ADB partners with Isle Utilities for special edition Podcast

[00:00:00] Piers Clark: Welcome to this special series of conversations supported by Isle Utilities in collaboration with the Asian Development Bank. In this series, we explore the innovations, partnerships, and policies driving sustainable water solutions across Asia and the wider Pacific. My name is Piers Clark and my guest today is Frank Kyota, the Chief Executive of Palau Public Utilities Corporation in the northwest of the Pacific.
[00:00:20] Piers Clark: Frank, brilliant to speak with you today.
[00:00:23] Frank Kyota: Thank you. Great to be here, Piers.
[00:00:25] Piers Clark: Now we always like to start by learning a little bit more about our guest. Can you talk me through how you got into the role you are in today? What did you do beforehand?
[00:00:36] Frank Kyota: I finished college back in '85 with a major in criminal justice. Came home and I had a stint with a community college teaching some courses. Then in 1987 I got a job with Palak Petroleum product.
[00:00:49] Frank Kyota: When Shell Oil Company first came to Guam in 1984 and branched out to the Northern Mariana Island, also known as Saipan. The guy who was running this business was the Deputy High Commissioner for the Trusteeship Agreement, who knew my father-in-law and his friend, the chief of Koror. Just a short history for context. Before Palau became a republic, we were a Trust Territory under the United States, under the Trusteeship Agreement with the U.N..
[00:01:19] Frank Kyota: Now going back, they started a small company called Palau Petroleum Products, which became a shell agent to sell fuel and oil in Palau. And then, we transitioned until 1998 when they sold the company to Shell Company Pacific Islands Limited. So I transitioned to become the area manager for the Republic of Palau, and then from then I stayed with the company until 2012.
[00:01:46] Frank Kyota: And then I ran for Congress and won. So I had a city in the house of delegates, the lower house. After four years, I ran for the Senate and won the election. So I became a senator for another term total of eight years, and then I ran for Vice President of the Republic in 2020. I lost the election, so I stopped politics for about six months, and then there was a job announcement by PPUC, and so I put in my application.
[00:02:14] Piers Clark: And PPUC is Palau Public Utilities Corporation, the place where you are today. Is that correct?
[00:02:20] Frank Kyota: Yes, that's correct. I was fortunate to get the job and was hired on September 7th, 2021.
[00:02:28] Piers Clark: Now, what I love about that story is you started in a small family business. You see that growth. Then you spend a stint of your career doing the things that you do when you're in a big corporate.
[00:02:37] Piers Clark: Then you go into public service and politics, and you're successful there. Then as most political careers, it sort of ends when you are no longer elected and you have to reinvent yourself. And of course, you're still now back in public service within a utility, within a corporation. It's a really interesting story.
[00:02:55] Piers Clark: Now, I think many people in the audience will not know where you are based. So let's talk about PPUC, Palau Public Utilities Corporation. Where are you in the world? What is it you do? How many people do you serve?
[00:03:08] Frank Kyota: We are at the Westernmost Island of the North Pacific with a population range between 17 and 20,000.
[00:03:16] Frank Kyota: We have Philippines to the south and Guam to the north. We have a big Filipino ethnic group in Palau. We also have Japanese, Bangladesh, Koreans, Chinese and Taiwanese communities.
[00:03:28] Piers Clark: Excellent. 20,000 people on a remote island in the Northwest Pacific.
[00:03:33] Piers Clark: Now, what we're going to talk about today is how the Asian Development Bank has supported you on a number of your infrastructure and operational programs. And I'd like to start with what have they done to help you with your non-revenue water program?
[00:03:49] Frank Kyota: We have what we call Asian Development Banks' PBL loans or policy-based loans, basically loans to make money.
[00:03:57] Frank Kyota: They've addressed very critical issues with respect to our non revenue water and also the water supply. For example, we spend our money improving our major water treatment plant that's providing water to about 80% or more to the people of Palau who are mostly in Koror and in Airai. If you've been to Palau, Airai is where the airport is located. So you get off the airport in Airai, and then you drive across the bridge to the city.
[00:04:26] Frank Kyota: And within Koror, there's four main storage tanks. The transcription line from Airai pumps into these huge storage tanks. And then from there it goes to our distribution lines, to all the villages and house launch in Koror. Over time, those pumps from our treatment plant have aged and they're consuming so much power and producing less water. So we were losing money on the operational side of the company.
[00:04:52] Piers Clark: And these were asbestos cement pipes, is that correct?
[00:04:55] Frank Kyota: Yes. But in 2016, we had a grant from Japan where they replaced all the transmission lines from the plant all the way into the city of Koror. The money we then got from ADB was used to improve the old pumps efficiency and revenue.
[00:05:14] Frank Kyota: Now the tanks feeling all the major arteries going to two very crowded villages have been replaced by PVC pipes. All the lateral lines were replaced, new meters were installed, and so the water level at the tank has increased dramatically. The meters were the ones that were really making us lose a lot of revenue through the water, running away without being countered and accounted for.
[00:05:38] Piers Clark: Let's just dig into that a little bit more because it's a relatively small scheme in the big scheme of things, but very important to you because of the limited infrastructure you've got. So when you replaced those meters, you've discovered that the previous meters had been under recording, which meant that you'd been thinking that you'd got enormous leakage.
[00:05:59] Piers Clark: Once the new meters went in, suddenly you knew actually how much water is being used by your customers and you were therefore able to charge them for that water and increase your revenues. Have I got that right?
[00:06:11] Frank Kyota: Exactly.
[00:06:12] Piers Clark: So just to help me with the scale of that miscalculation, that drift that had happened on the meters, how old were those meters?
[00:06:19] Frank Kyota: Some were over 20 years old. Some were 30 old, some were four years.
[00:06:23] Piers Clark: And what's the scale of the improvement to the non-revenue water? After the new meters had gone in?
[00:06:29] Frank Kyota: Before there was about 56% NRW. Now it's gone down to about 40%, and actually what we replaced was just a small portion of the whole population.
[00:06:41] Piers Clark: Brilliant. That's amazing. Now tell me, why did you choose to go with the Asian Development Bank? Were they the only ones open to offering you funding to do this, or were there other options and if so, what made ADB stand out?
[00:06:54] Frank Kyota: We chose ADB because ADB, they work with you. They tailor the products and services to your requirements and needs. Of course, the terms were okay and the good thing about is that it is a country driven project that ADB supports and help, and that really made the difference.
[00:07:15] Piers Clark: Excellent. I'm sure they'll be pleased to hear that.
[00:07:17] Piers Clark: I'd like to move on to talking about a sort of challenge that exists for the whole water sector around the world, which is the workforce. The fact that it was really hard to keep hold of our skills. You've gotta a particular angle on that challenge because of the remoteness of the island. How severe is it and what sort of ideas and things are you looking at to help address it?
[00:07:38] Frank Kyota: With respect to our relationship with the United States, we can stay there, we can live there, we can work there, we can die there and be buried in the States. So, a lot of locals are migrating to the states and try to make a living or looking for opportunities.
[00:07:54] Frank Kyota: And so the effort is to retain the locals and the talent and support them because in my opinion, we are still building this nation. Therefore, we need to make sacrifices. We need to stay home. Be present and work with one another to really help build this nation. We put emphasis on hiring locals and training them and retaining them and help them grow and also grow the company.
[00:08:19] Frank Kyota: Also, we are an independent republic, so we have our relationships with other countries like the Philippines. We can recruit the workers from the Philippines, especially the engineers and accountants, you name it. And they're very close to us and is a visa free between the two countries, so they can come in, they stay on contract, and so we were able to fill that void with respect to out-migration of the talent and the workforce being depleted.
[00:08:47] Piers Clark: That's good because it is a universal problem of how to keep talent in the sector with so many other competing sectors. And then you've got this compound issue of many of your residents immigrating because they see better opportunities elsewhere in other parts of the world.
[00:09:03] Frank Kyota: On the other side of the coin is we are working with our policy makers to make the benefit of working for the SOE more attractive like health benefits, insurance benefits, 401k opportunities, pension and social security and whatnot.
[00:09:18] Frank Kyota: As we improve those benefits, I know locals will return.
[00:09:22] Piers Clark: When you said SOE, you mean state owned enterprise and state owned enterprise such as PPUC?
[00:09:26] Frank Kyota: Exactly, yes. Like PPUC.
[00:09:29] Piers Clark: That's actually great to hear. It's been brilliant speaking to you, brilliant getting that little window into what it's like running a water utility in the northwest of the Pacific.
[00:09:38] Piers Clark: Now Frank, I'd like to finish with a question about what do you owe your parents?
[00:09:43] Frank Kyota: Oh. Where would I be without them? The raising of a child, the discipline of a child, the training of a child that someday may bring happiness to their hard labor of love. My father was always encouraging me to go to school, come back home, and work to improve not only my life, but the life of others, and also improve the community. Those lessons stayed with me.
[00:10:09] Frank Kyota: Thank the good Lord, for our parents, for the love and the tough love and the discipline they've given us all as we were growing up.
[00:10:17] Piers Clark: You have been listening to this special series of conversations supported by Isle Utilities in collaboration with the Asian Development Bank with me Piers Clark, and my guest today has been Frank Kyota, the Chief Executive of the Palau Public Utilities Corporation in the northwest of the Pacific.
[00:10:30] Piers Clark: I hope you can join us again next time. Thank you.