to utilize external agencies superior experience and capability to defray risk, and to deliver operational results faster than may otherwise have occurred if the capability and experience had been developed in-house. 3 NRW EFFICIENCY IMPROVEMENTS The effective management of NRW to economically efficient levels is a complex task spanning all aspects of a water utility operation and many of the components in isolation or combination have been outsourced to varying degrees of effectiveness. During the last 10 years there has been a move towards greater sharing of the risk in NRW reduction related contracts through the use of performance based contracts. Water losses are caused by a limited number of relatively simple factors. The reduction of real and apparent water losses is achieved by addressing each of the causal factors through operational or investment related processes. Table 1 summarises the causes, detection means, solutions, type of investment and likely resource involved in the loss reduction process for real and apparent losses. Many of the solutions can be achieved through outsourcing either for individual components of NRW reduction activity or combined as a group of components. The strategy adopted to tackle NRW reduction should also take account of the value of the water being saved. To this end it is useful for the utility to map out the variable cost of delivery to discrete service areas to understand where savings will have the greatest financial impact. This can be done quite simply provided that adequate cost and flow data are available, and provides a useful tool for targeting the timing and location of capital investment and operational activity.

261 2 Supplementary Appendix E Table 1: Loss Reduction Process for Real and Apparent Losses REAL LOSSES Causes Loss identification method: Solution: Investment Type Resource Involved Storage Structure deficiency Reservoir drop test Leakage -Identify leak location and Resource Opex Operations; &/or Contractor Leakage repair/restore; Repair Opex or Pipeline breakage, cracks etc. old materials; poor installation; inappropriate materials; Lack of fitting maintenance faulty packing glands, etc. Operational expediency air valves removed, reservoir controls deactivated, etc. Leak detection through combination of visible detection; leak listening; noise logging; leak noise correlation; inert gas injection/detection Detection through combination of visible detection; leak listening; noise logging; leak noise correlation; inert gas detection Repair the leak; or where multiple breaks have occurred replace the pipe along the affected area; Repair or replacement of the damaged fitting depending on severity of damage; Capex Detection Opex; and Equipment - Capex. Repair Opex; Replacement Capex Detection Opex; Repair Opex; Replacement Capex Visible detection; local knowledge Reinstate the altered asset Replacement Capex Operations; Contractor; Operations; Engineering; Procurement; Contractor Operations; Contractor; &/or &/or Operations; Engineering; Procurement; Contractor Operations; &/or contractor High Pressure Install pressure reduction valves New asset - Capex Operations; Contractor APPARENT LOSSES Causes Loss Identification Method Solution Investment Type Resource Involved Illegal connections Tip off; Targeted site investigation; Mutually agree to legitimize the connection; or disconnect & possibly sue the transgressor; Opex; Capex Opex Operations; Contractor Operations; Legal in house/outsource; Illegal consumption Tip off; Office based analysis followed by site investigation; Targeted or random meter accuracy check; Agree a penalty with the transgressor and replace the meter; or If unable to agree penalty - permanent disconnection and possibly sue for losses Opex; Capex Opex Billing; Operations; Customer Service; Operations; Legal Meter under-registration Office based analysis of consumption data followed by site investigation; Targeted or random meter accuracy check; Visible evidence reported by meter reader or customer Meter replacement; Meter replacement Investigation - Opex; Replacement - Capex; Investigation - Opex; Operations; Contractor Operations; Contractor

262 3 Supplementary Appendix E REAL LOSSES Causes Loss identification method: Solution: Investment Type Resource Involved Replacement - Capex; Administrative losses Data error during: recording of billed volume; transfer of recorded information to billing system; Improve quality of data recording processes, e.g. use of hand held meter recording devices Recording & Billing equipment - Capex Operations; Contractor

263 4 Supplementary Appendix E 4 MANAGEMENT APPROACHES TO NRW REDUCTION There are a number of different approaches to NRW management taken by utilities. These vary from carrying out all activities in-house to outsourcing all activities through a single contract. Any of these options could be undertaken by the water districts in their drive to control and manage NRW, subject to: availability of suitably qualified contractors for the selected activities; qualified and experienced supervision staff within the water district; appropriate contract mechanism to fairly share the risk and reward between the water district and the contractor. NRW reduction activity falls into investment and operational areas. For most NRW management capex (capital expenditure) there is a need for design and construction supervision. Depending on the scale of the work to be carried out this may best be undertaken by consultants/contractors. 5 PERFORMANCE MANAGEMENT A key component of outsourced contracting is the link between payment and performance in achieving the contract objectives. Payment based solely on results is unlikely to be attractive to contractors due to the uncertainty of achieving results; however, the promise of higher than usual returns on top of a low base payment provides incentive for rigorous implementation. An essential requirement in the execution of performance contracts is the need for good supervision of the contractors this is an area where training and development of water district staff is likely to be required. Tables 2 and 3 list out the different types of NRW reduction activities (Capital Investment and Operational), and considers payment mechanisms and risks associated with different types of contract form. An alternative approach to performance based reduction of NRW that has been used in a number of large cities is the handing over of the responsibility for all NRW reduction activities to a private contractor this is discussed in Section 6.

264 5 Supplementary Appendix E Table 2: Capital Investment Activity Activity Contract Payment Mechanism Performance Measure Risks Risk Mitigation Production metering Schedule of rates Meter installed & operating correctly Transmission metering Schedule of rates District metering Schedule of rates Meter installed & operating correctly Meter installed & operating correctly Standard contract risks delays, poor workmanship Standard contract risks delays, poor workmanship Standard contract risks delays, poor workmanship Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages Contractor investment paid on a share of the savings made through NRW reduction activities in the established DMA Volume of water saved through NRW reduction activity in the DMA Operational control of the DMA; Possible ve impact on customer service Agree clear rules for operational activity, customer contact, zonal pressures etc.; Good supervision; Mains replacement Schedule of rates Mains installed; tested & operating correctly Service replacement Schedule of rates Service installed; tested & operating correctly Customer replacement meter Pressure Reduction Schedule of rates Meter tested; installed & operating correctly Schedule of rates; Valve installed; tested & operating correctly Standard contract risks delays Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages Standard contract risks delays Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages Standard contract risks delays Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages Standard contract risks delays Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages. Contractor investment - paid on a share of the volume of savings made through use of PRV Volume of water saved against pre installation measurement Perception of reduced level of service due to pressure drop; Need to protect pressure at highest point of the system; Payment based on the actual result; Agree clear rules for operational activity, customer contact, zonal pressures etc.; Good supervision;

265 6 Supplementary Appendix E Table 3: Operational Activity Activity Contract Payment Mechanism Performance Measure Risks Risk Mitigation Leak Detection Leakage survey rate Length of mains surveyed; False survey reports created; Effective PQ; good supervision; Rate per leaks found Leaks found Leak repair Rate per leaks repaired Time to repair from notification; Quality of repair and reinstatement; Leaks created by the contractor; contractor rates inflated to cover uncertainty around workload to locate leaks Standard contract risks delays, poor workmanship; Basic survey rate included in the contract to cover overhead costs Effective PQ; Good supervision; Bonds; Payment retention; Liquidated damages Illegal connections Property survey rate (could be tied to billing system audit and/or mapping system implementation or audit) No. of properties surveyed; No. of illegal connections found Availability of repair spares Contractor complicit with illegal connection owner; survey not rigorously carried out Spares provision by the contractor against an agreed schedule Good supervision; benefit from finding illegal connection passed to contractor Illegal consumption Percentage of the fine levied for illegal connections found Meter survey rate; Percentage of the fine levied for illegal consumption found Meter survey Contractor complicit with illegal connection owner; survey not rigorously carried out Good supervision; benefit from finding illegal consumption passed to contractor Meter Reading Price per meter read No. of meters read - estimated readings not paid for; Customer Billing Price per bill issued No. of bills issued within specified timeframe. Meters not read; Effective PQ; Regular performance audit; Good supervision; bonds; Payment retention Bills not delivered on time; customer complaints and backlogs Effective PQ; Good supervision; regular audit

266 7 Supplementary Appendix E 6 TOTAL NRW MANAGEMENT BY CONTRACTOR 6.1 Contract Phases Typically contracts of this type include three phases: (i) Baseline Establishment Phase; (ii) Implementation Phase; (iii) Maintenance & Handover Phase Baseline Establishment This is the period in which the current level of NRW and average system pressures are agreed between the client and the contractor. Production meter accuracy will be verified and new meters installed where necessary. Flow and pressure measurement and monitoring mechanisms will also be agreed and established. The output from this phase is an agreed baseline level of NRW and pressure against which future performance will be measured, performance targets and timing will also be confirmed and agreed. This phase would typically last for 6 months Implementation Phase This is the period when the control, remedial and operational activities take place: Control activities cover, setting up of district metering areas, valve rehabilitation, etc. Remedial activities are pipe replacement, pressure reduction, customer meter replacement. Operational activities include leak detection & repair, illegal connection and consumption surveys etc. The duration of this phase depends on the scale of the remedial work to be done but typically lasts between 2 to 3 years Maintenance and Handover Phase By this phase the target reduction in NRW should have been achieved and the task of the contractor is to maintain the NRW level below the target level. During this phase there will be no capital investment work (other than perhaps customer meter replacement) but operational activities such as leak detection and repair will continue to ensure that NRW level remains below the target level. Throughout the whole contract period it is important that the client organization has staff working alongside the contractor and that they are trained up in the techniques and methodologies employed by the contractor. 6.2 Contract Payment Mechanisms For the type of contract discussed above there are generally three components to the payment: (i) a fixed fee component to cover local administrative and overhead costs; (ii) a reimbursable component to cover infrastructure design, installation and supervision; and (iii) performance fee triggered when target levels of NRW are achieved this performance fee would cover all other costs of the contractor, specialist expertise, leak detection staff and equipment, monitoring equipment, etc., and margin.

267 8 Supplementary Appendix E The most critical element in relation to the performance fee is to have a clear methodology for calculation of the value of the fee this should be clear about: o the value of the savings made, e.g. what value is placed on the water saved (the cost of production; the average tariff; or the average tariff less the production cost); o the share of the savings between the client and the contractor; o the value of savings made below the target is over performance against target worthy of a greater share of the saving; o the timing of the claim/s for payment. 7 SUGGESTED USE OF PERFORMANCE CONTRACTS IN THE WATER DISTRICTS All water districts visited have expressed an interest in carrying out NRW activities in-house; however, depending on the amount and type of work to be undertaken this may not be the most effective way to undertake the work that is required. There are a number of blocks to using performance contracts within the water districts: lack of experience in water districts of setting up and managing performance contracts; lack of qualified/ experienced contractors with specialized skills (esp. leak detection); difficulty in reducing in-house staff levels. It is more likely that the WDs will want to follow more traditional methods of contracting for example: Design work for the capital investment spending (mains replacement; district metering; pressure reduction etc.) is probably best carried out by external consultants who would also retain control of the implementation supervision with a counterpart from the water district. Specialist operational activity, e.g. leak detection, kept in house unless there are qualified contractors available who could also provide the necessary specialist equipment (helping to defray capital costs). Standard operational activity, e.g. leak repair, surveys for illegal connections, etc. could be outsourced, and some of the work could be remunerated on a performance basis. A contract to manage the whole of the NRW loss reduction program is unlikely to be viable due to the blocks identified above. 8 LWUA SUPPORT TO WATER DISTRICTS There is a clear need for the WDs to be supported in developing additional competency in NRW management and other key operational areas mapping and GIS, network modeling, contract forms for outsourcing and performance contracts, supervisory skills training, etc. This support could come either from the private sector or from LWUA itself. Means of reducing capital costs for software and implementation through sharing arrangements coordinated by LWUA would provide benefit to both LWUA and the WDs and should be explored further.

268 i Supplementary Appendix F SANITATION 1 Sanitation Studies, Documents, and Programs and Projects Studies Documents Programs and Projects 3 2 Sanitation Policy and Strategy Development Background Institutional Arrangements Communal Septic Tanks Trade Waste Management 9 3 Septage Treatment Options Alternatives for Septage Treatment and Disposal Trentment at Wastewater Treatment Plants Treatment at Independent Septage Treatment Plants Septage Treatment Plant (High-Tech Solution) Septage Treatment Plant (Low-Cost Solution) Summary of Advantages and Disadvantages of the Alternatives Dimensioning of Selected Design Alternatives Cost Analysis Selection of Treatment Options 47 4 Original Sanitation Component Designs (as in DFR) Rationale Alternative Analysis Summary of Proposed Sanitation Component Scope Investment Items Sanitation Component Activities Implementation Schedule Cost Estimates Implementation Arrangement 82 Tables 3.1 Applications for Septage Treatment Systems Applications for Alternatives Sedimentation Tanks vs. Primary Ponds Removal Process of Pollutants Management of Constructed Wetlands Advantages and Disadvantages of Constructed Wetlands Summary of Advantages and Disadvantages of Treatment Types Design Values for Pre-treatment Alternative Design Values for Facultative Ponds Alternative Design Values for Maturation Ponds Alternative Recommended Design Parameters Design Values for Pre-Treatment of Alternative Design Values for Constructed Wetlands, Alternative Capital Costs Alternative 1, Option Annual Operational Costs Alternative 1, Option Capital Costs Alternative 1, Option Annual Operational Costs Alternative 1, Option 2 45

269 ii Supplementary Appendix F 3.18 Capital Costs Alternative Annual Operational Costs Alternative Cost Comparison of Alternatives Comparison of Alternatives Decision Matrix Review of Available Septage Treatment Technologies Proposed Sanitation Component in Pilot Water Districts BOD Removal Efficiency of ABR with Filter Desludging Frequency Estimates Travel Time Estimates of Vacuum Trucks Dimension and Treatment Efficiency of Ponds and Other Parts Sanitation Cost Estimate MLUWD Sanitation Cost Estimate - QMWD Sanitation Cost Estimate, Legazpi City Sanitation Cost Estimate, Koronadal City 82 Figures 3.1 Flow Diagram of a Typical High-tech Septage Collection System Overview of Potential Options for Faecal Sludge Treatment Schematic Drawing of a STP System Treating Faecal Sludges Mutualistic Relationship between Algae and Bacteria Treatment System with Surface Flow (FWS) Schematic of a Subsurface Flow System Treatment System with Horizontal Sub-surface Flow (hssf) Treatment System with Vertical Sub-surface Flow (vssf) Section through Sludge Drying Bed Typical Section of a Planted Sludge Drying Bed Monthly Temperatures at Legazpi Water Balance Model Cross-section of an Anaerobic Baffled Reactor with Filter Layout of the Septage Treatment Facility Profile View of the Septage Treatment Facility Location Map of Proposed Septage Treatment Facility, San Fernando City Photographs of the Proposed Location of Septage Treatment Facility, San Fernando City, La Union Location Map of Proposed Septage Treatment Facility, Lucena City Photographs of the Proposed Location of Septage Treatment Facility, Lucena City Location Map of Proposed Septage Treatment Facility, Legazpi City Photos of the Proposed Location of Septage Treatment Facility, Legazpi City Location Map of Proposed Septage Treatment Facility, Koronadal City Photos of the Proposed Location of Septage Treatment Facility, Koronadal City Sanitation Implementation Schedule, MLUWD Proposed institutional Arrangements for Sanitation 83

270 iii Supplementary Appendix F Attachments 1 Dumaguete City Memorandum of Agreement 10 2 Septage Calculation Sheets Detailed Cost Estimate for Sanitation (Constant 2009 Prices) - MLUWD Detailed Cost Estimate for Sanitation (Constant 2009 Prices) QMWD Detailed Cost Estimate for Sanitation (Constant 2009 Prices) - LCWD Detailed Cost Estimate for Sanitation (Constant 2009 Prices), Koronadal City 94

271 1 Supplementary Appendix F 1 SANITATION STUDIES, DOCUMENTS, AND PROGRAMS AND PROJECTS 1.1 Studies Economic Impacts of Sanitation in the Philippines (World Bank, 2008) This study estimated that poor sanitation leads to economic costs in the order of US$1.4 billion or PhP 77.8 billion per year. This is equivalent to about 1.5% of GDP in 2005 and translates into per capita losses of US$16.8 or PhP per year. The health impacts represent the largest source of quantified economic costs. Estimated to be about US$1 billion, this item explains about 71% of the total. Poor sanitation also contributes to the pollution of water resources. The study found that this aspect accounted for about 23% of the total economic costs or US$323 million. Other welfare impacts and the impacts of poor sanitation on tourism were also estimated to exceed US$77 million per year Urban Sewerage and Sanitation: Lessons learned from Case Studies in the Philippines (WPEP, 2003) The objectives of the study were to: (1) assess the performance of the different case studies; (2) analyze the parameters that underlie successful or unsuccessful performance, and (3) provide recommendations for the introduction of sustainable and large-scale sewerage and sanitation systems in the Philippines. The assessment concluded that the Baguio City sewerage system was the most successful, despite its financial and institutional shortcomings. The LGU has created a Public Utilities and Safety Office (PUSO) to manage the sewerage system, and funded significant rehabilitation and improvements to the system over the last eight years. PUSO has improved the service, expanded coverage and is actively planning improvements to the system. It is also the only case study considered environmentally sustainable, with an efficient sewage treatment plant and regular effluent testing. The one area of concern is its weak cost recovery, and the effect of its current dependence on LGU subsidies. The water districts in Zamboanga City and Vigan City were found to manage their sewerage systems capably, based on the well-developed financial systems used for water supply, but their commitment to providing sustainable sanitation services was found wanting. The water districts employ few dedicated sanitation staff, and make clear that the sewerage systems are of secondary importance to them. Neither of the two water districts have made investments in improving their sewerage systems, and both seem prepared to let the systems collapse rather than obtain loan financing for improvements. The other four case studies were surviving despite the inadequacies of their management. The communal toilet in Bonoan Gueset is the only one of the four to collect user fees or employ any staff. The other three cases (Montevista sewerage, Barangay 29 sewerage and Pogo Chico communal toilet) are ostensibly LGU-managed, but the Barangay Councils responsible for the systems have no budget for O&M and few incentives to improve the service. Lessons learned from the seven case studies are: Presence of staff responsible for the performance of the sewerage or sanitation system can improve the chances of success. In most cases, the management of sanitation services is combined with that of water supply services without any specific provisions or budgets for sanitation.

272 2 Supplementary Appendix F Successful financial management is often associated with financial autonomy. Effective cost recovery requires accurate tariff setting, good budgeting and close monitoring of billing and collection, all of which are difficult when financial autonomy is limited (as in the LGU models). Constraints to success identified: High cost of conventional sewer networks, and limited knowledge or experience of lower cost sewerage and sanitation systems. Lack of investment in the sanitation sector. Most government funding tends to go towards water supply facilities, and even when external funds are available, few sanitation service providers appear willing to take out loans to finance sanitation improvements. Key problems include the expense of sewerage and sewage treatment systems, and the common perception that these systems have limited potential for cost recovery. Key recommendations of the study: o o 1.2 Documents LGUs to establish sanitation units (at the city level) and contract out management of sanitation systems to water districts, or to some other agency (private sector, NGO or CBO) if the water district is not sufficiently capable or interested. Explore low cost alternatives such as simplified sewerage systems suitable for collecting septic tank effluent, and cheaper sewage treatment options, such as waste stabilization ponds. A range of low-cost (on-site) sanitation options is also required, as well as long-term investments in hygiene promotion, capacity building for community management of local sanitation facilities, and LGU sanitation support Philippine Environment Monitor (World Bank, 2003) This document is the result of a joint exercise involving national agencies, academia, civil society, and researchers. It is composed of eight sections: (i) an overview of the country s water quality and availability status, and water pollution conditions of surface, ground and coastal waters by region; (ii) the sources of water pollution, including various types of effluents, their generation, and the effects of wastewater discharges to human health and the environment; (iii) the four critical regions that were found to have unsatisfactory rating for water quality and quantity; (iv) the effects and economic losses due to polluted waters, health cost, and costs to fishery and tourism sectors; (v) a description of the water policies, institutional arrangements in water resources management, and enforcement of standards and economic instruments; (vi) urban sanitation and sewerage program and performance; (vii) investment requirements in water pollution control; and (viii) the challenges in implementing an integrated water resources management program Philippine Water Supply Sector Roadmap (NEDA-GTZ, 2008) The Roadmap sets the direction to help the country meet the sector s challenges and intended objectives by 2010 in line with the targets defined by the MTPDP and the 2015 Millennium Development Goals. In the longer term, the Roadmap also aims to ensure adequate long-term availability and accessibility of potable water and sustainable management of wastewater. The Roadmap mentioned the direction of the government to prepare a Sanitation Roadmap

273 3 Supplementary Appendix F and the National Sewerage and Septage Management Program to specifically address sanitation and wastewater issues Philippines Sanitation Sourcebook and Decision Aid (World Bank, 2007) This sourcebook identified that one of the key sector limitations is the gap in knowledge and experience among policy-makers and the handful of sanitation practitioners, both at national and local levels, on strategic sanitation planning and alternative options for sanitation, wastewater collection and treatment. Between the on-site combination of toilet and septic tank system and the traditional sewerage and treatment systems, a vacuum of information exists on other options available and their relative performance. Information on the sanitation and wastewater management requirements of varying types of communities and userenterprises is also lacking. These missing pieces of information are necessary to underpin strategic sanitation planning. This Sanitation Sourcebook is an attempt of addressing the gap in information about sanitation and wastewater management, as well as about the considerations related to planning for sanitation projects in different types of environment. It distills some of the core concepts of sanitation in a user-friendly format so that the book can serve as a practical reference to sanitation professionals and investment decision-makers, particularly the local governments Asian Water Development Outlook 2007 (ADB, 2007) The purpose of the Asian Water Development Outlook (AWDO) is to enable leaders and policy-makers to understand their respective national situations, to appreciate their present sector performance and the key issues in their country, and, by learning from the experiences of other countries, to encourage them to take effective action to tackle those issues. Achievement of these goals has been constrained by the limited availability of data and published current status information, as well as detailed future plans. The contents of this country chapter focus primarily on the water supply and sanitation subsectors, covering other subsectors, such as water resources, only in more general terms action to tackle those issues. Achievement of these goals has been constrained by the limited availability of data and published current status information, as well as detailed future plans. Specifically, this document mentioned that sanitation is not given much attention in the Philippines, resulting to indiscriminate disposal of untreated wastes to bodies of water. 1.3 Programs and Projects LGU Urban Water and Sanitation Project, (WB). With a budget of US$68 million, the project aimed to improve water supply, household toilets, on-site sanitation facilities, and micro-drainage infrastructure. Water Districts Development Project, (WB). Budgeted at US$81 million, the project helped participating LGUs and water districts plan and implement sewerage and sanitation investments. The pilot projects of the DILG-GTZ Water and Sanitation Program in the Visayas have demonstrated the ability of LGUs and communities to develop and implement decentralized wastewater treatment systems (DEWATS) in Bohol and Negros Oriental. Similarly, LGUs,

274 4 Supplementary Appendix F NGOs and communities have developed cost-sharing schemes for the construction, operation and maintenance of urine diversion dry toilets (UDDTs) to manage domestic sewage. Similarly, the United States Agency for International Development (USAID) has provided grant support for piloting affordable wastewater treatment projects in six cities nationwide. The DPWH-LWUA is preparing the NSSMP with an estimated budget of PhP 130 billion for sewerage and PhP 22 billion for septage that would be implemented in conjunction with LGUs and Water Districts. (Roadmap, 2008). The World Bank Water and Sanitation Program is assisting the Philippines in implementing Sustainable Sanitation Program for East Asia ( ). The objective of the project is to increase access of the poor to sustainable sanitation by supporting long-term sustainable frameworks for pro-poor sanitation services in the Philippines. It is implemented at the national level and in six locations (Bauko, Mountain Province; Dagupan City; Guiuan, Eastern Samar; Polomolok, South Cotabato, General Santos City; and Alabel, Sarangani) applying the following thematic interventions: (1) Awareness and Demand Creation, (2) Local Sanitation Capacity Building, and (3) Technology and Service Provider Enhancement. The general strategy for the project is to address both demand and supply-side constraints for sustainable sanitation services and to learn from local implementation as basis for national policy and operational/program guidance.

275 5 Supplementary Appendix F 2 SANITATION POLICY AND STRATEGY DEVELOPMENT 2.1 Background The existing national policy framework for sanitation is governed by the Clean Water Act of 2004 and the Sanitation Code of the Philippines of The 1991 Local Government Code provides a mandate for LGUs to formulate their own local policies in support of the national policies. The national government is currently preparing a National Sewerage and Septage Management Program (NSSMP) in support of the Clean Water Act which is targeted to be completed by August The WDDSP is coordinating with this initiative to ensure that the approach in sanitation is in line with the Clean Water Act program. At the project site level, sanitation intervention will be focused on septage management in either individual (property based) collection or through communal collection systems. This is consistent with the sanitation strategy developed for Metro Manila 77 and with the recognized constraints within the Philippines. The institutional and operational assumptions under which a sanitation policy and strategy can be developed are: (i) (ii) (iii) (iv) (v) There is no comprehensive acceptance of responsibility for septage management at the level of provincial cities; Septic tank installations have to date been unregulated in regards to design, quality and location. Current installations are of generally poor construction quality, allow exfiltration into the environment and have no effective overflow or pump out access. There is no overall strategy or management plan for septage collection and treatment. Treatment and disposal systems are starting to emerge in the provinces. Generally the legislation under which LWUA and the WDs were created and now operate treats sewerage and sanitation in the same manner and mandate as water supply. This is discussed in the Draft Report on Institutional and Financial Assessment of LWUA (May 2009Section) <>. The Clean Water Act Sewerage prescribes that sanitation is the responsibility of the utilities ). It s reasonable to interpret the utilities as being the WDs where they exist. Otherwise the responsibility is with the LGUs. Water supply and sanitation is dissimilar from water supply in two important respects: (i) Regulatory interest in water supply stops at the property boundary with no concern as to how the water supply is used within the property. Regulatory interest in sewerage and sanitation (from both a community health and an environmental viewpoint) is concerned with the facilities within the property, i.e. appropriate toilets, drainage and discharge. Consequently the LGU 77 Sewerage And Sanitation Master Plan For Metro Manila To 2025 Sinclair Knight Merz October 2005.

276 6 Supplementary Appendix F (ii) as the default regulator of property matters, has a significant interest in sewerage and drainage. Piped water supply is recognized by property owners (particularly householders) as a desirable service and there is a strong willingness to pay for it. Sewerage and sanitation is not similarly regarded, particularly in respect to willingness to pay. Internationally sewerage and sanitation is identified as a grudge service in a similar way to solid waste management. For these reasons it is common to have local government involvement in the provision of sanitation services to either mandate it to property owners through regulation or to actually provide it (as in the case of solid waste collection). Furthermore LGUs are responsible for waterways, including drains and canals which are the main areas of environmental impact of poor septage management. Water Districts are significant stakeholders in sanitation, firstly because they have a legislated responsibility vide PD 198, and secondly because WDs have a major concern in regard to groundwater contamination (particularly where there is raw water supply from groundwater) and generally in regard to effective catchment management. 2.2 Institutional Arrangements A desirable institutional framework requires a partnership between WDs and LGUs with a possible engagement of private sectors in areas where they are appropriate and available. The partnership can be structured in a number of ways: (i) (ii) Horizontally where the WD is responsible for sanitation services to the water customers/ connections and the LGU is responsible for the residual.; Vertically where the service obligations (monitoring/ regulating tank installations, managing septage sludge collection from the property, transport of collected sludge to a treatment plant, operations and maintenance of the treatment plant, disposal of residuals).are allocated between the WD and the LGU. The choice of the framework model is subject to a number of considerations: (i) (ii) (iii) (iv) A significant advantage to a septage management system is the existence of data. WDs will have an existing database of connections which can be readily applied to septage management as well as tariff collection.; LGUs have regulatory responsibility for the Building Code and will mandate and inspect toilet and septic tank installations.; LGUs have competence in solid waste collection, which has some logistical carryover to septage collection.; Operation and Maintenance of water treatment plants (by WDs) has some scope for efficiency gains if there is a matched responsibility for septage treatment. The framework can be supported by a Memorandum of Agreement specifying the roles and responsibilities of involved parties and other arrangements. Two versions of a framework has been developed:. Oone in Dumaguete (with the assistance of USAID) and the another in San Fernando (La Union Province).

277 7 Supplementary Appendix F The Dumaguete institutional framework is defined in a draft Memorandum of Agreement (MOA) which is attached (Attachment 1). The features of the Dumaguete draft MOA are: (i) (ii) (iii) (iv) (v) (vi) Septage treatment will be the general responsibility of the LGU (the City Government of Dumaguete). This will include provision of a construction site for a septage treatment plant, construction supervision and subsequent operations and maintenance of the plant; Management of the collection of septage from properties and subsequent transport to the plant will be the responsibility of the WD (Dumaguete Water District); The capital costs for constructing the plant, acquisition of desludging trucks and incidental capital costs such as relevant MIS will be shared equally by the LGU and the WD.; Each of the parties will be responsible for meeting the environmental regulatory requirements of their area of responsibility.; The scheme will be funded by septage fees applied by the WD as a surcharge on the water account and overall accounting will be the responsibility of the WD.; Operating surpluses and deficits (profits and losses) will be shared between the two parties. The San Fernando institutional framework for sanitation is quite different to Dumaguete: (i) The LGU is: - responsible for regulation, monitoring and enforcement of environment - and sanitation laws and ordinances; - prepares ordinance requiring all households and establishments to fix septic tanks and desludge every 5 years; - allocates land for septage treatment facility and communal septic tanks for the poor. (ii) Water District is the implementor: - constructs septage treatment facility and communal septic tanks; - procures vacuum trucks or hires desludgers; - operates/maintains vacuum trucks and septage treatment facilities; - conducts IEC campaign on septage management; - collects septage fees. The Water District Board provides overall guidance and policy direction to Water District. The barangays have an explicit role in coordinating inspection of septic tanks, scheduling and enforcing desludging, and opening of septic tanks during desludging. Private sector can be contracted by WD for desludging and wastewater quality testing. The framework applied in individual water districts will vary in accordance with the considerations in paragraph 309 and the institutional models in Dumaguete and San Fernando serve as a guide..pilot project WDs which have shown a commitment to sewerage/ sanitation responsibility are:

278 8 Supplementary Appendix F Metro La Union (San Fernando and Bauang LGUs) Quezon Metro (Lucena and Pagbilao LGUs) Legazpi City City of Koronadal. To initiate a joint LGU/WD septage management strategy, and in adherence to national policies on sanitation, a local ordinance should be issued (by the LGU) to support implementation requirements and arrangements. Strategic actions to implement the proposed septage management system would involve: inspection and repair of septic tanks; sanitation system for the poor communities; collection of septage through desludging; septage treatment; payment of septage services; land acquisition for the treatment facility; operation and maintenance of facilities; capacity building; information campaign; and monitoring and evaluation. It is assumed that all households (except for the poor) have been issued building permits (in compliance with Building Code requirements) where an approved wastewater disposal system (e.g. septic tanks) is included in the design of individual houses. Households who have defective septic tanks will be required by LGUs to rehabilitate/ replace them (as part of the ordinance) so that groundwater contamination will be minimized. Private establishments and institutions are assumed to have their own wastewater disposal systems in compliance with the Sanitation Code. 2.3 Communal Septic Tanks Communal Septic tanks are described in some detail in Section 3. Strategically, the installation of communal tanks provides some distinct advantages over individual property tanks: (i) (ii) (iii) (iv) (v) (vi) They are, on a property served basis, lower in capital cost.; They can be maintained and managed more effectively by a utility directly or via outsourcing; t. This is particularly so in relation to pumpout.; They are less invasive on the individual property.; They can take advantage of existing household connections to street drains either directly where there are separate grey water and stormwater drains or via an interceptor where the drainage is combined.; In the long term the communal tank can be replaced by a connection to a fully piped system with WWTP (if necessary with installation of a pumping station) or the tank can be replaced by a small package treatment plant. An example of a small package plant is the JBIC funded installation in Pasig City. They are particularly well suited to servicing the urban poor since they can be sited to service housing clusters where there is insufficient space for individual tanks. However, Ccommunal Septic Tanks do have some strategic constraints: (i) (ii) (iii) They are subject to properties having adequate gradient for the connection.; Capital funding (on a cost sharing basis) by the direct beneficiaries may present some management issues. An option in this regard is for the utility (WD or LGU) to fund the construction of the tank and for beneficiaries to fund the connection. If appropriate the beneficiary connection can occur through microfinancing/ revolving credit.; The communal tank generally requires land allocation separate to the

279 9 Supplementary Appendix F beneficiary properties. This can be addressed by using land which has been established for other purposes e.g. for communal services (such as solid waste collection) or for recreation (such as a Basketball court). 2.4 Trade Waste Management Some discharges have a significant impact on the efficacy of septage processes. Amongst these discharges are medical waste, greases (from cooking, particularly restaurants and fast food outlets) and heavy metals (e.g. from chromium plating businesses). In an individual septic tank installation both the cause and effect of high strength discharges are in the hands of the property occupant. In a communal septic tank environment, inappropriate discharges will affect the community as a whole. As a consequence it is important that the LGU takes the lead in developing effective regulation of trade waste discharge to mandate source capture of scheduled pollutants and to ensure that all discharges have domestic level strengths

280 10 Supplementary Appendix F ATTACHMENT 1: DUMAGUETE CITY MEMORANDUM OF AGREEMENT

281 11 Supplementary Appendix F

282 12 Supplementary Appendix F

283 13 Supplementary Appendix F

284 14 Supplementary Appendix F

285 15 Supplementary Appendix F 3 SEPTAGE MANAGEMENT AND TREATMENT OPTIONS Potential options have been considered and are discussed in detail in the following paragraphs. Several options can be excluded based on the lack of appropriateness for the conditions prevailing in subproject areas. The most feasible options have been retained for a further evaluation. 3.1 Alternatives for Septage Treatment and Disposal The three basic alternatives for septage treatment and disposal are aquatic systems, terrestrial systems and mechanical systems, as outlined in Table 3.1. Selecting the appropriate septage treatment and disposal management depends not only on technical issues. Factors that influence the process of selection include: land availability and site conditions; buffer zone requirements; hauling distance; fuel costs; labour costs; costs of disposal; legal and regulatory requirements. Limitations to certain options of untreated septage are potential odor and pathogen problems, which can be reduced by pre-treating and stabilizing the septage before it is applied to the land. Pre-treatment/stabilization is achieved by physical, chemical, or biological processes, whereby it is decreasing the levels of disease-causing organisms as well as the potential for putrefaction of septage. Table 3.1: Applications for Septage Treatment Systems Treatment Systems Aquatic Systems Terrestrial Systems Mechanical Systems Applications Stabilization Ponds Aerated Lagoons Constructed Wetlands Septic Tanks Sludge Drying Beds Landfill Filtration Systems Biological Reactors Activated Sludge 3.2 Treatment at Wastewater Treatment Plants A common option for septage treatment is to use the treatment capacity of a wastewater treatment plant, as the constituents of septage are similar to domestic sewage, even though septage is stronger and more concentrated. The advantages of treating septage at wastewater treatment plants are that many plants are capable of handling some volume of septage and that it centralizes waste treatment operations. However, the disadvantages are the potential for upset processes if the septage addition is not properly controlled, and the

286 16 Supplementary Appendix F increased requirements for handling and disposing of residuals. The main approaches to treating septage at a wastewater treatment plant are as follows (Table 3.2): a) Discharge into the upstream sewer manhole: When septage is added to a sewer upstream of the wastewater treatment plant, substantial dilution of septage occurs prior to it reaching the wastewater treatment plant. This method is only feasible with large sewers and treatment plants. It is economical due to the very simple receiving station design. However, there is a potential for grit and debris to accumulate in the sewer and for odor problems near the manhole. b) Discharge into the plant headworks: Septage is added to sewage upstream of the screening and grit removal processes. This method, like the one mentioned above, is economical because of the very simple receiving station. It also permits operational staff to have control of the septage discharge. c) Discharge into the sludge handling process: Septage is handled as sludge and processed with the treatment plant sludge after pre-treatment in the receiving station. This method reduces the loading to liquid stream processes, and it eliminates the potential for affecting effluent quality. However, there could be an adverse effect on the sludge treatment processes, such as dewatering. Adding septage to the sludge handling process may also cause clogging of the pipes and increase wear on the pumps if the septage is not screened in the receiving station. d) Discharge into both the liquid stream and the sludge handling processes: Septage is pre-treated to separate liquid and solid fractions, which are then further processed. This provides more concentrated sludge for processing and reduces the organic loading to liquid stream processes and the hydraulic loading to sludge processes. Increased operations are required for septage pre-treatment at the receiving station. Alternatives Land Application Treatment at Wastewater Treatment Plants Treatment at Independent Septage Treatment Plants Table 3.2: Applications for Alternatives Application Surface application Subsurface incorporation Burial Addition to upstream sewer manhole Addition to plant headworks Addition to sludge handling process Addition to both liquid stream and sludge handling processes Stabilization lagoon Chlorine oxidation Aerobic digestion Anaerobic digestion Biological and chemical treatment Conditioning and stabilization Composting 3.3 Treatment at Independent Septage Treatment Plants (STP) When wastewater treatment facilities and suitable land are unavailable or do not have adequate capacity, independent septage treatment plants can be of use. Such treatment plants are designed exclusively for treating septage and have several distinctive processes.

287 17 Supplementary Appendix F These STP facilities vary from constructed wetlands over stabilization lagoons, to sophisticated treatment plants. 3.4 Septage Treatment Plant (High-tech Solution) Figure 3.1 is a schematic drawing that illustrates the treatment components for a high-tech septage collection system as already in operation in Manila. However, the costs are far too high for provincial cities. Such a system would not be feasible since the investment cost would be in the range of 150 Million Pesos (about US$3.1 million). Therefore, such a system is not investigated any further. The advantage of using STPs is that they provide a comprehensive regional solution to septage management. The disadvantages for the package STPs are that capital and operation and maintenance costs could be fairly high and that skilled operators are required. STPs use processes such as chlorine oxidation, aerobic digestion, anaerobic digestion, and biological and chemical treatment. Many septage treatment plants use lime to provide both conditioning and stabilization before the septage is dewatered. The liquid residual can be discharged to the STP area or it can undergo further treatment and then be discharged. Septage solids can be sent to a landfill, composted, applied to the land, or incinerated. Another feasible option for septage treatment facilities is composting, in locations where bulking agents are available and the humus product is needed as a soil conditioner. If the necessary bulking agents are not accessible, this method can be expensive. For this reason, it is preferable to dewater septage before composting. Septage is resistant to dewatering; thus, the need for conditioning chemicals is high and varies among different loads. A combination of lime and ferric chloride has been successfully used, as well as polymers. Package septage treatment plants also use other processes to dewater conditioned septage such as screw presses, plate and frame presses, belt presses, rotary vacuum filters, gravityand vacuum-assisted drying beds, and sand drying beds. Figure 3.1: Flow Diagram of a Typical High-tech Septage Collection System Anaerobic Digesters. Fecal sludge can be stabilized in anaerobic digesters. Dewatering characteristics of digested sludge are better than of fresh fecal sludge, and biogas (methane) could be produced during digestion. Generally, anaerobic digesters with biogas production require a rather sophisticated design with mechanical stirring and good solutions for the

288 18 Supplementary Appendix F removal of solid sediments. The marketability of methane is a further problem to resolve. Digesters and the prospect of generating bio-gas must be excluded for the Project since septage is emptied at intervals of three years, and, hence, have undergone substantial biochemical degradation already so that no benefits can be expected from digestion. Conclusion: It is evident that none of the above costly high-tech alternatives can serve as a viable option for the Project, since the O&M costs would be far too high, as the consumers would be unable and unwilling to pay. Therefore, low-cost solutions have to be found in order to solve the environmental and sanitation problem in subproject areas. 3.5 Septage Treatment Plant (Low-cost Solution) Much has been done to study low-cost wastewater treatment technologies adapted to conditions of developing countries. Those technologies have been widely used and proven successful in practice; various good design manuals are available. This is absolutely not the case for treatment of fecal sludge. For Dumaguete there is a low-cost septage treatment facility; however, it is not yet in operation. There are no readily available design guidelines existing for low cost technologies on septage treatment. The only techniques well known so far are highly mechanized solutions derived from conventional sewage sludge treatment technology. Such sophisticated package septage treatment plants can be found in Manila, but as mentioned already before, do not form an option for provincial cities. Figure 3.2 summarizes the various options for fecal sludge treatment (septage). Co-composting with organic solid waste can be eliminated since there is no centralized separate waste collection system for organic waste. As explained before digestion and cotreatment are not valid options. Consequently, this report will focus on wastewater stabilization ponds, settling tanks, constructed wetlands and drying beds. Figure 3.2: Overview of Potential Options for Faecal Sludge Treatment

289 19 Supplementary Appendix F Waste Stabilization Ponds Waste Stabilization Ponds (WSP) are regarded as the method of first choice for the treatment of wastewater in many parts of the world. In Europe WSP are very widely used for small rural communities. In the United States one third of all wastewater treatment plants are WSP, usually serving populations up to 5,000. In warmer climates like in Asia ponds are commonly used for large populations (up to around 1 million). In developing countries and especially in the tropical and equatorial regions sewage treatment by WSPs has been considered an ideal way of using natural processes to improve sewage effluents. Wastewater stabilization pond systems are designed to achieve different forms of treatment in up to three stages in series. For ease of maintenance and flexibility of operation, at least two trains of ponds in parallel should be incorporated in any design (except for the maturation respectively aeration pond). Strong wastewaters, with BOD 5 concentration in excess of about 300 mg/l, are introduced into first-stage anaerobic ponds, which achieve a high volumetric rate of removal. This will be particularly the case in this Project where only sludge (septage) from septic tanks will be treated. Therefore the design of conventional WSPs has to be adopted for a Septage Treatment Plant (STP). Low-cost solutions comprise STP with pond systems, settling tanks and constructed wetland systems. WSP can be classified in respect to the type(s) of biological activity occurring in a pond. Three types are being distinguished: Anaerobic ponds. Facultative ponds. Maturation ponds (also known as aerobic ponds). Wastewater ponds can be used in various combinations. Ponds can be serial or and/or parallel operated. For ease of operation the deep anaerobic ponds can be constructed also as tanks this would be particularly the case of smaller quantities like there are in the Project for fecal sludge (septage) primary treatment. Figure 3.3 shows a typical STP as a pond system, whereby the pre-treatment is done by batch operated settlement tanks. As the size of the solids storage volume needs to be larger, so the pond sludge must be removed more frequently compared to anaerobic ponds treating wastewater only. Figure 3.3: Schematic Drawing of a STP System Treating Faecal Sludges

290 20 Supplementary Appendix F The handling of solids accumulated in pre-settling tanks or in shallow primary ponds is easier compared with deep primary ponds. Solids emptying intervals are relatively short from weeks to a few months and, hence, smaller volumes have to be removed and further treated at a time than when having to handle large bulks of biosolids accumulated in deep ponds over one or more years. On the other hand the frequent desludging requires a longer use of expensive equipment. Table 3.3 gives a quick overlook of the comparison of Sedimentation/Thickening Tanks vs. Primary Ponds for Solids-Liquid Separation Ahead of a Pond System: Table 3.3: Sedimentation Tanks vs. Primary Ponds Primary pond as sedimentation unit Sedimentation / thickening tank Construction Very simple; only limited additional costs More costly but simple in construction Daily operation No mechanical equipment required No mechanical equipment required Sludge removal Every years; very large sludge volumes Every few weeks; small sludge volumes Experience Apparently none Several STPs exist treating faecal sludge; occasional overloading due to delays in emptying Land Requirements Significantly more than systems with settling tanks Less than systems with primary ponds Possible Problems Handling of huge sludge volumes; area for subsequent treatment must be larger (e.g. composting, storage, drying); since operation / maintenance is very irregular it tends to be neglected Organization of regular desludging operation demands a reliable institutional management structure at municipal level to support adequate operation and maintenance. (i) Anaerobic Ponds Given the frequently high organic strength of the faecal sludges, anaerobic ponds with or without prior solids removal in separate settling units are a feasible option for primary pond treatment in warm climates. Use of facultative ponds for raw faecal sludges (FS) may often not be possible due to the high ammonia levels hindering algal growth (see the section below on ammonia toxicity). Also, with the organic strength of faecal sludges being much higher than in wastewater, uneconomically large land requirements would result. FS, which largely or exclusively consist of fresh, high-strength sludge, are not conducive to solids separation. Anaerobic and facultative ponds are designed for BOD removal and maturation ponds for pathogen removal, although some BOD removal occurs in maturation ponds and some pathogen removal in anaerobic and facultative ponds. In many instances only anaerobic and facultative ponds are required. In general, maturation ponds are required only when stronger wastewaters (BOD > 150 mg/l) are to be treated prior to surface water discharge and when the treated wastewater is to be used for unrestricted irrigation (irrigation for vegetable crops). In certain cases the influent into an anaerobic pond can be preliminary treated (coarse screening and grit removal) if needed. However, in our specific case such pre-treatment should be avoided since it would involve some mechanical equipment and would need constant attention by an operator. Anaerobic ponds are deep treatment ponds that exclude oxygen and encourage the growth

291 21 Supplementary Appendix F of bacteria, which break down the effluent. It is in the anaerobic pond that the effluent begins breaking down in the absence of oxygen anaerobically. The anaerobic pond acts like an uncovered septic tank. Anaerobic bacteria break down the organic matter in the effluent, releasing methane and carbon dioxide. Sludge is deposited on the bottom and a crust forms on the surface. They contain an organic loading that is very high relative to the amount of oxygen entering the pond, which maintains anaerobic conditions to the pond surface. They work extremely well in warm climates (can attain 60-85% BOD removal) and have relatively short retention time (for BOD of up to 300 mg/l, one day is sufficient at temperature > 20 C). Anaerobic ponds reduce N, P, K and pathogenic microorganisms by sludge formation and the release of ammonia into the air. As a complete process, the anaerobic pond serves to: Separate out solid from dissolved material as solids settle as bottom sludge. Dissolve further organic material. Break down biodegradable organic material. Store undigested material and non-degradable solids as bottom sludge. Allow partially treated effluent to pass out. These fermentation processes and the activity of anaerobic oxidation throughout the pond remove about 70% of the BOD5 of the effluent. This is a very cost-effective method of reducing BOD5. Normally, a single anaerobic pond in each treatment train is sufficient if the strength of the influent wastewater is less than 1000 mg/l BOD5. For high strength industrial wastes, up to three anaerobic ponds in series might be justifiable but the retention time in any of these ponds should not be less than 1 day. For septage the BOD load is so high that detention times of several days result. Anaerobic ponds are normally designed on the basis of a temperature-dependent empirical value for the permissible organic loading rate. Land requirements will be lowest if the maximum possible BOD loading can be applied. The upper limit of the volumetric BOD loading is determined by odor emissions and minimum ph threshold value at which the anaerobic decomposition processes cease to work. However, the effect of ph must be taken into consideration. Concentrations of H 2 S, which is the sulphur form responsible for odors, increases sharply as the ph drops below 7.5 phenomenon which may occur if an anaerobic pond is heavily loaded or overloaded (based on a BOD loading rate criterion). Sulphide may also impede methane production in anaerobic ponds if occurring at excess concentrations. It is generally accepted that a maximum anaerobic pond loading of 300 g BOD5/m 3 d at 20 C will prevent odor nuisance. Design volumetric loadings may increase to 350 g BOD5/m³d at 25 C. Some technical literature suggest to tolerate loading rates of up to g BOD/m 3 /day in tropical climate. Formation of odour is strongly dependent on the type of sludge to be treated in the plant, notably its sulphate (SO 4 ) concentration and volumetric loading rate, respectively. SO 4 is reduced to hydrogen sulphide (H 2 S) under anaerobic conditions. H 2 S is the compound mainly responsible for obnoxious odors. A maximum sulphate volumetric loading rate of 500 g SO 4 /m³ shall be kept in order to avoid odor nuisance. However, odor is not a problem if the recommended design loadings are not exceeded and if the sulphate concentration in the raw wastewater is less than 300 mg SO 4 /l. The published BOD elimination rates for anaerobic wastewater ponds range from 50 to 85%. Temperature, retention time and BOD loading rate affect removal efficiency. Furthermore, the type of substrate; i.e., sewage, septage or public toilet sludge and its concentration influence the physical and biochemical processes. Experience with anaerobic pond treatment in tropical climate shows that anaerobic digestion is basically completed after about four days. Highest BOD elimination and, thus, reduction of land requirements are attained by applying the highest permissible BOD loading rate. Multi-stage anaerobic ponds, each operated at a maximum BOD loading rate, will, therefore, have the lowest land requirements. Another factor may affect the BOD and COD removal, which is the ammonia (NH 3 ) toxicity to

292 22 Supplementary Appendix F anaerobic bacteria. Strong ammonia inhibition in anaerobic ponds can occur at concentrations >80 mg NH 3 -N/l and may reduce significantly COD elimination to as low as 10% in primary anaerobic ponds Methanogenesis is the rate-limiting step in anaerobic metabolism. Products from the preceding acetogenesis reaction may accumulate and lead to a ph decrease. Optimum ph for methanogenesis amounts to Based on various anaerobic digestion studies it was found that a ph of 6.0 probably constitutes the absolute, lowest limit for anaerobic ponds in the tropics when treating high-strength wastes. Acidic wastewaters require neutralizing prior to treatment in anaerobic ponds as a low ph can be considered a toxicant for anaerobic bacteria. Determination of the maximum BOD loading rate beyond which ph is likely to drop below this threshold value is, therefore, important. For example, a study on anaerobic pond treatment revealed that a volumetric BOD loading rate of around 750 g/m 3 d resulted in a pond ph of 6.0. In case of low ph there should be either a surface aeration of the ph should be adjusted with lime. Determination of the maximum BOD loading rate beyond which ph is likely to drop below this threshold value is, therefore, important. A reason why anaerobic ponds treating FS might be loaded at higher rates than anaerobic ponds treating wastewater is the high alkalinity of FS imparted by the formation of ammonia bicarbonate (NH 4 HCO 3 ) during the hydrolysis of urea (H 2 NCONH 2 ) resulting in a high buffer capacity. This acts as a safeguard against the drop in ph caused by the potential predominance of acid over methaneforming bacteria induced by excessive organic loading rates. Technical literature suggest a safe volumetric BOD loading of 300 g/m³ d for anaerobic wastewater ponds at temperatures above 20 C. A tol erance value of 400 g/m³ d is given at which odour emissions can still be avoided. As the septage has already undergone a long-term treatment and mineralization some experts are suggesting that anaerobic ponds might not be needed as septage cannot be digested any further. Data on the content of total volatile solids (TVS) in septage, one measure indicating the anaerobic degradability, differ significantly. However, the degree of inimize ed on is not only dependent on temperature, but also on emptying frequency, sludge composition and on grease content. In many cases, septage is probably inimize ed only partially during storage in the septage tank. Findings by the US EPA tend to support this assumption: anaerobic digestion of septage yielded TVS reductions of %. Results obtained at a full-scale septage treatment plant in Thailand having unmixed, batch-operated, unsealed anaerobic digesters, and with lab-scale digestibility tests revealed that septage is anaerobically degradable to a varying degree. This reflects the fact that individual truckloads of septage collected in cities usually exhibit widely varying biochemical stability. Anaerobic degradation of medium to high-strength FS can be impaired by toxicity due to high ammonia (NH3) concentrations. NH 3 -N threshold levels in the influent to anaerobic ponds in the tropics should not exceed mg/l. The often-high ammonia contents of FS may also lead to toxicity in facultative ponds, either impairing or preventing the growth of algae. The respective threshold level in facultative pond influents is 400 mg NH 4 -N/l. Suggested but as yet untested countermeasures to reduce ammonia and its toxicity effects are intermittent surface aeration at the inlet section of facultative ponds treating FS; cascade aeration of the pond influent; pond effluent recirculation; lime addition, or a combination thereof. Therefore, treatment technologies such as continuously mixed anaerobic digesters with gas utilization (bio-digestion) or chemically aided mechanical dewatering in centrifuges or filter presses, as are used for the treating sludges in industrialized countries, prove unfeasible for the majority of situations in the Philippines. Pond systems constitute one basic option to treat faecal sludges, as they tend to be associated with low investment and operating cost and do not require skilled labor.

293 23 Supplementary Appendix F (ii) Facultative Ponds Facultative ponds (1-2 m deep) are of two types: primary facultative ponds, which receive raw wastewater, and secondary facultative ponds, which receive settled wastewater from the anaerobic ponds. They are designed for BOD removal on the basis of a relatively low surface loading ( kg BOD/ha d at temperature between 20 C and 25 C) to permit the development of a healthy algal population as the oxygen for BOD removal by the pond bacteria is mostly generated by algal photosynthesis. Due to the algae facultative ponds are colored dark green, although they may occasionally appear red or pink (especially when slightly overloaded) due to the presence of anaerobic purple sulphide-oxidizing photosynthetic bacteria. The concentration of algae in a healthy facultative pond depends on loading and temperature, but is usually in the range µg chlorophyll a per liter. Effluent entering the facultative pond from the anaerobic pond (secondary facultative pond) is converted into carbon dioxide, water and new bacterial and algae cells in the presence of oxygen, i.e., aerobically. Algae populations within the aerobic pond require sunlight. They develop and produce oxygen in excess of their own requirements. It is this excess of oxygen that is used by bacteria to further break down the organic matter within the effluent. The algal production of oxygen occurs near the surface of aerobic ponds to the depth to which light can penetrate (i.e. typically up to 500 mm). Oxygen can also be introduced by wind. Aerobic pond is more accurately termed facultative, as in practice the pond usually has an aerobic upper layer and anaerobic lower layer. This facultative condition occurs because high oxygen levels cannot be maintained to the total depth of aerobic ponds. So a fully aerobic surface layer develops, along with an aerobic/anaerobic intermediate layer, and a fully anaerobic layer on the pond bottom. As a result of the photosynthetic activities of the pond algae, there is a diurnal variation in the concentration of dissolved oxygen. For a typical facultative pond, the water column will be predominantly aerobic at the time of peak sun radiation and predominantly anaerobic at sunrise. After sunrise, the dissolved oxygen level gradually rises to a maximum in the midafternoon, after which it falls to a minimum during the night. The position of the oxypause similarly changes, as does the ph since at peak algal activity carbonate and bicarbonate ions react to provide more carbon dioxide for the algae, so leaving an excess of hydroxyl ions with the result that the ph can rise to above 9 which kills faecal bacteria. The wind has an important effect on the behavior of facultative ponds, as it induces vertical mixing of the pond liquid. Good mixing ensures a more uniform distribution of BOD, dissolved oxygen, bacteria and algae and hence a better degree of waste stabilization. The facultative pond will remove odor and kill most pathogenic microorganisms. As a complete process, the facultative pond serves to: Further treat the effluent anaerobically through separation, dissolving and digestion of organic material. Aerobically break down most remaining organic solids near the pond surface. Reduce the amount of disease-causing microorganisms. Allow the loss of 20% to 30% of the ammonia, contained within the effluent, into the air. Store residues from digestion, as well as non-degradable solids, as bottom sludge. Allow treated effluent to pass out into a waterway or additional treatment system (i.e. maturation pond, wetland system). Sometimes two or more consecutive smaller facultative ponds are constructed instead of a very large one. This may be more practical for effective desludging.

294 24 Supplementary Appendix F (iii) Maturation Ponds (Aerated Ponds/Lagoons) Maturation ponds, which succeed the primary or secondary facultative pond are primarily designed for tertiary treatment, i.e., the removal of pathogens, nutrients and possibly algae. They are very shallow (usually around 1 m depth) to allow light penetration to the bottom and aerobic conditions throughout the whole depth. The ponds follow a secondary treatment i.e., a facultative pond. The size and number of maturation ponds needed in series is determined by the required retention time to achieve a specified effluent pathogen concentration. In the absence of effluent limits for pathogens, maturation ponds act as a buffer for facultative pond failure and are useful for nutrient removal The principal mechanisms for faecal bacterial removal in maturation ponds are now known to be: time (retention time as pathogen attenuation occurs over time); temperature (faecal bacteria, usually inimize in terms of faecal coliforms, dies off increasingly at higher temperature); high ph (> 9); and high light intensity together with high dissolved oxygen concentration. Regarding viruses removal it is generally recognized that it occurs by adsorption on to settleable solids (including the pond algae) and consequent sedimentation. Some parasites can be removed as well. Protozoan cysts and helminth eggs are removed by sedimentation. Their settling velocities are quite high and consequently most removal takes place in the anaerobic and facultative ponds. In facultative and maturation ponds, ammonia is incorporated into new algal biomass. Eventually the algae become moribund and settle to the bottom of the pond; around 20% of the algal cell mass is non-biodegradable and the nitrogen associated with this fraction remains immobilized in the pond sediment. That associated with the biodegradable fraction eventually diffuses back into the pond liquid and is recycled back into algal cells to start the process again. At high ph, some of the ammonia will leave the pond by volatilization. Figure 3.4 shows the mutualistic relationship between the algae and the bacteria in facultative and maturation ponds. Figue 3.4: Mutualistic Relationship between Algae and Bacteria (iv) Site Selection Criteria for Pond Systems When choosing a site to construct a pond system, an area should be selected where the water table is low and the soil is heavy and impermeable. Silt or clay soils are ideal for pond foundations and construction. Building ponds over coarse sands, gravels, fractured rock or other materials, that will allow effluent to seep out of the pond or allow groundwater to enter in, should be avoided.

295 25 Supplementary Appendix F No part of the system to be within 200 m (preferably 500 m) of any dwelling house. If possible, ponds should be sited downwind from dwellings, roads and other public places. The greater the distance from a potential complainant the better. Soil must be suitable for pond stability. Geotechnical aspects, if not taken into consideration, may cause the WSP system to malfunction. A geotechnical investigation of the site should be made during the final design stage to ensure correct embankment design and to determine whether the soil is sufficiently permeable to require the pond to be lined. A stable and impermeable embankment core shall be formed, whether chosen from an available local or imported soil. After compaction, the soil should have a coefficient of permeability of 10-7 m/s. The following geotechnical considerations should be taken when constructing the embankment: Embankments must be well constructed to prevent seepage, excessive settlement and erosion over time. Embankment slopes are commonly 1 (vertical) to 3 (horizontal) internally and 1 to externally. Slope stability should be ascertained according to standard soil mechanics procedures for small earth dams. External embankments should be protected from storm water erosion by providing adequate drainage. Internal embankments should be protected from wave action erosion by using precast concrete slabs or stone rip-rap at top water level. The following are additional general considerations when locating a site for a pond: Allowing for a straight run of pipelines, tractors and desludging vehicles to the ponds. To minimize earthworks, site should be flat or gently sloping. Siting in an open area so as to take advantage of the sun and wind, which assist the efficient operation of the facultative pond and thus improve the quality of the discharge. If soil is permeable (>10-6 m/s), a plastic membrane plastic may be used to line the pond. Keeping systems away from overhead or underground power lines. Keeping systems from potable water lines. Avoiding sites that are likely to flood, have steep slopes that run towards a waterway, spring or borehole, are pipe drained or mole ploughed, are likely to freeze over, or have recently been cleared of trees or similarly disturbed. Constructing the system below the effluent elevation so that gravity can be used to carry the effluent. Orientating the longest diagonal dimension of the pond parallel to the direction of the prevailing wind. Ponds should not be located within 2 km of airports, as any birds attracted to the ponds may constitute a risk to air navigation. (v) Effluent Limits (Performance Indicators) Effluent limits represent the maximum amount of pollutants allowed to be discharged into the environment. Hence, prior to design, these limits must be known since they will be used as the water quality design objectives. The following values are proposed for the quality of the effluent: Filtered BOD = Filtered COD = 30 mg/l (non-algal BOD) 60 mg/l (non-algal COD)

296 26 Supplementary Appendix F Suspended solids = 50 mg/l Total nitrogen = 15 mg/l Total phosphorus = 2 mg/l Total ammonia = 50 mg N/l Sulphide= 2 mg/l ph = Nematode egg < 1 /l Faecal coliform count < 3000 per 100 ml (vi) Operation and Management of Wastewater Stabilization Ponds Maintenance of the ponds should be carried out regularly to avoid odors, flies and mosquito nuisances. The routine maintenance includes: Removing any matter from the inlet and outlet works; Cutting grasses on the embankment and removing it; Removing floating scum and floating macrophytes from the surface of the maturation and facultative ponds; Repairing any damaged of the embankment; and Repairing any damage of the fences or gates. The operator must be given precise information on what must be done at the pond site. Since water quality improvement is the primary objective, the performance indicators should be controlled in regular intervals. If monitoring results indicate that the system is not working according to the objectives, corrective measures must be applied. Improvement of water quality may be assessed by monitoring a range of inflow and outflow water-quality parameters. Useful parameters for monitoring the performance include dissolved oxygen (DO), BOD, COD, total phosphorus, orthophosphorus, total nitrogen, total Kjeldhal nitrogen, ammonia nitrogen, oxidized nitrogen, faecal coliform, ph, suspended solids, electrical conductivity, and heavy metal concentrations. Water flow rates into the ponds as well as the outflow must also be measured Constructed Wetlands Constructed wetlands (CWs) are planned systems designed and constructed to employ wetland vegetation to assist in treating wastewater in a more controlled environment than occurs in natural wetlands. The pollutants removed by CW s include organic materials, suspended solids, nutrients, pathogens, heavy metals and other toxic or hazardous pollutants (Table 3.4). In municipal applications, they can follow traditional sewage treatment processes. Different types of constructed wetlands can effectively treat primary, secondary or tertiary treated sewage. However, wetlands should not be used to treat raw sewage or septage and, in industrial situations, the wastes may need to be pre-treated so that the biological elements of the wetlands can function effectively with the effluent. Pollutant BOD Organic contaminants Suspended solids Nitrogen Table 3.4: Removal Process of Pollutants Removal Process Biological degradation, sedimentation, microbial uptake Adsorption, volatilization, photolysis, biotic/abiotic degradation Sedimentation, filtration Sedimentation, volatilization, microbial uptake, nitrification, denitrification

297 27 Supplementary Appendix F Phosphorous Phatogens Heavy metals Sedimentation, filtration, adsorption, microbial uptake Natural die-off, sedimentation, filtration, adsorption, predation, UV degradation Sedimentation, adsorption, plant uptake The ability of constructed wetlands to remove nitrogen is very limited. Harvesting removes less than 20% of influent nitrogen at conventional loading rates. Therefore, constructed wetlands should be used in conjunction with other aerobic treatment processes that can nitrify to remove nitrogen. Phosphorus removal in constructed wetlands is limited to seasonal uptake by the plants, which is not only minor compared to the phosphorus load in municipal wastewater, but is negated during the plants senescence, and to sorption to influent solids which are captured, soils or plant detritus, all of which have a limited capacity. Wetland systems can significantly reduce biological oxygen demand (BOD), suspended solids (SS), nitrogen, trace organics, metals and pathogens. The treatment mechanisms consist of sedimentation, chemical precipitation, adsorption, microbial interactions with BOD, SS and nitrogen. There are six major biological reactions involved in the performance of constructed wetlands, namely: photosynthesis, respiration, fermentation, nitrification, denitrification and microbial phosphorus removal. Constructed wetland treatment systems exist in different applications. There are free flowing water systems and sub-surface systems. The sub-surface systems can be distinguished into vertical and horizontal systems. Constructed wetlands are complex systems in terms of biology, hydraulics and water chemistry. Unfortunately there is a lack of quality data of sufficient detail, both temporally and spatially, on full-scale constructed wetlands. Due to the lack of data, designers have been forced to derive design parameters by aggregating performance data from a variety of wetlands, which leads to uncertainties about the validity of the parameters. For example, data from small wetlands with minimal pretreatment might be combined with data from large wetlands used for polishing secondary effluent. Further, data from constructed wetlands treating normal wastewater have sometimes been used to derive design parameters for more concentrated municipal treatment applications like faecal sludges respectively septage as this will be the case all sub-projects. Constructed wetland systems can function under different conditions depending upon their type of construction. Basically there are two systems: the free water surface system and the subsurface system which again is divided into a horizontal flowing system and a vertical flowing system. (i) Free Water Surface Systems (FWS) A Free Water Surface System consists of basins or channels, with a natural or constructed subsurface barrier of clay or impervious geotechnical material to prevent seepage, soil or another suitable medium to support the vegetation, and water at a relatively shallow depth flowing over the soil surface (Figure 3.5). FWS systems are appropriate for polishing secondary and tertiary effluents. The environment in the FWS systems is generally aerobic at, and near, the surface, tending toward anoxic conditions near the bottom sediment. The microbial film grows on all available plant surfaces, and is the main mechanism of pollutant removal. The most common problem with hssf is blockage, particularly around the inlet zone, leading either to short circuiting, surface flow or both. This occurs because of poor hydraulic design, insufficient flow distribution at the inlet,

298 28 Supplementary Appendix F and inappropriate choice of porous media for the inlet zone. For the treatment of septage SSF will not be further contemplated since such system is not very suitable for the high concentration of pollutants from septage. Figure 3.5: Treatment System with Surface Flow (FWS) (ii) Subsurface Flow Systems (SSF) 1 A Subsurface Flow System consists of a trench or bed underline with an impermeable layer of clay or synthetic lines (Figure 3.6). The bed contains the media which supports the growth of vegetation. The system is built with a slight inclination between inlet and outlet and the effluent flows into a transverse channel filled with broken stones. The inlet channel can be either of perforated or gated pipe. From there the treated water flows horizontally through the rhizosphere of the wetland plants. During this passage the flow is treated by filtration, sorption and precipitation processes in soil and by microbiological degradation. The physical-chemical and biological processes correspond to the mechanical and biological processes in conventional sewage treatment plants including denitrification. The effluent is collected at the outlet channel (filled with coarse gravel) and can then be discharged into the receiving water. Figure 3.6: Schematic of a Subsurface Flow System SSF systems are suitable for treating primary wastewater like septic tank effluent or waste that require removal of high concentrations organic materials, suspended solids, pathogenic organisms, ammonia nitrogen and phosphorus. There is also hardly any opportunity for mosquitoes or vermin to breed, so the system is safer from the public health perspective. The SSF can be constructed in two different types of SSF systems: Horizontal flow SSF (hssf). Vertical flow SSF (vssf).

299 29 Supplementary Appendix F Figures 3.7 and 3.8 illustrate the differences between the two types. The most common problem with hssf is blockage, particularly around the inlet zone, leading to short circuiting and surface flow. For this Project only the vssf type of treatment system will be selected for further assessment. Figure 3.7: Treatment System with Horizontal Sub-surface Flow (hssf) Figure 3.8: Treatment System with Vertical Sub-surface Flow (vssf) (iii) Vertical Sub-Surface System (vss) A vertical-flow constructed wetland is a bed equipped with a drained gravel and sand filter and planted with marsh plants. The sludge is loaded on the bed and dewatered mainly by percolation in the filter, approximately one third of the water content is lost through evapotranspiration by the plants. The solid fraction remains on the bed. The plants develop an extensive root system, which maintains the permeability of the sludge layer. Hence, new sludge can be added continuously and the dewatered sludge layer has to be removed only once every few years for systems being fed by normal sewage. For septage, which is a highly mineralized sludge with a high BOD demand there are hardly any design parameters available. The long solids retention period favours further mineralization and pathogen die-off. The dewatered sludge shows a greatly reduced volume and a water content of approximately

300 30 Supplementary Appendix F 70%. Its low pathogen content allows direct reuse in agriculture. The gravel-sludge-root medium has not only good physical filtering characteristics but also functions as a biological filter. The quality of the liquid fraction percolating through the filter will have improved considerably compared with raw septage, but might still require a polishing treatment. Two CW units would be required, considering a desludging of the system after some time of operation. The structure would consist of a stone-cement foundation with drainage channels and 50 cm of gravel and sand filter. The outside vertical wall of the unit would be constructed in bricks, 100 cm freeboard above the filter will provide space for sludge accumulation during several years. The filter would be planted with marsh plants. In order to avoid damage to the roots vent pipes should be inserted onto the under drain system. The percolate would be collected in a pump sump, and evacuated with a pump into the neighbouring drainage channel or into the nearby leachate treatment ponds for further treatment. The further treatment would depend upon the regulations for the receiving water respectively the re-use of the treated water. (iv) Operation and Management of Constructed Wetlands The operation of a constructed wetland depends on the type of wetland, and the number of preliminary treatment units used for wastewater treatment. Constructed wetlands are designed to be passive and low maintenance, thereby not requiring continual upkeep. Constructed wetland, however, are dynamic ecosystems, with many variables that require managing (Table 3.5). If not, problems may occur when the operator does not understand the needed operation and maintenance, the wetland is either hydraulically or organically overloaded, unavoidable disasters (e.g., flooding, drought) occur, the wetland is plagued by weed problems and/or if excessive quantities of sediments, litter and pollutants accumulate and are not removed from the wetland. Accumulated sludge has to be removed in regular intervals. The removed sludge is easy to handle and should be stored for 6 months before being used either in agriculture or landfill. The operation of a constructed wetland shall include: maintaining the embankments; removing litter and debris; checking the water flow rate; checking the performance parameters removing any blockages in the inlet and outlet works; replacing plants as required; removing any unwanted weed species; checking the plants for any sign of diseases; protecting the deep open water; correcting erosion and slumping; and checking for any signs of over-flooding (for sub-surface flow constructed wetlands). Since water quality improvement is the primary objective, the performance indicator should either be presented as a concentration or load at the outlet, or a comparison of inflow and outflows, also in terms of concentrations or loads. If monitoring results indicate that the system is not working according to the objectives, corrective measures must be applied. Improvement of water quality may be assessed by monitoring a range of inflow and outflow water-quality parameters. Useful parameters for monitoring wetland performance include dissolved oxygen (DO), BOD, COD, total phosphorus, orthophosphorus, total nitrogen, total Kjeldhal nitrogen, ammonia nitrogen, oxidized nitrogen, faecal coliform, ph, suspended solids, electrical conductivity, and heavy metal concentrations. Water flow rates to and from the constructed wetland also must be measured.

301 31 Supplementary Appendix F Table 3.5: Management of Constructed Wetlands Task Example Operational control Varying water level Monitoring Water quality, habitat, flora and fauna Inspection Structures and embankments Maintenance Repair damage to the structures and control weeds (v) Aquatic Plants As aquatic plants, the following plants would be suitable for constructed wetlands in the subproject areas: Common Reeds (Phragmites spp.) have broad-spectrum qualities and are the plant most commonly used in CW. Cattails (Typha spp.) are successfully used in the pilot septage treatment CW in Thailand, they require regulation of the bed humidity. Vetiver grass (Vetiveria zizanioides) is very resistant to a wide range of environmental conditions, it is commonly used for soil stabilization because of its extensive root system and has been successful in CW too. Sedges and bulrushes are other common CW plants (vi) Advantages and Disadvantages of Constructed Wetlands Table 3.6 summarizes the advantages and disadvantages of constructed wetlands particularly for the treatment with sludges originating from septage tanks. Table 3.6: Advantages and Disadvantages of Constructed Wetlands Constructed Wetlands Advantages Disadvantages Construction and operation inexpensive Land requirements in flat terrain Maintenance is easy Very little existing design and operation criteria particularly for septage Easy treatment, no mechanics involved Limited understanding of process dynamics particularly for septage Tolerant of fluctuations in normal loading rates Cost of gravel or fill & grading of area of sewage Provide ecologic benefits Possible problems with pests (vii) Conclusion For technical reasons a constructed wetland system using the vertical subsurface flow principle (vssf) should be chosen. However, since only septage will be treated, pretreatment is compulsory before discharging septage into the constructed wetlands system. Pre-treatment could be a combination of anaerobic and facultative ponds or anaerobic batch operated settlement tanks followed by facultative ponds Sludge Drying Beds For septage treatment, sludge drying beds need the have a pre-treatment which comprises an anaerobic pond treatment. In addition, sludge drying beds need for the percolate a further treatment, either through pond systems or constructed wetlands. Therefore they form a combination with the alternatives for ponds respectively constructed wetlands. Due to the

302 32 Supplementary Appendix F double handling of sludge (anaerobic pre-treatment and the drying bed itself) this option needs excessive operation. Further, they need roofing respectively sheeting during the rainy season. This again makes it uneconomical. In developing countries, anaerobic digestion mainly constitutes a sustainable technology as a small-scale option. Its use at the scale of centralized urban treatment plants, however, may not yet be sustainable in many situations as it implies the use of capital-intensive, mechanized installations and skilled operators. Therefore only a pre-treatment by anaerobic ponds should be proposed. Sludge drying beds consist basically of a gravel-sand filter, equipped with a drainage system (Figure 3.9). The sludge is loaded on the bed, and the water is evacuated mainly by percolation through the filter and to a minor part by evaporation. The dewatered sludge has to be removed after 10 to 15 days, depending on the rate of dewatering. A new batch of sludge can then be loaded. It is not possible to continuously load sludge, because the accumulating sludge would form a compact and impermeable layer, making the percolation of the liquid impossible. Water contents of as low as 60 % can be obtained in the dried sludge. The consistency is suitable for disposal or reuse. However, the pathogen content is still too high for safe reuse and requires a post treatment, if reuse is desired. Some biomass growth might be possible in the gravel filter, enhancing its treatment property for the percolating liquid. The quality of the percolate will have improved considerably compared with raw septage, but still require a polishing treatment before being discharged into the environment. Sludge drying beds can produce a solids product, which may be used either as soil conditioner or fertilizer in agriculture, or deposited in designated areas without causing damage to the environment. In most cities, the solids removed from the drying beds after a determined period (several weeks to a few months) require further storage and sun drying to attain the hygienic quality for unrestricted use. Where dried sludge is used in agriculture, helminth (nematode) egg counts should be the decisive quality criterion in areas where helminthic infections are endemic. A maximum nematode (roundworm) egg count of 3-8 eggs/g TS should be the limit. Figure 3.9: Section through Sludge Drying Bed Gravity percolation and evaporation are the two processes responsible for sludge dewatering and drying. A frequently observed phenomenon is the fact that when fresh, anaerobic sludges are loaded onto the drying beds, the sludge solids rise to the surface due to degasification. This enhances the solids-liquid separation process and reduces resistance to seepage. Evaporation causes the mud to crack, thereby leading to improved evaporative water losses and enhanced drainage of the sludge liquid and rainwater. From % of the faecal sludge volume applied to sludge drying beds will emerge as drained liquid (percolate). The ratio between drained and evaporated liquid is dependent on type of sludge, weather conditions and operating characteristics of the particular drying bed.

303 33 Supplementary Appendix F Drying bed percolate tends to exhibit considerably lower levels of contaminants than settling tank supernatant. This liquid will, nevertheless, also have to be subjected to a suitable form of treatment (e.g. in facultative ponds). Maximum allowable solids loading rates can be achieved with a sludge application depth of 20 cm. To attain a 25 % solids content, drying periods of 5 to 15 days are required depending on the different bed loading rates applied ( kg TS/m² y). During dry season a good dewaterability can be expected for septage treated in sludge drying beds with up to 70 % TS in eight days. During the rainy season the beds need to be covered, which is normally done by providing roofs above the sludge drying beds, which of course renders this alternative as expensive. To ensure a complete helminth eggs elimination several months of storage at temperatures of 25 C or a sludge water contents of <= 5 % TS mus t be attained. To guarantee a hygienically safe product for use in agriculture sludge drying experiments have to be conducted to determine safe drying periods and required sludge dryness. Removal of the dewatered or dried sludge is very labour-intensive or requires mechanical equipment. Planted sludge drying beds (reed beds) could inimize the need for frequent removal of dried sludge as these can be operated for several years before sludge removal becomes necessary (Figure 3.10). A number of reed beds treating sewage sludge have been operating successfully in Europe and in North America over periods of up to eight years without sludge removal. Figure 3.10: Typical Section of a Planted Sludge Drying Bed

304 34 Supplementary Appendix F However, for faecal sludge treatment they have not been applied so far. One major reason might be that reed beds treating faecal sludges require a passive ventilation system to avoid anaerobic conditions in the root zone. Therefore, planted sludge drying beds are not being taken as an option. The sludge drying bed would be composed of six units each having 370 m². Septage would be loaded in one unit, during two to three days, and to a maximal sludge height of 30 cm. Then sludge would be left to dry and other units would be loaded meanwhile. After 10 to 15 days, the dried sludge has to be removed. The duration of one operation cycle may vary, depending on the climate and on the actual loading. Especially heavy rains may cause prolonged drying time. To ameliorate this problem, plastic sheets will have to be laid on top of those beds which dry and are not being loaded with septage. Better, but more expensive, would be to roof the entire area. Pumps would have to be operated for spreading the sludge into the drying beds. Maintenance would be limited to periodical replacing of the upper sand layer, which is accidentally removed together with sludge. The post-treatment, which is necessary if sludge is to be used in agriculture, does not require specific facilities. The dewatered sludge can simply be piled nearby the treatment plant. Conclusion; since treatment of septage cannot be done in sludge drying beds without having a pre-treatment, this option is obviously too labor-intensive, since not only the drying beds have to be loaded and off loaded but also the anaerobic pond (or settling tanks) need regular desludging. Further, they required protection against the rain. Due to all these reasons sludge drying beds cannot be recommended Solids Treatment (for all Alternatives) The thickened, dewatered or partially dried sludge ( process sludge ), obtained after solids separation by sedimentation or on sludge drying beds, requires further treatment. The treatment objectives are dependent on the final use of the process sludge, viz. in horticulture, agriculture or landfilling. Options of treatment of solids removed from the stream of faecal sludges (septage): A) For process sludges produced by sedimentation scum formation in settling/thickening tanks or in primary ponds: Dewatering/drying on sludge drying beds. Dewatering/sun-drying on open land within the FSTP premises. Co-composting with for example municipal/organic refuse or with an alternate organic material such as sawdust or woodchips. Note: The dewatering/drying period is dependent on climatic conditions and may range from days to weeks to obtain a spadable product for landfilling; or to several months if the solids are to be used in agriculture. B) For pre-dried sludges from sludge drying beds destined for agricultural use: Further sun drying on open land within the FSTP premises (no further drying is required if the solids are to be landfilled). Co-composting. Plastic tarpaulins can be used for protection against heavy rain. The solids are safe for reuse in agriculture after approximately six months if accepted by farmers. Dewatered sludge can also directly be composted in special allocated landfills. For loading and transporting the dewatered sludge hired equipment will be suitable (loader and dumpers).

305 35 Supplementary Appendix F 3.6 Summary of Advantages and Disadvantages of the Alternatives Table 3.7 summarizes the advantages and disadvantages of the various treatment types which have been described earlier, by focusing on the needs of the Project. It gives already a pre-selection and only the alternatives which really have to be looked at closer will be further evaluated. Table 3.7: Summary of Advantages and Disadvantages of Treatment Types Treatment Type Advantages Disadvantages Remarks Aquatic Systems Stabilization Ponds Low capital cost Moderate O&M costs Low technical manpower requirement Requires large area of land May produce undesirable odors Suitable for the Project Aerated Lagoons Requires less land than Stabilization Ponds Produces few undesirable odors Requires mechanical devices and permanent electricity Needs trained O&M staff Not recommendable Constructed Wetlands Efficient treatment of TSS & bacteria Minimal capital and O&M cost Remains largely experimental Requires regular harvesting Suitable for the Project Terrestrial Systems Septic Tanks Can be used individually or communal Easy to operate Low treatment efficiency Needs maintenance and disposal of sludge Needs a further rehabilitation program Sludge Drying Beds Low investment cost and little land requirement High operation costs Needs regular operation Not very efficient during rainy season During dry season suitable; during the rainy season less efficient Landfill Low capital cost Needs suitable dumping area Risky for the environment Mechanical Systems Not recommendable Filtration Systems Needs little land; easy to operate; Mechanical devices needed Not recommendable for the Project Maintenance required Biological Reactors Highly efficient; requires little land; suitable for medium communities and urban centres High cost; complex technology, requires highly skilled operators; needs energy; needs much maintenance Unsuitable for the Project Activated Sludge Highly efficient; requires little land; suitable for medium communities and urban centers High cost; complex technology, requires highly skilled operators; needs energy; needs much maintenance Unsuitable for the Project

306 36 Supplementary Appendix F Conventional technologies such as extended aeration, digesters, mechanically stirred sludge thickeners, centrifuges, belt presses, and vacuum filter presses, will not be selected due to their high degree of mechanization, and hence, sophistication, which requires high expenses for operation and maintenance and high workers skills. It would be difficult to satisfy these requirements. The high investment and operating costs for such technologies are only justified for large-scale plants in big cities with high costs for land. Consequently, the following treatment types have to be eliminated: Aerated lagoons. Filtration systems. Biological reactors (including digesters). Activated sludge. Co-treatment with sewage or sewage sludge does not exist and therefore can be also singled out as a feasible option. Feasible Treatment Options. Since the treatment is based on the septage of emptied septic tanks only two technologies are considered being potentially feasible: stabilization ponds, constructed wetlands. It needs to be stated that since the properties of the septage is not known, it is not clear whether the two alternatives need to have further stages in their treatment trains like lime stabilization, for example. This can be evaluated during the next phase of the project (detailed design). 3.7 Dimensioning of Selected Design Alternatives Since the situation is similar in all four communities the comparison and selection of alternatives was done on a pilot design based on the first data set of Legazpi. For the final outline design the data were adjusted to the latest information and environmental requirements of each community (see Main Report Chapter 3.3) Alternative 1 Waste Stabilization Ponds The most important design parameters are temperature, evaporation, flow and the BOD demand. Out of those parameters the loading and retention time is determined. Anaerobic ponds can be satisfactorily designed, and without risk of odor nuisance, on the basis of volumetric BOD loading (lv, g/m3d), which is given by: where L i = influent BOD, mg/l (= g/m 3 ) Q = flow, m 3 /d V a = anaerobic pond volume, m 3 λv = L i Q / V a The Volumetric BOD Loading (λv) is calculated according to the formula of Mara with: λv = [300(T-12)/18]+100 where T is the monthly average minimum temperature which is inserted in the formula as 25 C (January high = 28, low = 22 ) (Figure 3.11).

307 37 Supplementary Appendix F Figure 3.11: Monthly Temperatures at Legazpi The daily maximum evaporation can be taken with 4mm and the rainfall with 500mm monthly. With the formulas above, the design of anaerobic ponds is described in the following sections. The anaerobic treatment will be divided into two separate units. This is necessary due to operation and maintenance reasons. Normally, anaerobic ponds have as access for emptying on a ramp which the equipment can enter and take out the dewatered sludge. For small plants it is unfeasible to construct such long ramps into the deep ponds. Therefore rectangular tanks are being used. In the case of septage, which already contains a high percentage of demineralised sludge it is much easier to fill the sludge into shallow tanks than to use deep tanks or ponds. Later, the dewatered sludge can be taken to the storage area. Consequently two different calculations are required. The dimensions of the settling tanks are basically calculated by the selected batch operation. The height of filling per day is chosen with 30cm daily. Therefore the area needs to be calculated. The unit will be loaded during 5 working days, then the next unit will be filled. Having 4 units, the first unit needs to be back into operation on the 29 th day. For emptying the maximum design load of 160m³ of consolidated and dried sludge one working day is needed. This results in 27 days of retention time for the sludge to thicken (Table 3.8). Table 3.8: Design Values for Pre-treatment Alternative 1 Alternative 1, Option 1 (Anaerobic Settling Tanks) Design Parameter Calculated Design Value Remarks Length (m) 20 selected Width (m) 8 selected Number of units 4 Batch loading possible Area (m²) of ponds 640 Area (m²) of ponds + access 1,152 Operation space required Detention Time (days) 27 Volumetric BOD Loading (λv) (g/m³/d) BOD loadings l v should not be less than 100 g/m 3 /d in order to maintain anaerobic conditions Surface Loading (kg BOD/ha/d) 2,219 Within normal range of 3,000 BOD inflow 3,800 BOD outflow 1,900 Equals to 50% removal Bacterial concentration in effluent 1.00E+08

308 38 Supplementary Appendix F (FC/100ml) Alternative 1, Option 2 (Anaerobic Ponds) Design Parameter Calculated Design Value Remarks Length (m) 20 selected Width (m) 8 selected Number of units 3 Batch loading possible Area (m²) of ponds 480 Area (m²) of ponds + access 960 Operation space required Detention Time (days) 24.4 Volumetric BOD Loading (λv) (g/m³/d) Surface Loading (kg BOD/ha/d) 2,959 Within normal range of 3,000 BOD inflow 3,800 BOD outflow 1,520 Equals to 60% removal The facultative ponds are calculated with a similar formula as the aerobic ponds (Table 3.9), namely: where Af = facultative pond area (m 2 ) Li Q = quantity of BOD, g/ day λv as described above. A f = 10 L i Q/ l s Table 3.9: Design Values for Facultative Ponds Alternative 1 Option 1 Facultative Ponds Design Parameter Calculated Remarks Design Value Length at bottom (m) Width at bottom (m) 9.75 Length at top (m) Width at top (m) Number of units 2 Area (m²) of ponds 1, Area (m²) of ponds + access 1, Operation space required Detention Time (days) 24.6 Surface Loading (kg BOD/ha/d) 219 BOD inflow 1,330 BOD outflow 171 Equals to 96% cumulative removal Option 2 Facultative Ponds Design Parameter Calculated Remarks Design Value Length at bottom (m) Width at bottom (m) 6.75 Length at top (m) Width at top (m) Number of units 2 Area (m²) of ponds 1, Area (m²) of ponds + access 2, Operation space required Detention Time (days) 30.4 Surface Loading (kg BOD/ha/d) 219 BOD inflow 2,280 BOD outflow 1,368 Equals to 88% cumulative removal

309 39 Supplementary Appendix F Maturation Ponds. The number and size of maturation ponds in a system depend upon the bacteriological quality required of the effluent (Table 3.10). The number of faecal coliform bacteria per 100 ml of the effluent (Be) can be estimated by the following equation: K B(T) = 2.6*(1.19)T-20 where K B(T) = First order FC removal rate constant in T C per d ay. The number of faecal coliforms in the effluent from the last pond of the series can be found from the following equation: Be=Bi/(1+ K B(T) * a) * (1+ K B(T) * f) * (1+ K B(T) * m) n where t*a, t*f and t*m are the detention times of the anaerobic, facultative and maturation ponds respectively and n is the number of maturation units in the series. Table 3.10: Design Values for Maturation Ponds Alternative 1 Option 1 Maturation Ponds Design Parameter Calculated Remarks Design Value Length at bottom (m) Width at bottom (m) Length at top (m) Width at top (m) Number of units 2 Batch loading possible Area (m²) of ponds Area (m²) of ponds + access 1, Operation space required Detention Time (days) 38.9 Surface Loading (kg BOD/ha/d) 52 Within normal range of 3,000 BOD inflow 171 BOD outflow 34 Equals to 80% removal Bacterial concentration in effluent (FC/100ml) 18.6 Option 2 Maturation Ponds Design Parameter Calculated Remarks Design Value Length at bottom (m) Width at bottom (m) Length at top (m) Width at top (m) Number of units 2 Area (m²) of ponds 1, Area (m²) of ponds + access 2, Operation space required Detention Time (days) 30 Surface Loading (kg BOD/ha/d) 139 BOD inflow 456 BOD outflow 91 Equals to 97.6% cumulative removal Bacterial concentration in effluent (FC/100ml) 18.6

310 40 Supplementary Appendix F Alternative 2 Constructed Wetland Systems (i) Design Considerations & Dimensioning Constructed wetland systems cannot be fed with raw sewage or even with sludge originating from septic tanks since the BOD and TSS values are far too high, particularly from the septage. This would destroy the filters and the plants within a short time. Therefore pretreatment needs to be done before using a constructed wetland system. As only low-cost treatment is being considered the same pre-treatment will be used as proposed in the alternative for waste stabilization ponds. The settling tanks and the anaerobic ponds remain the same as calculated before for the pond system. A constructed wetland can be built almost everywhere; however, the underlying soil permeability must be considered. The desirable soil permeability should be 10-5 to 10-7 m/s. Sandy clays and silty clay loams can be suitable when compacted. Permeable soils need to receive a lining. In heavy clay soils addition of moss or top soil will improve the soil and accelerate initial plant growth. The performance of constructed wetland systems depends upon the system hydrology as well as other factors like precipitation, infiltration, evapo-transpiration, hydraulic loading rate and water depth. All those can effect the removal of organics, nutrients and trace elements not only by changing the detention time, but also by either concentrating or diluting the treated wastewater. For a constructed wetland, the water balance can be expressed as follows: where, Qi Qo + P ET = [dv7dt] Qi = influent wastewater flow, volume/time, Qo = effluent wastewater flow, volume/time, P = precipitation, volume/time, ET = evapotranspiration, volume/time, V = volume of water, and t = time (Infiltration is excluded because of the impermeable barrier.) A hydrological study should be done before any detailed design of a constructed wetland system treatment. Such hydrological study should include the aspects of evapo-transpiration, infiltration and any possible seasonal change of the groundwater table (or flood pattern). This is necessary since the constructed wetlands need to be dimensioned for the rainy season. During dry months the effluent of constructed wetlands might be zero. A water balance model is used to determine reed bed evapo-transpiration (Figure 3.12). The organic loading should be distributed over a significant portion of the area. The design water depth should be 60cm or less to ensure adequate oxygen distribution. It is recommended that the planting media not exceed 20 mm in diameter, and the minimum depth should be 100 mm (Table 3.11). The media in the inlet and outlet zones should be between 40 and 80 mm in diameter to minimize clogging and should extend from the top to the bottom of the system. The inlet zone should be about 2 m long and the outlet zone should be about 1 m long. These zones with larger media will help to even distribute or collect the flow without clogging. The use of gabions simplifies construction. Gabions may also make it easier to remove and clean the inlet zone media if it becomes clogged. It is recommended that the average diameter of the treatment zone media be between 20

311 41 Supplementary Appendix F and 30 mm in diameter as a compromise between the potential for clogging and ease of handling. The hydraulic conductivity of the mm diameter clean media is assumed to be 100,000 m/d. The top surface of the media should be level or nearly level for easier planting and routine maintenance. The inlet shall slope gradually towards the outlet (1/2 to 1% is recommended) for ease of construction and proper draining (Chalk & Wheale, 1989). Figure 3.12: Water Balance Model Table 3.11: Recommended Design Parameters Treatment component Details Remarks Bed slope 1:10 to 1:4 Side slope 1:1 to 1:2 Drainage system Hollow concrete blocks or perforated pipes Depending on drainage system and dimensions of the con-structed wetlands Subjected to soil stability of each site Subjected to the wetland dimensions and length of percolate from one end to the outlet Substrata Vegetation Freeboard Feeding system Pre-treatment Plant acclimatization Ventilation pipes Large gravel (dia. = 5 45 cm; Medium gravel (dia. = 2 15 cm; Sand (dia. = cm Cattails, reeds or bulrushes Similar size to the drainage pipe and valve Subjected to length of plant roots, e.g. cattails = cm Preferable indigenous species to the wetland site m For dewatered sludge accumulation for 4 5 years Uniform distribution in the middle of wetland units Coarse bar screen, settling tanks & anaerobic pond Startup with plant density of 8 10 shoots m². Apply domestic waste-water Due to the high biological loading rate of the septage pre-treatment is necessary Rainy season is recommended

312 42 Supplementary Appendix F Treatment component Details Remarks Plant harvesting Post-treatment and gradually feeding septage until the plant height of 2 2.5m Once to twice a year Discharge into receiving waters; Land application Depending on plant wilting symptoms Depending on land area availability and effluent quality standards The slope of the berms containing a VSB should be as steep as possible, consistent with the soils, construction methods and materials. Shallow side slopes create larger areas which capture and route precipitation into the VSB, which may be detrimental to system performance. The site should be graded to keep off-site runoff out of the VSB. The inlet and outlet piping must avoid any short-circuiting and clogging in the media, and maximize even flow distribution. The inlet and outlet piping should be designed to allow for inspection and clean-out by the operator and the outlet piping shall allow the operator to vary the operating water level and drain the bed. The adjustable device for controlling the water level should allow the operator to flood the VSB to a depth of 50 m above the surface of the media and to draw-down or drain the cell for maintenance. Typical average media depths in VSB systems are ranged from 0.4 to 0.6 m. The design maximum water depth (at the inlet) should be 0.40 m. The depth of the media will be defined by the level of the wastewater at the inlet and should be about 0.1 m deeper than the water. The width of a individual VSB is set by the ability of the inlet and outlet structures to uniformly distribute and collect the flow without inducing short-circuiting. The recommended maximum width is 61 m. If the design produces a larger value, the VSB should be divided into several cells that do not exceed 61 m in width. The recommend minimum lengths should not be smaller than 12 to 30 m to prevent short-circuiting. Based on the above mentioned design considerations the design has two basic assumptions. First, the total VSB has four zones. The inlet and outlet zones, the initial treatment zone (about 30% of the total area) and the final treatment zone (about 70% of the area). The second basic assumption is that Darcy s Law, while not exact, it is good enough for design purposes. The sizing of the treatment zones follows the steps shown in Tables 3.12 and Table 3.12: Design Values for Pre-Treatment of Alternative 2 Alternative 2 (Settling Tanks) Design Parameter Calculated Design Remarks Value Length (m) 20 Width (m) 8 Number of units 4 Batch loading possible Area (m²) of 640 Area (m²) of ponds + access 1,900 Operation space required Detention Time (days) 27.1 Volumetric BOD Loading (λv) (g/m³/d) Surface Loading (kg BOD/ha/d) 2,219 Within normal range of 3,000 BOD inflow 3,800 BOD outflow 1,900 Equals to 50% removal

313 43 Supplementary Appendix F Alternative 2 (Anaerobic Ponds) Design Parameter Calculated Remarks Design Value Length (m) selected Width (m) Number of units 2 Batch loading possible Area (m²) of ponds 1, Area (m²) of ponds + access 1, Operation space required Detention Time (days) 19.4 Volumetric BOD Loading (λv) (g/m³/d) Surface Loading (kg BOD/ha/d) 2,219 Within normal range of 3,000 BOD inflow 1,900 BOD outflow 570 Equals to 85% cumulative removal Table 3.13: Design Values for Constructed Wetlands, Alternative 2 Calculation for Constructed Wetlands Flow of supernatant (Q) 37 m³/d BOD 570 mg/l TSS 10,800 mg/l Required discharge limits BOD = 100 mg/l Recommended value for vssf (ALR for BOD) 6 g/m²/d Recommended value for vssf (ALR for TSS) 20 g/m²/d Washed rounded media mm dia. K= 100,000 m/d Hydraulic conductivity of initial zone K I = 1,000 m/d Hydraulic conductivity of final zone K f = 10,000 m/d Bottom slope (s) = % Design water depth at inlet (D wo ) = 0.4 m Design water depth at beginning of final zone (D wf ) = 0.4 m Design media depth (D m ) = 0.6 m Allowable headloss through initial zone (dh i ) = 0.06 m Determination of Surface Area for BOD & TSS For BOD, A S = 3,551 m² For TSS, A S = 20,184 m² use the larger requirement 20,184 m² Surface area of initial zone A si 6,055 m² Surface area of final zone A sf 14,129 m² Determination of Width Q = (K i )(W)(D w0 )(dh i /L i ); where L i = (A si ) / (W) respectively W 2 = (Q)(A si ) / (K i )(dh i )(D w0 ) The width must be bigger than (W) Selected (W) m m m

314 44 Supplementary Appendix F 3.8 Cost Analysis General For investment and O&M cost the following factors play a role: Economic indicators (land price, gasoline prices, etc.). Site conditions. Choice of construction material. Haulage distances and traffic conditions. Plant size. Legal discharge standards Haulage Costs for Septage As stipulated before the haulage costs are basically a function of the time requirements (distance between the point of loading to the point of off loading, the frequency of emptying) the generated volume and the running costs as well as the depreciation of the equipment. For all alternatives the haulage cost will be identical Alternative 1 Option 1 (Settlement Tanks with Ponds) Table 3.14: Capital Costs Alternative 1, Option 1 Estimation of capital costs for Alternative 1 Option 1 Dumaguete is taken as referential price: Number of septage tanks 23,000 No Number of people served by septage tank 5 c Number of people connected to the septage system 115,000 c Construction of Septage Treatment Plant 12,000,000 P Percentage due to price escalation and inflation 20 % Price ratio for Legaspi due to actual prices 14,400,000 P Consumers served in Legaspi 224,270 c Subtotal 28,082,504 P Extra over for reinforced concrete tanks with ramp 760,000 P Estimated Price for new STP 28,842,504 P Say 29,000,000 P Table 3.15: Annual Operational Costs Alternative 1, Option 1 Annual Operational Costs Depreciation of equipment Diesel, oil & lubricants Insurances etc. Salaries Water analysis and testing Overheads & Management Total Operational Costs say 406,285 P 314,145 P 20,000 P 78,624 P 50,000 P 15,725 P 884,779 P 900,000 P

315 45 Supplementary Appendix F Alternative 1 Option 2 (Wastewater Stabilization Ponds) Table 3.16: Capital Costs Alternative 1, Option 2 Estimation of capital costs for Alternative 1 Option 2 Dumaguete is taken as referential price: Number of septage tanks 23,000 No Number of people served by septage tank 5 c Number of people connected to the septage system 115,000 c Construction of Septage Treatment Plant 12,000,000 P Percentage due to price escalation and inflation 20 % Price ratio for Legaspi due to actual prices 14,400,000 P Consumers served in Legaspi 224,270 c Subtotal 28,082,504 P Extra for 100m² additional 355,000 P Estimated Price for Legaspi STP 28,437,504 P Extra over for reinforced concrete 570,000 P Say 29,070,000 Table 3.17: Annual Operational Costs Alternative 1, Option 2 Operational Costs Rented equipment for desludging Salaries Water analysis and testing Overheads & Management Total Operational Costs say 67,000 P 78,624 P 50,000 P 15,725 P 211,349 P 250,000 P The operational costs are in comparison with all other alternatives very low. This is due to the fact that desludging of the anaerobic ponds takes place only 1-2 times a year and therefore hired equipment can be used Alternative 2 (Constructed wetlands) Table 3.18: Capital Costs Alternative 2 Estimation of capital costs for Alternative 2 Area of constructed wetland ha Average cost per ha 8,058,000 P Cost for wetlands 14,689,734 P Area of ponds 2,203 m² Cost per m² 3,550 P Cost for ponds 7,820,650 P Total costs 22,510,384 P

316 46 Supplementary Appendix F Table 3.19 Annual Operational Costs Alternative 2 Annual Operational Costs Depreciation of equipment Diesel, oil & lubricants Insurances etc. Salaries Water analysis and testing Overheads & Management Total Operational Costs say 270,855 P 118,170 P 20,000 P 78,624 P 50,000 P 15,725 P 553,374 P 600,000 P Comparison of Alternatives (i) Comparison of Costs Capital Cost Collection Annual O& M Costs Collection Capital Cost Treatment Table 3.20: Cost Comparison of Alternatives Alternative 1, Option 1 (WSP with settling Tanks) Alternative 1, Option 2 (WSP) Alternative 2 (Constructed Wetlands) 4,360,800 4,360,800 4,360,800 1,324,025 1,324,025 1,324,025 29,000,000 29,070,000 22,510,384 (ii) Comparison of Area and Effluent Three alternatives have been calculated, and the results are listed in Table It is evident that from the calculation the constructed wetlands (Alternative 2) has the least positive result in quality of effluent and land requirements. Consequently, this alternative cannot be recommended. Alternative Table 3.21: Comparison of Alternatives Alternative 1, Option 1 (WSP with settling Tanks) Alternative 1, Option 2 (WSP) Alternative 2 (Constructed Wetlands) Required Area (m²) BOD of Effluent 6, , ,

317 47 Supplementary Appendix F 3.9 Selection of Treatment Options Selection Criteria Criteria for the selection of project relevant treatment options has been taken as follows: 1) Area required for the treatment process. 2) Capital costs of the treatment facilities. 3) Operation & maintenance costs. 4) System robustness and flexibility (fluctuations in the quantity and quality of septage). 5) Long term design criteria and data available. 6) Treatment efficiency. 7) Ease of construction (experience of local contractors). 8) Ease in O&M (skill of staff, time input of staff). 9) Energy requirements of treatment process. 10) Usability of by-products. 11) Environmental and health implications Scoring System In order to come to a well founded decision of which alternative is finally the best a relative rating scale is applied to the selection criteria (Table 3.22). As rating scale the following is used for high to low performance: Excellent (5) Good (4) Average (3) Satisfactory (2) Bad (1) Very Bad (0). Table 3.22: Decision Matrix Selection Criteria Alternative 1 Option 1 Alternative 1 Option 2 Alternative 2 Land requirement Capital costs Operation & maintenance costs System robustness and flexibility Long term technology Treatment efficiency Ease of construction Ease in O&M Energy requirements Usability of by-products Environmental and health implications Total Score

318 48 Supplementary Appendix F Selection of the Best Alternative The best alternative for Legazpi is Alternative 1, Option 2, which is a conventional wastewater stabilization pond system. Because the anaerobic ponds are big and can store the sludge, the operational costs are substantially lower. Further, the technology has been working in developing countries for several decades, and there is ample design knowledge. Consequently the outline design will be detailed like Alternative 1 for each community.

319 49 Supplementary Appendix F ATTACHMENT 2: SEPTAGE CALCULATION SHEETS CALCULATION OF SUBSURFACE FLOW SYSTEM FOR CONSTRUCTED WETLANDS Calculation in accordance with the EPA Manual for "Constructed Wetlands Treatment of Municipal Wastewaters" Alternative with pre-treatment Design Parameters Design Horizon 2010 Design Horizon 2025 General Input Data: Average Temperature 25 ºC 25 ºC Total Organic Load BOD (B) kg/d kg/d Total Influent BOD Concentration (Li) 3,800 mg/l 3,800 mg/l Volumetric BOD Loading (λv) g/m³/d g/m³/d Influent Bacterial Concentration (Bi) 1.00E+08 FC/100ml 1.00E+08 FC/100ml Calculation for batch operated Settling Tanks Number of settling tanks selected 4 No 4 No Selected loading cycle for one tank (=retention period) 28 days 28 days Attainable thickening concentration of sludge (~ 14 %) 4.2 m³/d 5.2 m³/d Thickened sludge accumulation during one day 25.8 m³/d 32.1 m³/d Volume to be stored during one cycle m³ m³ Depth of thickening zone 1.5 m 1.5 m Required Area of tanks m² m² Width 8.0 m 8.0 m Length 20.0 m 20.0 m Effective area of tanks m² m² Expected removal rate of BOD (and COD) 50.0 % 50.0 % BOD Removal in Settling Tank 1,900.0 mg/l 1,900.0 mg/l Surface loading kg 2,219 BOD/ha/d kg 2,219 BOD/ha/d Max. Average monthly rainfall in Legazpi 500 mm/month 500 mm/month Max, average daily evaporation in Legazpi 4 mm/d 4 mm/d Stormwater to be added for each day of detention 2.0 m³/d 2.0 m³/d Area required for access m² m² Total area m² 1,152.0 m² Detention Time (ta) 34.5 days 27.1 days Calculation for Anaerobic Ponds Total Influent BOD Concentration (Li) 1,900 mg/l 1,900 mg/l Volumetric BOD Loading (λv) g/m³/d g/m³/d Required Volume of Anaerobic Pond (Va) 181 m³ 225 m³ Depth 2.5 m 2.5 m Choosen 2 ponds in parallel

320 50 Supplementary Appendix F Embankment slope (n) 3.00 m Freeboard (F) 0.60 m Width (W) selected m Width at bottom elevation 2.50 m Length (L); between 2-3 times W m Length at bottom elevation m Length at TWL m Width at TWL 6.25 m Surface area at TWL m² Calculated area of Anaerobic Pond m² Length at top of embankment m Width at top of embankment m Surface area at top of embankment for one pond 1, m² Additional area for access m² Total area of Anaerobic Pond 1, m² Volume of AnaerobicPonds m³ Geometric dimensions equal to design horizon 2025 Stormwater to be added for each day of detention 1.5 m³ Detention Time (tf) 23.8 days 19.4 days Percent BOD Removal 70 % 70 % BOD Removal in Anaerobic Pond 1,330 mg/l 1,330 mg/l Surface loading kg 2,432 BOD/ha/d 3,030 Cumulative BOD Removal of Anaerobic Pond & Settling Tank 3,230 mg/l 3,230 mg/l Cumulative BOD Removal of Anaerobic Pond & Settling Tank 85 % 85 % BOD remaining for wetlands 570 mg/l 570 mg/l TSS remaining for wetlands (=15% of influent) 10,800 mg/l 10,800 mg/l kg BOD/ha/d Calculation for Constructed Wetlands Flow of supernatant (Q) 30 m³/d 37 m³/d BOD 570 mg/l 570 mg/l TSS 10,800 mg/l 10,800 mg/l Required discharge limits BOD = 100 mg/l 100 mg/l Recommended value for vssf (ALR for BOD) 6 g/m²/d 6 g/m²/d Recommended value for vssf (ALR for TSS) 20 g/m²/d 20 g/m²/d Washed rounded media mm dia. K= 100,000 m/d 100,000 m/d Hydraulic conductivity of initial zone K I = 1,000 m/d 1,000 m/d Hydraulic conductivity of final zone K f = 10,000 m/d 10,000 m/d Bottom slope (s) = % % Design water depth at inlet (D wo ) = 0.4 m 0.4 m Design water depth at beginning of final zone (D wf ) = 0.4 m 0.4 m Design media depth (D m ) = 0.6 m 0.6 m Allowable headloss through initial zone (dh i ) = 0.06 m 0.06 m Determination of Surface Area for BOD & TSS For BOD, A S = 2,850 m² 3,551 m²

321 51 Supplementary Appendix F For TSS, A S = 16,200 m² 20,184 m² use the larger requirement 16,200 m² 20,184 m² Surface area of initial zone A si 4,860 m² 6,055 m² Surface area of final zone A sf 11,340 m² 14,129 m² Determination of Width Q = (K i )(W)(D w0 )(dh i /L i ); where L i = (A si ) / (W) respectively W 2 = (Q)(A si ) / (K i )(dh i )(D w0 ) m m The width must be bigger than (W) m m Selected (W) m Determination of Length and Headloss of the Initial Zone L i = (A si ) / (W) = 62 m 62 m the length shall be equal or less than 62 m 62 m Selected L i 12 m 12 m dh i = (Q)(L i ) / (K i )(W)(D w0 ) = m m Determination of Length and Headloss of the Initial Zone L f = (A sf ) / (W) = 145 m 145 m the length shall be equal or greater than 145 m 145 m Selected L f 150 m 150 m dh f = (Q)(L f ) / (K f )(W)(D wf ) = m m Determination of Bottom Elevations Bottom elevation at outlet E be = 0 (reference point) 0 m 0 m Bottom elev. at start of final treatment zone E bf = 0.75 m 0.75 m Bottom elevation at inlet E bo = 0.81 m 0.81 m Determination of Water Surface Elevations Water surface at start of final treatment zone E wf = 1.15 m 1.15 m Water surface at outlet E we = m m Water surface at inlet E wo = m m

322 52 Supplementary Appendix F Determination of Water Depth Water depth at inlet D w0 = 0.40 m 0.40 m Water depth at start of final treatment zone inlet D wf = 0.4 m 0.4 m Water depth at outlet D we = m m Determination of Media Depth Selected: a level surface in vssf basin Highest Water Level at Inlet m m Media elevation to be set higher, namely at 1.30 m 1.30 m Depth of media at inlet D m0 = 0.49 m 0.49 m Depth of media at start of final treatment zone D mf = m m Depth of media at outlet D me = 1.30 m 1.30 m Depth-to-water at inlet D tw0 = 0.09 m 0.09 m Depth-to-water at start of final treatment zone D twf = 0.15 m 0.15 m Depth-to-water at outlet D twe = m m Determination of Land Requirement a) For Constructed Wetlands Length of Inlet Zone 2.00 m 2.00 m Length of Zone m m Length of Zone m m Length of Outlet Zone 1.00 m 1.00 m Total Length m m Selected: Three Cells each with 33.50m and 5m between Total Width m m Area for CW Cells 18, m² 18, m² Additional Area for Access and sludge storing 2, m² 2, m² Total Land required for Constructed Wetlands = 20, m² 20, m² b) For Settling Tanks Land Requirement = m² 1,152.0 m² c) For Anaerobic Ponds Land Requirement = 1, m² 1, m² TOTAL Total Land Requirement a +b +c 22, m² 23, m² The plot area should have a size of 2.3 ha

323 53 Supplementary Appendix F CALCULATION OF LAND REQUIREMENTS FOR SLUDGE DRYING BEDS Description Design Horizon 2010 Design Horizon 2025 Calculation for Sludge Drying Beds Sludge dying period during dry season 15 days 15 days Volume of sludge to be filled 450 m³ 561 m³ Selected loading cycle for one tank (=retention period) 15.0 days 15.0 days Attainable thickening concentration of sludge (~ 70 %) 21.0 m³/d 26.2 m³/d Thickened sludge accumulation during one day 9.0 m³/d 11.2 m³/d Max. Height of layer 0.30 m³ 0.30 m³ Area required 450 m² 561 m² Number of sludge drying beds 6 No 6 No Length 7 m 7 m Width 16 m 16 m effective area 672 m² 672 m² Days required to fill up one bed 3.73 days 3.00 days Total area including acess 1,013 m² 1,013 m² Calculation for Facultative Ponds Max. Average monthly rainfall in Legazpi 500 mm/month 500 mm/month Max, average daily evaporation in Legazpi 4 mm/d 4 mm/d Percentage of Percolate from influent 70 % 70 % Percolate per day 21 m³ 26 m³ Influent Bacterial Concentration (Bi) 1.00E+08 FC/100ml 1.00E+08 FC/100ml BOD Loading for Facultative Ponds (assumed) 1,520 mg/l 1,520 mg/l Surface BOD Loading (λs) 440 kg/ha/d 440 kg/ha/d Depth of water 1.50 m 1.50 m Number of parallel ponds 2 No 2 No Embankment slope (n) 3.00 m Freeboard (F) 0.60 m Width (W) selected 8.00 m Width at bottom elevation 3.50 m Length (L); between 2-3 times W m Length at bottom elevation m Length at TWL m Width at TWL 5.75 m Surface area at TWL m² Length at top of embankment m Width at top of embankment m Surface area at top of embankment 1, m² Additional area for access m² Total area for Facultative Ponds 1, m² Volume of Facultative Ponds m³ Geometric dimensions equal to design horizon 2025 Stormwater to be added for each day of detention 3.3 m³ Detention Time (tf) 32.9 days 27.1 days Percent BOD Removal 70 % 70 % BOD Removal in Facultative Ponds 1,064 mg/l 1,064 mg/l Surface loading kg 871 BOD/ha/d 1,086 kg BOD/ha/d Cumul.BOD Removal of Anaerobic & Facultative Ponds 3,344 mg/l 3,344 mg/l Remaining BOD Removal for Maturation Pond 456 mg/l 456 mg/l

324 54 Supplementary Appendix F Calculation of Maturation Ponds Percent BOD Removal 80 % 80 % BOD Removal in Maturation Ponds mg/l mg/l Effluent BOD of Plant 91 mg/l 91 mg/l FC removal rate (k T ) constant TºC (25 C) per day 6.20 K B(T) 6.20 K B(T) each with a detention time of 20 days 20 days Bacterial concentration in effluent of Maturation Pond 41.4 FC/100ml 50.2 FC/100ml Number of Maturation Ponds 2 No. 2 No. Volume of Maturation Ponds m³ m³ Depth of water 1 m 1 m Number of parallel ponds 2 No 2 No Embankment slope (n) 3.00 m Freeboard (F) 0.60 m Width (W) selected 8.00 m Width at bottom elevation 5.00 m Length (L); between 2-3 times W m Length at bottom elevation m Length at TWL m Width at TWL 6.50 m Surface area at TWL m² Length at top of embankment m Width at top of embankment m Surface area at top of embankment m² Additional area for access m² Total area for Maturation Ponds 1, m² Volume of Maturation Ponds m³ Geometric dimensions equal to design horizon 2025 Stormwater to be added for each day of detention 3.9 m³ Surface loading kg 358 BOD/ha/d 446 kg BOD/ha/d Detention Time (tf) 21.4 days 17.7 days Total area required Area required for the Wastewater Stabilization Ponds 3,996 m² 3,996 m² Additional storage area for 6 months stockpile 824 m² 1,026 m² Total Area for Sludge Drying Beds 5,022 m² say: 0.6 ha

325 55 Supplementary Appendix F CALCULATION OF WASTEWATER STABILIZATION PONDS Design Horizon 2010 Design Horizon 2025 Average Temperature 25 ºC 25 ºC Total Organic Load BOD (B) kg/d kg/d Total Influent BOD Concentration (Li) 3,800 mg/l 3,800 mg/l Volumetric BOD Loading (λv) g/m³/d g/m³/d Influent Bacterial Concentration (Bi) 1.00E+08 FC/100ml 1.00E+08 FC/100ml Calculation for batch operated Settling Tanks Number of settling tanks selected 4 No 4 No Selected loading cycle for one tank (=retention period) 28 days 28 days Attainable thickening concentration of sludge (~ 14 %) 4.2 m³/d 5.2 m³/d Thickened sludge accumulation during one day 25.8 m³/d 32.1 m³/d Volume to be stored during one cycle m³ m³ Depth of thickening zone 1.5 m 1.5 m Required Area of tanks m² m² Width 11.0 m 8.0 m Length 28.0 m 20.0 m Effective area of tanks 1,232.0 m² m² Expected removal rate of BOD (and COD) 50.0 % 50.0 % BOD Removal in Settling Tank 1,900.0 mg/l 1,900.0 mg/l Surface loading kg 1,153 BOD/ha/d 2,219 kg BOD/ha/d Max. Average monthly rainfall in Legazpi 500 mm/month 500 mm/month Max, average daily evaporation in Legazpi 4 mm/d 4 mm/d Stormwater to be added for each day of detention 3.9 m³/d 2.0 m³/d Area required for access m² m² Total area 1,505.0 m² 1,152.0 m² Detention Time (ta) days 27.1 days Calculation for Anaerobic Ponds Total Influent BOD Concentration (Li) 1,900 mg/l 1,900 mg/l Volumetric BOD Loading (λv) g/m³/d g/m³/d Required Volume of Anaerobic Pond (Va) 181 m³ 225 m³ Depth 2.5 m 2.5 m Choosen 2 ponds in parallel Embankment slope (n) Freeboard (F) Width (W) selected Geometr ic dimensi ons equal to design horizon m 0.60 m m

326 56 Supplementary Appendix F Width at bottom elevation 2.50 m Length (L); between 2-3 times W m Length at bottom elevation m Length at TWL m Width at TWL 6.25 m Surface area at TWL m² Calculated area of Anaerobic Pond m² Length at top of embankment m Width at top of embankment m Surface area at top of embankment for one pond m² Additional area for access m² Total area of Anaerobic Pond 1, m² Volume of AnaerobicPonds m³ Stormwater to be added for each day of detention 1.5 m³ Detention Time (tf) 23.8 days 19.4 days Percent BOD Removal 70 % 70 % BOD Removal in Anaerobic Pond 1,330 mg/l 1,330 mg/l Surface loading kg 2,432 BOD/ha/d 3,030 kg BOD/ha/d Cumulative BOD Removal of Anaerobic Pond & Settling Tank 3,230 mg/l 3,230 mg/l Cumulative BOD Removal of Anaerobic Pond & Settling Tank 85 % 85 % Calculation for Facultative Ponds Surface BOD Loading (λs) 440 kg/ha/d 440 kg/ha/d BOD Removal remaining for Facultative Ponds (Li) 570 mg/l 570 mg/l Required surface area at TWL for Facultative Ponds m² m² Depth of water 1.75 m 1.75 m Number of parallel ponds 1 No 1 No Embankment slope (n) 3.00 m Freeboard (F) 0.60 m Width (W) selected m Width at bottom elevation 9.75 m Length (L); between 2-3 times W m Length at bottom elevation m Length at TWL m Width at TWL m Surface area at TWL m² Calculated area required for Facultative Pond m² Length at top of embankment m Width at top of embankment m Surface area at top of embankment for one pond 1, m² Total area of Facultative pond 1, m² Additional area for access m² Total area for Facultative Ponds 1, m² Volume of Facultative Ponds 1, m³ Stormwater to be added for each day of detention 6.2 m³ Detention Time (tf) 28.6 days 24.6 days Percent BOD Removal 70 % 70 % BOD Removal in Facultative Ponds 399 mg/l 399 mg/l kg Surface loading 175 BOD/ha/d 219 kg BOD/ha/d Cumulative BOD Removal of Anaerobic & Facultative Ponds 3,629 mg/l 3,629 mg/l Cumulative BOD Removal of Anaerobic & Facultative Ponds 96 % 96 % Geometric dimensions equal to design horizon 2025

327 57 Supplementary Appendix F Calculation of Maturation Ponds BOD Removal remaining for Maturation Ponds (Li) 171 mg/l 171 mg/l Percent BOD Removal 80 % 80 % BOD Removal in Maturation Ponds mg/l mg/l Effluent BOD of Plant 34 mg/l 34 mg/l FC removal rate (k T ) constant TºC (25 C) per day 6.20 K B(T) 6.20 K B(T) each with a detention time of 10 days 10 days Bacterial concentration in effluent of Maturation Pond 0.0 FC/100ml 0.1 FC/100ml Number of Maturation Ponds 1 No. 1 No. Volume of Maturation Ponds 1, m³ 1, m³ Depth of water 1.2 m 1.2 m Number of parallel ponds 2 No 2 No Embankment slope (n) 3.00 m Freeboard (F) 0.60 m Width (W) selected m Width at bottom elevation m Length (L); between 2-3 times W m Length at bottom elevation m Length at TWL m Width at TWL m Surface area at TWL m² Calculated area required for each Maturation Pond 0.23 m² Length at top of embankment m Width at top of embankment m Surface area at top of embankment for one pond 1, m² Total area of maturation ponds 1, m² Additional area for access m² Total area for Maturation Ponds 1, m² Volume of maturation Ponds 1, m³ Stormwater to be added for each day of detention 6.2 m³ kg Surface loading 42 BOD/ha/d 52 kg BOD/ha/d Detention Time (tf) 47.2 days 38.9 days Area required for the Wastewater Stabilization Ponds 5,480 m² 5,480 m² Additional storage area for 6 months stockpile 824 m² 1,026 m² TOTAL AREA 6, m² 6, m² Geometric dimensions equal to design horizon 2025 The selected site should have approximately 0.7 ha

328 58 Supplementary Appendix F 4 ORIGINAL SANITATION COMPONENT DESIGN (AS IN DFR) 4.1 Rationale Although WDs are mandated under PD (Presidential Decree) 198 to provide sanitation services (wastewater collection and treatment services), this has not been attended to as the focus of WDs is more on the provision of water supply services. The sanitation component is left to the care of the local government. None of the pilot WDs has a sewerage system. Although PD 198 requires WDs to handle wastewater through sewerage system, this intervention has been neglected for quite some time due to its prohibitive cost. In the absence of a sewerage system, most domestic wastewater which includes excreta is collected by septic tanks. However, BOD contents in septic tanks are only partially removed (about a maximum of 60% 78 ). Thus, a significant proportion of BOD is left untreated. The PPTA consultation with communities and LGUs revealed that it is an accepted fact that there are septic tanks in the subproject areas with unsealed bases. This condition makes groundwater vulnerable to excreta pollution. Moreover, undesludged septic tanks become inefficient in treating excreta. The accumulation of sludge lessens the space and retention time needed for treatment. Consequently, untreated effluent goes out directly from the septic tank and flows to drainage going to bodies of water. The public s exposure to untreated effluent along the drainage as well as in the bodies of water is a health risk that should be addressed. Much worse is the presence of open defecation or direct disposal to bodies of water. Without addressing this concern, the exposure level to excreta contamination of vulnerable groups (i.e. poor, children, marginalized groups) will remain very high. The low priority given to sanitation will cumulatively increase the risk of disease outbreaks, while continuously posing a threat to the quality of water resources. Adopting a septage management program is an interim approach to address sanitation and water quality problems before a full sewerage system is attained. Investing in sanitation is a viable action. WHO (2007) estimated that for every $1 of investment in sanitation will give a return of $9. The study on economic impact of sanitation in the Philippines (World Bank, 2008) revealed the benefits on health, environment, tourism and costs saved from the effects of poor sanitation. Sanitation was a key theme advocated during the stakeholder consultation process, and four pilot water districts (Metro La Union, Quezon Metro, Legazpi City and City of Koronadal) and relevant LGUs expressed an interest in including a sanitation component in the project scope. The sanitation component will support the thrust of the Philippine Clean Water Act, Sanitation Code of the Philippines and the Philippine MDG (Millennium Development Goals) on sanitation. Metro La Union Water District. There is a need to address the problem of sanitation in San Fernando City and the other LGUs comprising the franchise area of the Metro La Union Water Disitrct (MLUWD). The low priority given to sanitation will cumulatively increase the 78 Philippine Sanitation Sourcebook and Decision Aid, World Bank, 2006

329 59 Supplementary Appendix F risk of disease outbreaks, while continuously posing a threat to the quality of water resources. Cognizant of the sanitation and environment issues, the local governments in La Union have enacted enabling policies that can regulate practices affecting the quality of the environment; these are as follows: Provincial Environmental Protection and Management Code of La Union Provincial Ordinance No. 007, series of San Fernando City Sanitation Code City Ordinance No Bacnotan Municipal Environment Code Municipal Ordinance No. 455, series of With the strong political will of the LGUs in Metro La Union WD to tackle sanitation and environment issues, donors and NGOs have provided assistance to the area. The Center for Advanced Professional Studies (CAPS), an NGO, has provided support in Fishermen s Village of San Fernando City for ecosan toilets. CAPS also helped the City and Bauang in preparing their sanitation plans. USAID has developed a project package on septage treatment using lime stabilization technology. This project is expected to commence in San Fernando City by October 2009 for 18 months duration. Rotary Club International is also providing a grant for sanitation in support of USAID assistance. To come up with an integrated approach on septage management, WDDSP will coordinate with USAID in dealing with septage in the City and nearby municipalities covered by the water district. The City Mayor expressed interest to host the septage treatment facility. The strong political will of addressing sanitation issues in Metro La Union has to be sustained. The increasing population and positive trend in economic growth warrant a continuous effort to meet sanitation needs. Missing this favourable opportunity of giving priority to sanitation will be an impending threat to the health of the people and will pose a hazard to the quality of water resources. Other Water Districts. There is a need to address the problem of sanitation in Metro Quezon Water District (QMWD), Legazpi City and Koronadal City. The low priority given to sanitation will cumulatively increase the risk of disease outbreaks, while continuously posing a threat to the quality of water resources. 4.2 Alternative Analysis In the selection of the appropriate system for treating septage, there were two steps used: (i) review of available technologies, and (ii) evaluation of short-listed alternatives. The first step reviewed all possible technologies (Table 4.1) and used the following criteria to determine alternatives: land availability and site conditions; buffer zone requirements; hauling distance; fuel costs; labour costs; costs of disposal; legal and regulatory requirements.

330 60 Supplementary Appendix F Table 4.1: Review of Available Septage Treatment Technologies Treatment Type Advantages Disadvantages Remarks Aquatic Systems Stabilization Ponds Low capital cost Moderate O&M costs Low technical manpower requirement Requires large area of land May produce undesirable odors Suitable for the Project Aerated Lagoons Requires less land than Stabilization Ponds Produces few undesirable odors Requires mechanical devices and permanent electricity Needs trained O&M staff Not recommendable Constructed Wetlands Efficient treatment of TSS & bacteria Minimal capital and O&M cost Remains largely experimental Requires regular harvesting Suitable for the Project Terrestrial Systems Septic Tanks Can be used individually or communal Easy to operate Low treatment efficiency Needs maintenance and disposal of sludge Needs a further rehabilitation program Sludge Drying Beds Low investment cost and little land requirement High operation costs Needs regular operation Not very efficient during rainy season During dry season suitable; during the rainy season less efficient Landfill Low capital cost Needs suitable dumping area Risky for the environment Mechanical Systems Not recommendable Filtration Systems Needs little land; easy to operate; Mechanical devices needed Not recommendable for the Project Maintenance required Biological Reactors Highly efficient; requires little land; suitable for medium communities and urban centers High cost; complex technology, requires highly skilled operators; needs energy; needs much maintenance Unsuitable for the Project Activated Sludge Highly efficient; requires little land; suitable for medium communities and urban centers High cost; complex technology, requires highly skilled operators; needs energy; needs much maintenance Unsuitable for the Project Based on the criteria, the PPTA short-listed the following treatment systems: Alternative 1: Stabilization ponds Option 1: With settling tanks/ anaerobic ponds Option 2: Without settling tanks/ anaerobic ponds Alternative 2: Constructed wetlands.

331 61 Supplementary Appendix F As a second step, another round of criteria was applied to select the best option, such as: Area required for the treatment process Capital costs of the treatment facilities Operation & maintenance costs System robustness and flexibility (fluctuations in the quantity and quality of septage) Long term design criteria and data available Treatment efficiency Ease of construction (experience of local contractors) Ease in O&M (skill of staff, time input of staff) Energy requirements of treatment process Usability of by-products Environmental and health implications Weighing all the advantages over the disadvantages, Alternative 1 Option 2 (stabilization ponds without settling tanks/ anaerobic ponds) was selected by the PPTA as the best alternative to be used in subproject areas. The designed settling tanks for the project have depths of > 3 meters this depth is enough to create anaerobic condition. 4.3 Summary of Proposed Sanitation Component Scope The scope of the sanitation component includes the following activities: A. Preparation - WD-LGU MOA (memorandum of agreement) - LGU ordinance - Land acquisition - Septic tank inventory - DED (detailed engineering design) - Contracting civil works, IEC (information-education-communication) development, capacity building - Clearances/certificates. B. Implementation/ operation - Construction of septage treatment facility and communal septic tanks - Procurement of vacuum trucks - Capacity building - Information campaign - Desludging - Repair of septic tanks - Water quality testing - Cleaning of ponds - Monitoring/evaluation. The main features of the sanitation component proposed in the four pilot WDs are shown in Table 4.2.

332 62 Supplementary Appendix F Table 4.2: Proposed Sanitation Component in Pilot Water Districts Metro La Union WD Quezon Metro WD Legazpi City WD City of Koronadal WD Viewed as Phase II of sanitation development for San Fernando City: 79 Preparation activities (WD/LGU memorandum of agreement, preparation of LGU ordinance, land acquisition, inventory and inspection of existing septic tanks, detailed engineering designs, preparation of contract documents, evaluation and award of contracts, application for environmental clearance certificates). Revolving fund for the rehabilitation of at least 1,500 household septic tanks. Construction of 10 no. pilot communal septic tanks (anaerobic baffled reactor type). Phased procurement of 4 no. desludging vacuum trucks (2 no. in 2013 and 2 no. in 2017). Construction of septage treatment plant (batchoperated anaerobic sedimentation tanks, anaerobic ponds, facultative ponds, maturation ponds, sludge drying beds), on 1.4 ha land located next to existing solid waste sanitary landfill at Brgy. Mameltic in San Fernando City. Information-educationcommunication advocacy activities. Capacity building on O&M, management of facilities, and monitoring and evaluation/ reporting. Source: PPTA. Preparation activities (WD/LGU memorandum of agreement, preparation of LGU ordinance, land acquisition, inventory and inspection of existing septic tanks, detailed engineering designs, preparation of contract documents, evaluation and award of contracts, application for environmental clearance certificates). Revolving fund for the rehabilitation of at least 1,500 household septic tanks. Construction of 10 no. pilot communal septic tanks (anaerobic baffled reactor type). Phased procurement of 4 no. desludging vacuum trucks (2 no. in 2013 and 2 no. in 2017). Construction of septage treatment plant (batchoperated anaerobic sedimentation tanks, anaerobic ponds, facultative ponds, maturation ponds, sludge drying beds), on 1.6 ha land located next to existing solid waste dump site (planned to be upgraded to a sanitary landfill) at Brgy. Mayao Kanluran in San Lucena City. Information-educationcommunication advocacy activities. Capacity building on O&M, management of facilities, and monitoring and evaluation/ reporting. Preparation activities (WD/LGU memorandum of agreement, preparation of LGU ordinance, land acquisition, inventory and inspection of existing septic tanks, detailed engineering designs, preparation of contract documents, evaluation and award of contracts, application for environmental clearance certificates). Revolving fund for the rehabilitation of at least 1,000 household septic tanks. Construction of 10 no. pilot communal septic tanks (anaerobic baffled reactor type). Phased procurement of 4 no. desludging vacuum trucks (2 no. in 2013 and 2 no. in 2017). Construction of septage treatment plant (batchoperated anaerobic sedimentation tanks, anaerobic ponds, facultative ponds, maturation ponds, sludge drying beds), on 1.2 ha land located next to the sanitary landfill being developed site at Brgy. Banquerohan on 33 ha local government economic zone, about 22km from city. Information-educationcommunication advocacy activities. Capacity building on O&M, management of facilities, and monitoring and evaluation/ reporting. Preparation activities (WD/LGU memorandum of agreement, preparation of LGU ordinance, land acquisition, inventory and inspection of existing septic tanks, detailed engineering designs, preparation of contract documents, evaluation and award of contracts, application for environmental clearance certificates). Revolving fund for the rehabilitation of at least 800 household septic tanks. Construction of 10 no. pilot communal septic tanks (anaerobic baffled reactor type). Phased procurement of 4 no. desludging vacuum trucks (2 no. in 2013 and 2 no. in 2017). Construction of septage treatment plant (batchoperated anaerobic sedimentation tanks, anaerobic ponds, facultative ponds, maturation ponds, sludge drying beds), on 1.0 ha land located next to the proposed sanitary landfill at Brgy. Paraiso, about 6km from the city. Information-educationcommunication advocacy activities. Capacity building on O&M, management of facilities, and monitoring and evaluation/ reporting. 79 Phase I: US$125,000 grant from USAID/ Rotary International for purchase of a desludging tanker truck [$100,000], preparation of a city sanitation ordinance, decisions on the division of responsibilities, and the construction of a small septage treatment plant (lime stabilization, wetlands); the Phase 1 duration is 18 months which was due to start by October 2009).

333 63 Supplementary Appendix F 4.4 Investment Items MLUWD. The sanitation component has four major physical items for investment: (a) revolving fund for the rehabilitation of 1,500 household septic tanks; (b) construction of 10 pilot communal septic tanks; (c) procurement of 4 vacuum trucks for desludging; and (d) construction of 1 septage treatment facility. QMWD. Both Lucena City and Pagbilao municipality expressed that they would like to establish septage treatment facility in their own area for the exclusive use of their constituents, while Tayabas is not yet ready to participate in the PPTA study. Due to the limited funds for the grant, it is not recommended to support 3 septage treatment facilities in Metro Quezon because this will triple the cost of investment and operation and maintenance for one WD area. If ever there would be sharing among the 3 LGUs within the WD coverage, this would be subject to further negotiation with their local Councils. Based on initial discussion with LGUs, it appears that the three LGUs would have different phasing of implementation. Since Lucena City expressed readiness to implement sanitation by indicating possible site for treatment facility, it is recommended that Lucena City be included in Phase 1 implementation ( ) while Pagbilao and Tayabas be included in Phase 2 ( ). This could mean that Lucena City will receive the grant fund from the project while the funds for the other two municipalities will still to be sourced out. The sanitation component in Lucena City has four major physical items for capital investment: (a) revolving fund for at least 1,500 household septic tanks; (b) 10 communal septic tanks (c) 4 vacuum trucks for desludging; and (d) 1 septage treatment facility. LCWD. The sanitation component has four major physical items for investment: (a) revolving fund for the rehabilitation of at least 1,000 household septic tanks; (b) construction of 10 pilot communal septic tanks; (c) procurement of 4 vacuum trucks for desludging; and (d) construction of 1 septage treatment facility. CKWD. The sanitation component has four major physical items for investment: (a) revolving fund for the rehabilitation of at least 800 household septic tanks; (b) construction of 10 pilot communal septic tanks; (c) procurement of 4 vacuum trucks for desludging; and (d) construction of 1 septage treatment facility Rehabilitation of Existing Household Septic Tanks The consultation and household survey conducted under the PPTA revealed the need to improve defective septic tanks. At the start of the subproject, an inventory and inspection of septic tanks will be conducted to determine the conditions of septic tanks and identify septic tanks to be rehabilitated. The design of septic tanks and leaching field should follow the standards cited in the Sanitation Code of the Philippines. A revolving sanitation fund to finance repair or construction of septic tanks will be established by the subproject. Based on initial estimates, about 4,800 household septic tanks will be rehabilitated at the start of the subproject for 2 years. A payment system for beneficiaries of revolving fund will be established to recover the cost, for the use of the next batch of beneficiaries until all defective septic tanks become functional. It is expected that after 2 years, payments should have been collected for at least 50% of the targets to fund the next batch of septic tanks to be rehabilitated.

334 64 Supplementary Appendix F Piloting of Community Septic Tanks To address sanitation problems of informal settlers, a communal septic tank system is being proposed for resettlement sites and in congested areas where the poor population is concentrated. This septic tank system will use anaerobic baffled reactor (ABR) with filter at the effluent (Figure 4.1). About 40 units (10 per WD) are proposed to be piloted and located in areas where congested poor population is concentrated. Since toilet space is a constraint, a group of people (10-20 households) can share the use of one unit of ABR. Household toilets can be connected by pipes to the ABR. The complete package will include ABR, sewer pipes from households to ABR, and leaching field. At the DED stage, characteristics of soil will be analyzed to determine appropriate technology for leaching field (e.g. perforated pipes, reed beds) that will satisfy DOH and DENR standards. ABR is an improvement of a septic tank. The number of chambers varies from 3 or more. The upflow chambers provide additional removal and digestion of organic matter. The last chamber will be provided with a filter to further treat the effluent. Filter material commonly used includes gravel, crushed rocks, cinder, or specially formed plastic pieces. Typical filter material sizes range from 12 to 55 mm in diameter. The filter media will hold the bacteria that will degrade the BOD of wastewater. For 100 persons, a typical design is about 25 m 3 (length = 5.5 m; width = 2.5 m; depth = 1.8 m) with at least 6 chambers. Expected efficiency is a maximum of 90% in ABR and also 90% at the filter (Table 4.3). Frequent desludging is needed every 2-3 years. It is expected that a community organization will be organized to be responsible for its maintenance. Figure 4.1: Cross-section of an Anaerobic Baffled Reactor with Filter Reference: Compendium of Sanitation Systems and technologies, EAWAG, 2008 Table 4.3: BOD Removal Efficiency of ABR with Filter Communal Septic Tank components BOD removal efficiency -Anaerobic baffled reactor % -Anaerobic filter % Source: Compendium of Sanitation Systems and technologies, EAWAG, 2008

335 65 Supplementary Appendix F Desludging of Septic Tanks The DOH operations manual of septage management (2008) stipulated a desludging frequency of about 3-5 years. Using a desludging frequency of every 5 years: MLUWD: about 45 m 3 /day is expected to be received by the treatment facility by 2013 when it starts its operation (Table 4.4). This will gradually increase to 65 m 3 /day in QMWD: about 45 m 3 /day is expected to be received by the treatment facility by 2013 when it starts its operation (Table 4.4). This will gradually increase to 65 m 3 /day in LCWD: about 33 m 3 /day is expected to be received by the treatment facility by 2013 when it starts its operation (Table 4.4). This will gradually increase to 45 m 3 /day in CKWD: about 27m 3 /day is expected to be received by the treatment facility by 2013 when it starts its operation (Table 4.4). This will gradually increase to 35 m 3 /day in To meet the septage collection demand from 2013 to 2025 and encourage private sector participation in desludging septic tanks, it could be arranged through an ordinance that the private sector could take at least 10% share of the daily demand for desludging from 2013 to This share could be increased to 20% from 2020 to 2025 to augment the services of the 2 trucks. This arrangement would need at least: MLUWD: 2 vacuum trucks (1 unit of 4 m 3 and 1 unit of 10 m 3 capacity) to be procured by the subproject, and at least 1 unit of 4 m 3 to be provided by the private sector. QMWD: at least 2 vacuum trucks (1 unit of 4 m 3 and 1 unit of 8m 3 capacity) to be procured by the Project, and at least 1 unit of 4 m 3 to be provided by the private sector. LCWD: at least 2 vacuum trucks (1 unit of 4 m 3 and 1 unit of 8m 3 capacity) to be procured by the Project, and at least 1 unit of 4 m 3 to be provided by the private sector. CKWD: at least 2 vacuum trucks (1 unit of 4 m 3 and 1 unit of 8m 3 capacity) to be procured by the Project, and at least 1 unit of 4 m 3 to be provided by the private sector. Depreciation of vacuum trucks should also be taken into consideration. Thus, before the next phase of the project ( ): MLUWD: a new set of vacuum trucks would have to be procured by the project before the end of QMWD: a new set of vacuum trucks (a 4 m 3 and a 10 m 3 ) would have to be procured by the project before end of LCWD: a new set of vacuum trucks would have to be procured by the project before the end of CKWD: a new set of vacuum trucks would have to be procured by the project before the end of The average size of septic tanks is estimated as follows: Household septic tank 3 m 3 Commercial/institutional 6 m 3

336 66 Supplementary Appendix F Table 4.4: Desludging Frequency Estimates MLUWD QMWD LCWD CKWD Schedule of desludging Units Design flow of septage m 3 /day Vacuum trucks - 4m 3 trips m 3 trips Share of private sector % Private sector - 4m 3 trips Schedule of desludging Units Design flow m 3 /day Number of trips Vacuum trucks - 4m3 trips m3 trips m3 trips Share of private sector % Private sector - 4m3 trips Schedule of desludging Units Design flow of septage m 3 /day Vacuum trucks - 4m 3 trips/day m 3 trips/day Share of private sector % Private sector - 4m 3 trips/day Schedule of desludging Units Design flow of septage m 3 /day Vacuum trucks - 4m 3 trips/day m 3 trips/day Share of private sector % Private sector - 4m 3 trips/day Other LGUs who would participate in the program should enact ordinances requiring all households, establishments and institutions to undertake regular desludging as required by the Sanitation Code. Septage of commercial establishments should be pre-treated prior to collection so as not to adversely affect the designed septage treatment. Participating LGUs will have to enact ordinances requiring all households, establishments and institutions to undertake regular desludging as required by the Sanitation Code. Septage of commercial establishments should be pre-treated prior to collection so as not to adversely affect the designed septage treatment. The travel time of vacuum trucks is estimated to be as shown in Table 4.5.

337 67 Supplementary Appendix F Table 4.5: Travel Time Estimates of Vacuum Trucks Metro La Union WD (distance between STP site and city: 5km) Itinerary S. Fernando Bauang Bacnotan San Juan San Gabriel a. Desludging septic 30 minutes 30 minutes 30 minutes 30 minutes 30 minutes tank b. From septic tank to 15 minutes 30 minutes 30 minutes 45 minutes 1 hour treatment facility c. Depositing septage 30 minutes 30 minutes 30 minutes 30 minutes 30 minutes at treatment facility d. From treatment facility to the next septic tank 15 minutes 30 minutes 30 minutes 45 minutes 1 hour Total estimated time per trip 1.5 hours 2 hours 2 hours 2.5 hours 3 hours QMWD (distance between STP site and city: 6km) a. Desludging septic tank = 30 minutes b. From septic tank to treatment facility = 15 minutes c. Depositing septage at treatment facility = 30 minutes d. From treatment facility to the next septic tank = 15 minutes. Total estimated minimum time per trip = 1.5 hours LCWD (distance between STP site and city: 22km) a. Desludging septic tank = 30 minutes b. From septic tank to treatment facility = 30 minutes c. Depositing septage at treatment facility = 30 minutes d. From treatment facility to the next septic tank = 30 minutes. Total estimated minimum time per trip = 2.0 hours CKWD (distance between STP site and city: 6km) a. Desludging septic tank = 30 minutes b. From septic tank to treatment facility = 15 minutes c. Depositing septage at treatment facility = 30 minutes d. From treatment facility to the next septic tank = 15 minutes. Total estimated minimum time per trip = 1.5 hours Septage Treatment Facility Influent BOD. For the design of treatment facility, the PPTA used the recommended BOD concentration 80 of 6,000 mg/liter for Metro Manila. Lay-out, dimension and efficiency of ponds. With the high-strength wastewater, three types of ponds were selected to reduce the level of BOD and other parameters (Figures 4.2 and 4.3). 80 Metro Manila Master Plan on Sewerage and Sanitation ( ), MWSS

338 68 Supplementary Appendix F Figure 4.2: Layout of the Septage Treatment Facility 1. SEPTAGE TREATMENT FACILITY Figure 4.3: Profile View of the Septage Treatment Facility

339 69 Supplementary Appendix F Having selected the appropriate sedimentation process the process train for the treatment of septage is quite straightforward: namely, it will consist of the following elements: Batch-operated anaerobic sedimentation tanks Anaerobic ponds Facultative ponds Maturation ponds Sludge storage and drying beds. The three-stage treatment is designed to reduce the concentration of septage to the government s acceptable levels, before disposal of effluent and sludge. Primary stage treatment takes place in the anaerobic pond, which is mainly designed for removing suspended solids, and some of the soluble element of organic matter (BOD 5 ). In the facultative ponds (secondary stage), most of the remaining BOD5 is removed through the coordinated activity of algae and heterotrophic bacteria. The tertiary stage occurs in the maturation ponds wherein the main objective is the removal of pathogens and nutrients (especially nitrogen), and at the same time reduce the remaining BOD 5. Table 4.6 shows the dimension and treatment efficiency of ponds. All ponds will be operated in parallel which ensures that each element can be taken out of service for a short period of time to allow for maintenance. Final effluent BOD. With the combination of ponds, it is designed that the expected final effluent coming from maturation pond would have a BOD concentration of about 23 mg/liter. This value is within the standard of DENR of 30 mg/liter for Class B body of water. The effluent will be disposed in a creek along the sanitary landfill, where its treated lecheate will be disposed also. If the DED will find that the permeability of soil is below the standard, it is recommended that a lining be provided in every pond to prevent percolation to the ground of untreated effluent. The desirable soil permeability should be 10-5 to 10-7 cm/s. Permeable soils need to receive a lining. Disposal and volume of sludge. Dried sludge will be used as a soil cover for the sanitary landfill to be collected every 4 months from the sludge drying bed. In 2013: MLUWD: about 760 m3 of dried sludge is estimated to be generated which will increase to about m3 by QMWD: about 860 m 3 of dried sludge is estimated to be generated which will increase to about 1,260 m 3 by LCWD: about 550 m 3 of dried sludge is estimated to be generated which will increase to about 750 m 3 by CKWD: about 450 m 3 of dried sludge is estimated to be generated which will increase to about 600 m 3 by Table 4.6: Dimension and Treatment Efficiency of Ponds and Other Parts Components Number of units Surface Length (m) Surface Width (m) Effective Depth (m) BOD reduction efficency (%) Sedimentation Tanks Anaerobic ponds Facultative ponds Maturation ponds Sludge drying beds

340 70 Supplementary Appendix F The characteristics of dried sludge will be studied after 4-6 months of operation to determine its potential for agricultural purposes. Once feasible, the operator will apply for a license as a producer of fertilizer at the Department of Agriculture. Such fertilizer could be sold in agricultural areas in the WD cities and nearby municipalities. Total land area required and location of septage treatment facilities: MLUWD: The total effective area of ponds is about 0.7 hectare. To provide open space in-between ponds and for access areas, an additional space of around 0.7 hectare would be needed for a total of 1.4 hectare. The City Council will still prepare a resolution to acquire the needed 1.4 hectare land for the treatment facility. The proposed location is at Bgy. Mameltac of San Fernando City which is about 5 kilometers away from the city centrum (Figure 4.4 and 4.5). This site will be adjacent to the existing sanitary landfill. QMWD: The total effective area of ponds is about 0.8 hectare. To provide open space in-between ponds and for access areas, an additional space of around 0. 8 hectare would be needed for a total of 1.6 hectare. The City Council will still prepare a resolution to acquire the needed 1.6 hectare land for the treatment facility. The proposed location is at Bgy. Mayao Kanluran Lucena City which is about 3 kilometers away from the city centrum (Figures 4.6 and 4.7). This site will be adjacent to the existing open dump site which will be closed soon once the sanitary landfill is in operation. LCWD: The total effective area of ponds is about 0.6 hectare. To provide open space in-between ponds and for access areas, an additional space of around 0.6 hectare would be needed, for a total of 1.2 hectare. The City Council will prepare a resolution to acquire the needed 1.2 hectare land for the treatment facility. The proposed location is at Bgy. Banquerohan which is about 22 kilometers away from the city and is along the highway with paved roads (Figures 4.8 and 4.9). This site will be adjacent to the proposed sanitary landfill which is presently being constructed by the city government through a grant from the Spanish government. CKWD: The total effective area of ponds is about 0.5 hectare. To provide open space in-between ponds and for access areas, an additional space of around 0. 5 hectare would be needed, for a total of 1.0 hectare. The City Council will prepare a resolution to acquire the needed 1.0 hectare land for the treatment facility. The proposed location is at Bgy. Paraiso which is about 6 kilometers away from the city, and nearly 1.5 kilometers from the highway (Figures 4.10 and 4.11). This site will be adjacent to the proposed sanitary landfill which is presently being acquired by the city government.

341 71 Supplementary Appendix F Figure 4.4: Location Map of Proposed Septage Treatment Facility, San Fernando City Septage Treatment Facility Site at Bgy. Mameltac Distance: 5 kms City centrum Figure 4.5: Photographs of the Proposed Location of Septage Treatment Facility, San Fernando City, La Union A: Entrance gate to the sanitary landfill B: Recommended site for septage treatment facility adjacent to sanitary landfill site (lright side of sanitary landfill) C: Left side of the proposed septage treatment facility D: Access road going to the sanitary landfill

342 72 Supplementary Appendix F Figure 4.6: Location Map of Proposed Septage Treatment Facility, Lucena City Septage Treatment Facility Site at Bgy. Mayao Kanluran City centrum Distance: 3 kms Figure 4.7: Photographs of the Proposed Location of Septage Treatment Facility, Lucena City A: Entrance to the existing open dump site B: Recommended site for septage treatment facility adjacent to the open dump site

343 73 Supplementary Appendix F Figure 4.8: Location Map of Proposed Septage Treatment Facility, Legazpi City City centrum Distance: 22 kms Septage Treatment Facility Site at Bgy. Banquerohan Figure 4.9: Photos of the Proposed Location of Septage Treatment Facility, Legazpi City A: Entrance gate to the sanitary landfill B: Recommended site for septage treatment facility adjacent to sanitary landfill site (left side of sanitary landfill)

344 74 Supplementary Appendix F C: Left side of the proposed septage treatment facility D: Access road going to the sanitary landfill Figure 4.10: Location Map of Proposed Septage Treatment Facility, Koronadal City Septage Treatment Facility Site at Bgy. Paraiso Distance: 6 kms City centrum

345 75 Supplementary Appendix F Figure 4.11: Photos of the Proposed Location of Septage Treatment Facility, Koronadal City Right Side View Top-down view Left side view Bottom-up View 4.5 Sanitation Component Activities To implement the septage management program, the proposed activities are described below Project Preparation WD-LGU Memorandum of Agreement (MOA). The Water District and Local Government Unit will forge a MOA indicating specific roles, implementation schemes and resource commitments to achieve project objectives. Preparation of ordinance. The LGU will issue an ordinance for the septage management program. It shall contain requirements for septic tank desludging, collection, treatment and disposal. It shall also include implementation arrangement describing the roles of key stakeholders for the program. All households, institutions and establishments will be covered by the ordinance. Provisions should be included for the pre-treatment of trade waste from commercial establishments if the waste will be treated in the septage treatment facility. Land acquisition. The city council will pass a resolution for acquiring the required lot for the facility. Inventory and inspection of septic tanks. The Water District, with the assistance of