Question & AnswerQ&A (Republic Act No. 11601)
Republic Act No. 11601 grants Manila Water Company, Inc. a franchise to establish, operate, and maintain a waterworks system and sewerage and sanitation services in the East Zone Service Area of Metro Manila and Province of Rizal for commercial purposes and in the public interest.
The Franchise Area includes the East Zone Service Area as defined under the Concession Agreement, covering cities such as Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, parts of Quezon City and Manila, and towns and cities in the Province of Rizal including Angono, Baras, Binangonan, Cainta, Cardona, Jala-Jala, Morong, Pililia, Rodriguez, Tanay, Taytay, Teresa, San Mateo, and Antipolo City.
The grantee has the rights to establish, manage, operate, repair, rehabilitate, expand, and improve waterworks and sewerage systems, develop and finance water sources and related facilities, recover and reuse treated water, operate sewerage systems, purify water, construct works over public areas with approvals, and disconnect water supply for nonpayment or pilferage.
The Regulatory Office, established under the Concession Agreement or its successor, oversees compliance with tariffs, operational standards, and other regulatory requirements of the grantee. It also approves amendments to the Concession Agreement and conducts assessments of the grantee's compliance.
The franchise term is twenty-five (25) years from the effectivity of the Act, unless sooner canceled or revoked by Congress or upon failure to comply with regulatory standards.
The grantee is required to create employment opportunities and accept on-the-job trainees, prioritizing residents of the places where it operates, while complying with applicable labor laws and standards.
In times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, the President may temporarily take over, operate, suspend, or authorize use of the waterworks and sewerage system for public safety and welfare upon due compensation to the grantee.
The grantee is liable to pay real estate, building, personal property taxes, and income taxes; however, income taxes cannot be passed on to consumers. The grantee must file tax returns and is subject to audit by the Bureau of Internal Revenue.
Failure to submit the requisite annual report shall be penalized by a fine of One million pesos (₱1,000,000) for each working day of noncompliance, payable to the Bureau of the Treasury.
The grantee may not sell, lease, transfer, grant usufruct of, or assign the franchise without prior approval of Congress, except for certain transfers such as stock issuances or sales for raising capital. Failure to report such transactions within 60 days to Congress results in ipso facto revocation of the franchise.