With San Jose del Monte, Bulacan, bracing for a potentially harsher El Niño, the city’s worsening water crisis has laid bare a host of deeper structural and governance failures at PrimeWater. Even though its joint venture with the local water district has been formally terminated, the Villar Group’s company still operates and collects elevated tariffs despite a service situation that has turned out to be seriously flawed.

The entry of new owner Lucio Co’s Crystal Bridges was meant to bring in new direction, but the lack of a well-defined rehabilitation plan, capital commitment, or meaningful engagement with the city’s leaders suggests a disturbing absence of urgency. For an industry where operational accountability directly impacts public welfare, the disparity between change of ownership and ground-level action becomes harder and harder to justify.

The Lucio Co Group’s purchase of PrimeWater Infrastructure Corp. was at first interpreted as one of the more traditional tales of Philippine conglomerate strategy: a transfer into regulated utilities; a play to aggregate a fragmented sector, or a long-term investment in stable, infrastructure-powered cash flows. 

But Vantage Point readers on the ground — specifically those from the San Jose del Monte, Bulacan, area — have tipped us off on a water problem that simply won’t go away. They graciously provided us with a data-based picture of what Lucio Co has genuinely gained. Some 47,611 households — about 250,000 people, or almost a third of the city’s population — live with inadequate or no reliable access to water. 

There are water supply shortages, and in-person classes have been suspended by schools. A state of calamity has been declared by the city. And yet, amid this breakdown, PrimeWater’s pricing framework tells an alternate story. The company charges P265.63 for the first five cubic meters — half the baseline volume used by industry peers like Manila Water and Maynilad, which charge P210.43 and P247.24, respectively, for ten cubic meters. Consumers are paying more for less — and often, for nothing at all.

This is not just a service problem. It is a structural imbalance whereby inefficiency is being transferred right to households with no other supplier. The city government, in turn, has to become the unofficial operator of last resort, spending P370 million annually, according to our tipsters, on water tanker deliveries across 62 barangays. 

Hospitals rely on these emergency supplies. In effect, public money is subsidizing the failure of a private utility that continues to bill its consumers. Operationally, the breakdown becomes even more illuminating upon closer scrutiny. Of the 122.36 million liters per day produced in San Jose del Monte, 47.16% is lost to non-revenue water, leaks, theft, and system inefficiencies that should have been mitigated with Lucio Co’s capital investment and maintenance. Almost half of that treated water never goes to paying customers. This is hardly a marginal inefficiency. It is a system functioning way below minimum viability.

PrimeWater still collects, taps run dry

The joint agreement between PrimeWater and the San Jose del Monte Water District was formally terminated in April 2025 due to three major factors: failure to reduce non-revenue water to the agreed 34%; failure to deliver a committed P2 billion capital expenditure program — of which only 1% was reportedly utilized—and a continued deterioration in water service quality. 

Normally, a partnership termination would indicate the demise of the line of business. PrimeWater, however, continues to collect fees and occupy infrastructure, which is no longer clearly within its contractual remit. That’s where the acquisition by Crystal Bridges Holding Corp. meets governance risk. 

On paper, PrimeWater has a total asset of P42.37 billion, including P26.1 billion in service concession assets. Yet, a February 2026 Senate interrogation has revealed that Crystal Bridges had only P300,000 in capitalization. Even if there are layered frameworks for funding, the gap between nominal capitalization and controlled assets calls into question immediate financial depth, clarity of funding, and the ability to perform the capital intensive rehabilitation the system needs.

Beneath the surface level, the legally undisclosed acquisition price does not give rise to a violation alone. Unlike listed entities, private transactions are not held responsible for the same standard of disclosure. But the deeper problem is not price transparency. It is operational accountability within a public-facing utility model. 

PrimeWater’s business is wrapped in joint ventures with government-owned water districts, which are exposed to audit, public scrutiny and regulatory oversight. Risks do not stop with shareholders, when there is a change of hands and no clear transition plan in place. It is shared through direct lines to consumers and local governments. San Jose del Monte is where that risk is most clearly visible: a terminated contract that keeps going in practice; a business permit of no renewal that does not stop work, and a tariff structure that keeps extracting value even when service is falling. This is not just a gray area in governance. It is a breakdown.

Referendum on execution

The market implications are immediate. The deal was supposed to be a way of buttressing the notion that utilities are steady, defensive assets. Rather, it creates a more nuanced reality that infrastructure investments are only as stable as the governance systems behind the projects. 

Investors are increasingly expected to differentiate more sharply between operators with strong performance histories and those dealing with unresolved operational liabilities hidden behind asset sizes. 

In this situation, the way forward for Lucio Co looks clear, but also unforgiving. The only real strategic direction is to firmly transition from outdated practices to visible, tangible intervention. That means ring-fenced commitments to invest in the rehabilitation of networks, aggressive cuts to non-revenue water, and an immediate response to the alignment of tariffs with service provision. It also means dealing directly with local governments — not as countervailing parties to contracts, but as participants in a system that has already reached a crisis point.

More importantly, the required course of action is to restore something that cannot be engineered through financial restructuring alone: trust. Water utilities do not operate in abstract balance sheets. They operate in kitchens, hospitals, and schools. Consumers do not evaluate the service provider’s financial structure or corporate debt. They care about the reliability, cleanliness, and affordability of their water service. 

The PrimeWater acquisition was supposed to be about consolidation. It has become, instead, a referendum on execution. Lucio Co has acquired scale, but he had also inherited a system already under strain. The real question now is whether that scale can be converted into something far more difficult to rebuild than infrastructure: credibility. – Rappler.com

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