Question & AnswerQ&A (Republic Act No. 11600)
The main purpose of Republic Act No. 11600 is to grant Maynilad Water Services, Inc. a franchise to establish, operate, and maintain a waterworks system and sewerage and sanitation services in the West Zone Service Area of Metro Manila and Province of Cavite for commercial and public interest purposes.
The Franchise Area covers the West Zone Service Area including the cities of Manila (except San Andres and Sta. Ana), Pasay, Paranaque, Caloocan, Muntinlupa, Las Pinas, Valenzuela, Navotas, Malabon, parts of Makati and Quezon City, and the cities and towns in the Province of Cavite, such as Cavite, Bacoor, Imus, Kawit, Noveleta, and Rosario.
Maynilad Water Services, Inc. has the rights to establish, operate, manage, repair, expand, and improve waterworks and sewerage systems, develop new water sources, recover and reuse treated water, construct necessary infrastructure, bill and collect fees from end-users, and disconnect water service for non-payment or pilferage.
The franchise is granted for a term of twenty-five (25) years from the effectivity of the Act unless sooner cancelled or revoked by Congress for public interest or failure to comply with regulatory standards.
The MWSS Regulatory Office approves the Concession Agreement acting as a certificate of public convenience and necessity. It sets and approves tariffs, monitors compliance, requires modifications for technological improvements, and can require the grantee to apply for new certificates or permits under new regulatory frameworks.
Failure to submit the requisite annual report to Congress shall be penalized by a fine of One million pesos (P1,000,000.00) for each working day of noncompliance, which shall be remitted to the Bureau of the Treasury.
The President may temporarily take over and operate the grantee's waterworks and sewerage system, suspend operation of any portion thereof, or authorize use by any government agency during war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order with due compensation to the grantee.
The grantee is authorized to exercise eminent domain to acquire private property reasonably necessary for completing its services, including pipelines and facilities, with the requirement of instituting expropriation proceedings and paying just compensation.
The grantee cannot transfer or assign the franchise or controlling interest without prior approval of Congress and following legal requirements. Certain share transfers for raising capital or ownership dispersal are allowed without approval, but Congress must be informed within 60 days after completion of such transactions; failure to notify causes ipso facto revocation of the franchise.
The grantee must establish a consumer desk to handle complaints promptly, ensure minimal service interruptions, comply with Regulatory Office standards, provide water and sewerage services efficiently and reasonably, and institute mechanisms for stakeholder consultation.
The grantee must offer at least thirty percent (30%) of its outstanding capital stock to Filipino citizens in any Philippine securities exchange within five years from the Act's effectivity, or the franchise will be automatically revoked.
The grantee must operate its waterworks and sewerage systems in accordance with Republic Act No. 9275 (Philippine Clean Water Act) and other environment-related laws, adopt technological improvements for sustainability, promote water conservation, and comply with environmental and sustainability standards in cooperation with LGUs.
The franchise shall be deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years, as provided in the Concession Agreement.
The Regulatory Office, approved by the MWSS Board of Trustees, establishes fair and reasonable tariffs based on a methodology considering costs, efficiency, consumer willingness to pay, equity, and compliance with laws. The tariffs set are presumed valid unless overturned in proper proceedings.
If the grantee fails to repair or restore public places or infrastructure altered by its works after a 10-day notice, the DPWH, MMDA, or concerned LGU can repair it and charge the grantee double the repair costs.