Title
Republic Act No. 11600
Date
Dec 10, 2021
Maynilad Water Services, Inc. is granted a franchise to establish, operate, and maintain a comprehensive waterworks and sewerage system in the West Zone Service Area of Metro Manila and Cavite, ensuring reliable potable water supply and sanitation services while adhering to regulatory standards and consumer protection measures.
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Law Summary

1. Nature and Scope of Franchise

  • Explanation: This section grants Maynilad Water Services, Inc. (the grantee) the franchise to establish, operate, and maintain a waterworks system and sewerage services in specified areas of Metro Manila and Cavite.
  • Key Definitions:
    • Grantee: Maynilad Water Services, Inc. and its successors or assignees.
    • Franchise Area: Defined service area including parts of Metro Manila and Cavite.
  • Requirements:
    • Operations must be under the concession from the Metropolitan Waterworks and Sewerage System (MWSS) or appropriate permit.
  • Important Details:
    • Must comply with the Constitution and applicable laws.

2. Definition of Terms

  • Explanation: This section defines key terms relevant to the Act.
  • Key Definitions:
    • Concession Agreement: Agreement between the grantee and MWSS detailing operational terms.
    • Regulatory Office: Office established under the Concession Agreement, responsible for regulations.
  • Important Procedures: Understanding these definitions is crucial for interpreting the franchise's provisions.

3. Rights and Privileges of the Grantee

  • Explanation: Enumerates the rights and privileges granted to the grantee to operate and maintain the waterworks and sewerage systems.
  • Key Points:
    • The grantee may develop water sources, charge fees, and disconnect services for non-payment.
    • Rights to construct necessary infrastructure across public properties.
  • Important Procedures: All operations must align with industry standards and relevant health regulations.

4. Manner of Operation of Stations or Facilities

  • Explanation: Outlines operational requirements for the water and sewerage systems.
  • Key Points:
    • Must operate according to standards set by relevant laws and the Regulatory Office.
  • Important Requirements:
    • Modify systems as required by technological advancements or government mandates.
  • Key Cross-References: Compliance with Republic Act No. 9275 (Philippine Clean Water Act) and Presidential Decree No. 1067 (Water Code).

5. Certificate of Public Convenience and Necessity

  • Explanation: Establishes the Concession Agreement as the necessary permit for operations.
  • Key Points:
    • The Agreement remains valid unless terminated or invalidated by law.
  • Important Procedures: Grantee must apply for new permits if a new regulatory framework is established.

6. Excavation and Restoration Works

  • Explanation: Grants the grantee permission to perform excavation for infrastructure.
  • Key Points:
    • Requires approval from relevant authorities before excavation.
    • Must restore any disturbed public property to its original state.
  • Penalties: Failure to comply allows authorities to undertake repairs at the grantee's expense.

7. Responsibility to the Public

  • Explanation: Mandates the grantee to provide efficient and reliable service.
  • Key Points:
    • Must charge reasonable fees and comply with environmental standards.
  • Important Requirements: Engage with local governments and stakeholders for service improvements.

8. Setting Tariffs, Rates and Other Charges

  • Explanation: Details how tariffs and rates are to be established.
  • Key Points:
    • Rates must be fair, reasonable, and based on essential cost considerations.
  • Important Procedures: Regulatory Office must consult stakeholders before rate-setting.

9. Protection of Consumer Interests

  • Explanation: Requires the establishment of a consumer desk for handling complaints.
  • Key Points:
    • The grantee must ensure minimal service interruptions and timely responses to complaints.

10. Election of Independent Directors

  • Explanation: Mandates the inclusion of independent directors on the grantee’s board.
  • Key Points:
    • At least 20% of the board must be independent directors with relevant experience.

11. Right of the Government

  • Explanation: Preserves government rights to intervene in emergencies.
  • Key Points:
    • The President can take over operations during times of crisis with due compensation.

12. Right of Eminent Domain

  • Explanation: Authorizes the grantee to exercise eminent domain as necessary for operations.
  • Key Points:
    • Must pay just compensation for acquired properties and follow legal procedures for expropriation.

13. Term of the Franchise

  • Explanation: The franchise is granted for 25 years.
  • Key Points:
    • May be revoked for non-compliance or failure to operate for two consecutive years.

14. Acceptance and Compliance

  • Explanation: The grantee must accept the franchise in writing within 60 days of enactment.
  • Consequences: Non-acceptance voids the franchise.

15. Warranty in Favor of the National and Local Governments

  • Explanation: Protects the government from liabilities arising from the grantee's operations.

16. Commitment to Provide Employment Opportunities

  • Explanation: Mandates the grantee to create job opportunities, prioritizing local residents.

17. Liability for Damages

  • Explanation: Holds the grantee liable for injuries or damages resulting from its operations.

18. Sale, Lease, Transfer, Grant of Usufruct, Or Assignment of Franchise

  • Explanation: Prohibits the transfer of the franchise without congressional approval.
  • Key Points:
    • Certain exceptions apply, particularly regarding stock issuance.

19. Dispersal of Ownership

  • Explanation: Requires the grantee to offer at least 30% of its stock to Filipino citizens within five years.
  • Consequences: Non-compliance results in franchise revocation.

20. Information Dissemination

  • Explanation: Mandates the grantee to inform the public about services and operations.

21. Reportorial Requirement

  • Explanation: Requires annual reporting on compliance and operations.
  • Key Points:
    • Reports due by April 30 each year with detailed operational updates.

22. Fine

  • Explanation: Establishes penalties for failing to submit required reports.
  • Penalties: A fine of P1,000,000 per working day of non-compliance.

23. Tax Provision

  • Explanation: The grantee must pay applicable taxes like other corporations.
  • Key Points: Income taxes cannot be passed to consumers.

24. Equality Clause

  • Explanation: Grants the grantee any future advantages provided to other water utility franchises.

25. Applicability of Existing Laws

  • Explanation: The grantee must comply with existing public service laws.

26. Repealability and Nonexclusivity Clause

  • Explanation: The franchise can be amended or revoked by Congress as needed.

27. Repealing Clause

  • Explanation: Repeals any conflicting laws or regulations.

28. Effectivity

  • Explanation: The Act takes effect 15 days after publication.

Key Takeaways

  • Republic Act No. 11600 grants Maynilad Water Services, Inc. a franchise for water and sewerage services.
  • The franchise includes specific rights and responsibilities, operational standards, and compliance requirements.
  • Failure to adhere to the conditions may result in penalties, revocation of the franchise, or governmental takeover in emergencies.
  • The grantee must promote public participation through stock offerings and ensure consumer protection through established channels.

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