Since health benefits would mostly accrue to the people living downstream of the STPs who are presently
at risk of exposure or contact with pathogens in untreated sewage, the FS recommends that the MTSP cost
(cost of capital, debt servicing, and O&M costs) be applied to the whole customer base off the East Zone
Concession Area. This results in a low percentage increase in tariffs and avoids objections and resistance
likely to be raised by the customers served by the MTSP if the cost recovery were limited to them.
As more sanitation (sewage treatment) projects are implemented, the water tariff will increase in
proportion to the customers served. The rate of increase of water tariff will likely be gradual and more
acceptable to customers. It should be noted, however, that the total incremental cost of sewage treatment
may equal the basic water supply cost based on the water rates imposed by industrial estates which
provide both water supply and sewage treatment services to their locators. Straight line depreciation of
capital costs over ten (10) years would already amount to almost P10.00/m3
.
Enhancement of property values can be translated into higher government revenues in the form of realty
taxes and increase in business activity. This does not directly benefit MWSS but the local government
unit. A mechanism may be put in place to allow MWSS and/or the national government, which will be
assuming the financial burden of the project, to share in this additional income (i.e., higher real estate
taxes from river or lake front properties). This sharing mechanism will further improve the financial
viability of the project.
The application of sludge (from septic tanks and from sewage treatment plants) on lahar areas has positive
impacts directly on agricultural productivity and indirectly on land value. The value of these positive
impacts was not included in the financial viability analysis even as they enhance the financial viability of
the project. On the other hand, long term impacts, particularly of pathogens and heavy metals, on
environment, health, and safety need to be confirmed to ensure that negative impacts are avoided or
mitigated.