Duterte Signs Laws Granting 25-Year Franchises To Maynilad, Manila Water
The laws allow the two companies to establish, manage, operate, repair, rehabilitate, expand and improve the waterworks and sewerage system in the franchise area, including the right to bill and collect fees from end-users for its services.
President Duterte has signed laws granting 25-year franchises to water concessionaires Maynilad Water Services Inc. and Manila Water Company Inc.
Duterte signed on Dec. 10, 2021 Republic Act 11600 that grants Maynilad a franchise to establish, operate and maintain a waterworks system and sewerage and sanitation services in the west zone of Metro Manila and the province of Cavite; and RA 110601 that gives Manila Water a franchise to operate in the east zone of Metro Manila and Rizal province.
Manny V. Pangilinan’s Metro Pacific Investments Corp. owns a controlling stake in Maynilad, while Manila Water is controlled by ports tycoon Enrique Razon Jr.
Under the laws, the companies have the right to establish, manage, operate, repair, rehabilitate, expand and improve the waterworks and sewerage system in the franchise area, including the right to bill and collect fees from end-users for water supply and sewerage services.
The concessionaires shall also be allowed to develop, finance, construct, install, maintain and operate, as its operations may require, water sources, including new raw water sources, including deep wells, dams, aqueducts, tunnels, treatment plants, reservoirs, pump stations and facilities for the transmission, conveyance and distribution of water, including pipelines, machinery and other waterworks to supply water in the franchise area, for domestic, commercial, industrial and other purposes.
For the public interest, the grantees shall modify, improve or change its facilities, pipeline systems and equipment to provide efficient and reliable service at reasonable costs.
The laws also state that the Regulatory Office, with the approval of the Metropolitan Waterworks and Sewerage System, shall establish tariffs, rates and other charges which are fair and reasonable to ensure economic viability and a fair return on investments.
The grantees shall create employment opportunities and accept on-the-job trainees in its franchise operations, provided that priority shall be accorded to the residents of the place where they hold office or operate.
Duterte had once threatened to sue the firms for alleged “onerous” terms under their old contracts.
In January 2020, Duterte officially announced that the government is reneging on its contracts, adding threats to take back the water distribution business from the firms.
In May 2020, the President apologized to the Zobel brothers and Pangilinan after welcoming their response to the COVID-19 crisis.