Law Summary
Definition of Terms
- Defines key terms: Concession Agreement, Franchise Area (specific cities and towns covered), and Regulatory Office (MWSS Regulatory Office or its legal successor).
Rights and Privileges
- Grantee authorized to operate, maintain, repair, rehabilitate, expand, and improve waterworks and sewerage systems.
- Rights to charge and collect fees from users.
- Authority to develop and manage water sources and infrastructure including dams, reservoirs, pipelines.
- Permission to recover, supply, reuse treated and grey water.
- Financing and operating sewerage systems, with restrictions on industrial effluent services.
- Purification of water subject to health agency approval.
- Construction works across public thoroughfares subject to restoration obligations.
- Right to disconnect service for nonpayment or pilferage.
Operation and Maintenance Standards
- Compliance with Republic Act No. 9275 (Philippine Clean Water Act of 2004), Presidential Decree No. 1067 (Water Code), and Concession Agreement.
- Obligation to implement regulatory standards and adopt technological improvements.
- Promotion of water conservation, reuse, and energy-efficiency technologies.
Certificate of Public Convenience and Necessity, License or Permit
- Concession Agreement acts as the operating certificate/license.
- Agreement remains valid except if terminated by due process or court/government agency decision.
- MWSS authorized to amend agreement to extend term upon public interest.
- Grantee to apply for certificates under new regulatory frameworks.
- Rights to match highest bid to acquire MWSS assets.
Excavation and Restoration Works
- Grantee authorized to excavate for construction with prior approval from DPWH, MMDA, or LGUs.
- Obligation to restore and repair public property disturbed within set standards.
- Failure to repair after notice allows government to perform repairs and charge double costs.
Responsibility to the Public
- Obligation to provide honest, prudent, efficient, and satisfactory service.
- Mandate to modify/improve facilities upon regulatory directive.
- Charge reasonable and just fees.
- Compliance with environmental laws, Indigenous Peoples Rights Act, and community consultations.
Tariff Setting
- Regulatory Office sets fair, reasonable tariffs with MWSS Board approval.
- Tariff considerations include costs, efficiency, consumer willingness to pay, equity, administrative simplicity, and legal obligations.
- Tariffs presumed valid unless overturned by administrative or judicial proceedings.
Consumer Protection
- Establishment of a consumer desk.
- Prompt action on complaints and minimization of service interruptions as per regulatory standards.
Independent Directors
- Board must have at least 20% independent directors.
- Independent directors must meet qualifications and experience related to water security and environmental fields.
Government's Special Rights
- President may temporarily take over operation or suspend services during emergencies or public peril, with due compensation.
Eminent Domain
- Grantee authorized to exercise eminent domain for efficient service provision following legal procedures.
- May acquire private and public property necessary for infrastructure development.
Franchise Term
- Valid for 25 years unless revoked or cancelled for non-compliance or public interest.
- Automatic revocation if service is discontinued for two years.
Acceptance and Compliance
- Franchise acceptance in writing to Congress within 60 days; failure to accept renders franchise void.
Warranty in Favor of the Government
- Grantee indemnifies government entities from claims arising from accidents during construction or operations.
Employment Commitment
- Obligation to create employment and accept trainees, with priority for local residents.
- Compliance with labor laws required.
Liability for Damages
- Grantee liable for injury or damages caused by defective infrastructure or neglect.
Restrictions on Sale/Transfer of Franchise
- No sale, transfer, assignment, or merger without Congress approval except specific stock transactions related to capitalization.
- Failure to inform Congress of ownership changes within 60 days causes franchise revocation.
Dispersal of Ownership
- Grantee required to offer at least 30% of outstanding capital stock to Filipino citizens within five years.
- Failure results in ipso facto revocation.
Information Dissemination
- Obligation to inform consumers about public services, operations, and franchise provisions.
Annual Reporting
- Annual compliance report to Congress including financials, operations, and ownership status.
- Submission of multi-year completion plans and progress reports to MWSS Regulatory Office.
- Periodic comprehensive assessments by Regulatory Office.
Fines for Noncompliance
- Fine of Php 1,000,000 per day for failure to submit annual reports to Congress.
- Separate from other administrative penalties.
Taxation
- Grantee liable for real estate, property, and income taxes.
- Taxes not to be passed on to consumers.
- Subject to audit by Bureau of Internal Revenue.
Equality Clause
- Any advantages or exemptions granted under other water franchises apply equally to grantee except territorial, term, or service type provisions.
Applicability of Existing Laws
- Grantee subject to Public Service Act and other relevant laws.
Amendability and Nonexclusivity
- Franchise subject to amendment, alteration, or repeal by Congress.
- Grant not exclusive.
Repealing Clause
- Inconsistent laws and issuances are repealed or modified as necessary.
Effectivity
- Act takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.