After five years of privatization and regulation of water and sanitation services in Metro Manila, Philippines, this paper considers: (i) Was the fateful gamble the authorities took in 1997 despite the obvious risks justified by the eventual payoffs to the public?; (ii) Why and how did the dismal but stable equilibrium represented by the pre-1997 Manila Waterworks and Sewerage System (MWSS) persist and eventually get overturned?; (iii) How did the initial expertise deficit as well as the lack of a stronger legal platform for water regulation affect the quality of regulation?; (iv) What did bid structure and the Concession Agreement offer in terms of incentives and come-ons that allowed the game to proceed?; (v) How did the tariff disputes arise and either get resolved or left to fester?; (vi) How did the decision to split the service area into two zones empower the regulators, and (vii) How much did corporate culture weigh in on the markedly different performance of the two concessionaires?
Manchester, UK, CRC Working Paper, No. 123, 71 pp.