MANILA - A newly-formed unit of Manila Water Inc. is set to develop and operate the water supply system in 3 areas of Laguna province.

In a disclosure to the local bourse on Friday, Manila Water said it has entered a joint venture agreement with the provincial government of Laguna to form the Laguna Water Co. Inc.

The subsidiary will be operating under a concession agreement (CA) patterned after Manila Water's own CA with the Metropolitan Waterworks and Sewerage System.

"Under the CA, Laguna Water will have a 25-year exclusive right, renewable for another 25 years, to service the water requirements of the entire Cabuyao, Sta. Rosa City, and Binan as agent and contractor of the provincial government of Laguna," PGL will be the asset owner and franchisee," Manila Water said.

Manila Water said the provincial government will be the asset owner and franchisee, while the National Water Resources Board will set the tariff rates.

Laguna Water will invest P2.5 billion in an infrastructure program which will include pipeline replacements and water treatment facilities to improve water services over the next 10 years.

Of the P500-million authorized capital stock of Laguna Water, 70% will be provided by Manila Water, with the remaining 30% as the provincial government's equity contribution.

"We are happy and excited to have been given the opportunity to branch out to Laguna. Laguna has experienced sustained growth as the gateway to South Luzon with rapid development of commercial centers, modern techno parks, and expanding infrastructure development. We are confident Laguna Water will provide these areas with huge improvements similar to what Manila Water has been able to do in the East Zone of Metro Manila and Rizal province," Laguna Water President Virgilio Rivera said.

Laguna Water was formed after Manila Water completed the acquisition of AAA Water Corp. (AWC) in July. It allowed the company to take over Laguna AAA Water Corp. (LAWC), a joint venture between AWC and the provincial government.

AWC had a 70% stake in LAWC.