Definitions of Key Terms
- Concession Agreement: Agreement between grantee and MWSS dated 1997 with amendments up to 2021.
- Franchise Area: Specified cities and municipalities in Metro Manila and Rizal province covered by the concession.
- Regulatory Office: The MWSS Regulatory Office or its legal successor overseeing regulation.
Rights and Privileges of the Grantee
- Authority to establish, operate, repair, expand waterworks and sewerage system within Franchise Area.
- Right to bill and collect fees from end-users.
- Powers to develop and operate water sources, treat and reuse water, build sewerage systems, purify water subject to government approval.
- Authorization to construct infrastructure crossing public places and to disconnect services for non-payment or illegal use.
Operation Standards and Environmental Compliance
- Facilities must be operated according to industry standards under existing water and clean water laws.
- Grantee to comply with Regulatory Office and government resolutions/standards.
- Responsible for managing La Mesa Dam and promoting technological improvements.
- Required to promote water conservation, reuse wastewater, and may adopt waste-to-energy technologies.
Validity of Concession Agreement as License
- Concession Agreement considered as certificate of public convenience, license or permit for operation.
- Agreement remains valid unless terminated by law, court order, or governmental authority for public interest.
- Possibility to apply for extension upon public interest.
- Grantee to apply for new permits if new regulatory frameworks arise.
- Right of first refusal for MWSS assets subject to public bidding under prescribed procedures.
Excavation and Restoration Responsibilities
- Grantee allowed to excavate public places with prior approval.
- Obligation to restore public infrastructure to original state at grantee's expense.
- Failure to repair after notice allows authorities to repair and charge double cost to grantee.
Duties towards the Public
- Grantee must operate honestly, prudently, and efficiently.
- Provide water and sewerage services at reasonable cost and satisfactory standards.
- Comply with environmental laws and ensure free, prior informed consent where applicable.
- Engage stakeholders through consultation mechanisms.
Setting Tariffs and Charges
- Tariffs to be set by Regulatory Office with MWSS Board approval.
- Tariffs must be fair, reasonable, and ensure economic viability with fair investment returns.
- Consideration of multiple factors including costs, efficiency, willingness to pay, equity, and administrative simplicity.
- Set tariffs presumed valid unless overturned in proper proceedings.
Consumer Protection Measures
- Establish consumer desk to handle complaints and protect consumer interests.
- Address complaints promptly.
- Minimize service interruptions in compliance with regulatory standards.
Governance: Independent Directors
- Board required to have at least 20% independent directors.
- Independent directors must be free from conflicts and have management or relevant professional experience.
Government's Special Rights
- President may temporarily assume operation or suspend services during emergencies.
- Compensation to the grantee for any temporary government use.
Eminent Domain Power
- Grantee authorized to exercise eminent domain to acquire private property necessary for operations.
- Installation of facilities over or under public property authorized.
- Just compensation required and legal proceedings must be instituted.
Franchise Term and Revocation
- Franchise valid for 25 years unless revoked or cancelled by Congress.
- Automatic revocation if the grantee ceases operations for two consecutive years.
Acceptance and Compliance
- Grantee must formally accept franchise in writing within 60 days of effectivity.
- Nonacceptance voids the franchise.
Liability and Warranty to Government
- Grantee indemnifies national and local governments against claims from accidents or damages in construction or operation.
- Grantee liable for damages caused by defects or negligence.
Employment Obligations
- Required to create employment and accept trainees.
- Priority given to local residents.
- Must comply with labor laws and reflect employment data in annual reports.
Restrictions on Transfer and Assignment
- Franchise and rights cannot be sold, leased, assigned, or transferred without prior congressional approval.
- Certain share transactions and capital raises exempted but must notify Congress within 60 days.
- Failure to notify results in automatic revocation.
- Successors bound by original franchise terms.
Dispersal of Ownership
- At least 30% of outstanding capital stock must be offered to Filipino citizens within 5 years.
- Failure results in automatic revocation.
Public Information and Transparency
- Information campaigns required for end-users about services and franchise terms.
Annual Reporting Requirements
- Submit annual compliance and operation reports to Congress.
- Reports to include financial statements, ownership updates, operational targets.
- Submit completion plan for full coverage by 2037.
- Regulatory Office to conduct periodic comprehensive assessments.
Penalties for Non-Compliance
- Failure to submit annual report fined Php 1,000,000 per working day.
- Fine separate from regulatory penalties and remitted to the Treasury.
Taxation
- Grantee subject to usual taxes on real estate, personal property and income taxes.
- Income taxes cannot be passed on to consumers.
- Tax compliance subject to audit.
Equality Clause
- Any advantages or privileges granted under other water franchises shall also apply here.
- Does not affect territorial coverage or term.
Application of Existing Laws
- Grantee subject to Public Service Act and other applicable laws.
Non-exclusivity and Congressional Control
- Franchise may be amended or repealed by Congress as public interest requires.
- Grant is non-exclusive.
Separability Clause
- Invalidity of any provision does not affect the rest of the Act.
Repealing Clause
- Conflicting laws or rules are repealed, amended, or modified accordingly.
Effectivity
- Act takes effect 15 days after publication.