Duterte signs into law new franchises for Maynilad, Manila Water

Published January 7, 2022, 6:34 PM

by Argyll Cyrus Geducos

After a long-standing controversy with its owners, President Duterte has signed the laws granting new franchises for water concessionaires Maynilad and Manila Water, allowing the two firms to continue their operations for another 25 years in Metro Manila and nearby provinces.

File photos

Based on copies of the measures provided to the media on January 7, President Duterte signed Republic Act (RA) No. 11600 and RA 11601 on December 10 last year, allowing Maynilad to operate in Metro Manila and Cavite, and Manila Water to operate in Metro Manila and Rizal, respectively.

Based on the two laws, the two concessionaires shall establish, manage, operate, repair, rehabilitate, expand, and improve the waterworks and sewerage system in their respective franchise areas, while billing and collecting fees from their end-users for their services. They can also disconnect the water supply and discontinue services if the customer defaults payment of fees.

The two firms can develop, finance, construct, install, maintain, and operate water sources in order to supply water in the franchise areas for domestic, commercial, and industrial purposes, among others.

They can also purify water from deep well, reservoirs, dams, and other water sources subject to the approval of the Department of Health (DOH) or other concerned agencies.

Both Maynilad and Manila Water can construct works required provided as the works be constructed in a manner as to afford security to life and property, as much as possible not derail traffic, and restore the area where the works were done. Works must be done with the prior approval of the Department of Public Works and Highways (DPWH), Metropolitan Manila Development Authority (MMDA), or local government units (LGUs) concerned.

They must promote water conservation and avoid water wastage. They shall establish water impounding facilities, consider and undertake the recovery and appropriate reuse of wastewater, greywater, industrial water, and reclaimed water.

Both firms must establish a consumer desk that will act on consumer complaints and ensure adequate protection of consumer interests.

They shall also ensure that service interruptions will be minimal.

Right of the Government

The newly signed franchise laws allow the President of the Philippines to temporarily take over and operate the firms in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order.

The President can also temporarily suspend the operation of any portion in the interest of public safety, security, and public welfare. The President can likewise authorize their temporary use and operation by any government agency upon due compensation to Maynilad and Manila Water.

Reportorial requirement

Both Maynilad and Manila Water are required to submit an annual report on its compliance with the terms and conditions of the franchise and on its operations to Congress on or before April 30 of every year.

The annual report shall include an update on the development, operation, and expansion of business; and audited financial statements; among others.

They shall submit to the Metropolitan Waterworks and Sewerage System (MWSS) a completion plan for the establishment and operation of water sewerage and sanitation projects covering a period until 2037, which shall include periodic five-year completion targets with the end goal of achieving 100 percent water sewerage and sanitation coverage by 2037. They must submit an annual progress report of its compliance with such targets to the MWSS and Congress.

The MWSS must conduct a comprehensive assessment of the firms’ operations a year after the franchise is granted and every five years afterward.

Failure to submit the required reports to Congress shall be penalized by a fine of P1 million for each working day of noncompliance.

The government has inked a new water concession agreement with Manila Water in April last year and with Maynilad the following month.

In 2019, water concessionaires Maynilad and Manila Water drew the ire of the President over alleged onerous provisions of the supply agreement. He likewise accused them of violating the country’s anti-graft law for passing income taxes to consumers.

The government later moved to revise the water concession contracts to remove such controversial provisions, advising the two companies to just accept the new agreement.