A ‘Swiss Challenge’ between rival water utility companies is nearing its start stage. After the submission of proposal documents, the two entities will have 90 days to provide the best offer to the local government—under the plans to expand New Clark City’s water infrastructure.
What is a Swiss Challenge? A Back-and-Forth Process to Find the Best Bidder
Simply put, this is a process which requires a public authority that has received an unsolicited bid for a public project, or for services to be provided to government, to publish the bid and invite third parties to match or better it.
By this means, a bid put by one entity is publicly made known—and allows other parties to propose better solutions. This comprises the cost, timeline and resources, among others; as well as the long-term shepherding of the project once completed. The current estimate puts the bid at nearly 15 billion pesos. With Maynilad, K-Water, and other interested parties, they are given a set period—in this case within 90 days—to put forward competitive solutions and bids.
The Swiss Challenge system, according to industry experts, encourages private entities to participate in public service development. Once a bid is set forth, a counterbid is made by a different entity, and to which, the original bidder can propose a different bid. This allows for competitive, transparent bids that aim to reduce excessive costs through competition. There is a component of back and forth—iterative—proposing that gives the best bidder multiple chances to refine and best its proposal.
Difference with other Bidding Processes. Blind, Set in Stone, and Final
Other bidding processes are ‘blind’. Traditionally, bidding processes or proposals are made without the knowledge of the other parties’ proposals—thus slightly lowering the competitive nature of the bidding. Though it does not remove the competition entirely, the opacity and lack of back-and-forth bidding reduces the opportunity for trimming costs; usually, a bid is final, and the process is not iterative by nature. An original proposal is usually set in stone.
Maynilad vs. K-Water: The Two Major Rivals in Competition
K-Water is a Korean water provider that encompasses the following services:
- Construction, operation, and management of facilities for the comprehensive use and development of water resources
- Construction and management of metropolitan waterworks (including industrial waterworks) facilities
- Development of industrial complexes and special-purpose zones
- Contracted-out operation of local waterworks and sewage
- Construction, operation, and management of renewable energy facilities
K-Water was established in 1967 and currently has a budget of 2.3 trillion Korean Won (105 billion pesos) set aside for investment projects in 2026. Its reach goes beyond Korea, and it has since developed projects in China, Philippines and Pakistan, among other countries around the world.
Maynilad, meanwhile, is a local water provider that also provides the same services. A Philippine giant, it serves 10.5 million Filipinos—nearly a tenth of the population. Since 2007, it has spent 100 billion pesos on investment projects.
Maynilad offers the following services:
- Water supply and facilities management
- Non-revenue water management
- Geographic information system development
- Wastewater management
- Utility management
- Project management
- Feasibility studying
- Pipe laying
As can be ascertained, K-Water and Maynilad offer similar services to water providers. They both involve themselves in comprehensive end-to-end management of water, infrastructure, and research.
However, the two rivals, Maynilad and K-Water, have distinct edges; they are not merely equals. Although they offer similar services, there are nuances in which one has a competitive advantage over the other. Where one has larger capital investment reserves, the other has a strong foothold in the country. One has proven its capabilities in international projects, where the other understands the local context better through its history in the Philippines. Putting the two bidders against each other poses an interesting question: which quality will prevail? And at the end of the 90-day period, what will the project look like?
Current Proposal Structure and Future Projections
The proposal will cover a twenty-five (25) year concession period for the construction, operation and maintenance of New Clark City’s water supply and wastewater infrastructure. The project also aims to boost Clark’s water capacity from 30 million liters per day—estimates point towards an increase to 150 million liters per day, according to Bases Conversion and Development Authority (BCDA).
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