AN ACT GRANTING THE CALAPAN WATERWORKS SYSTEM AND DEVELOPMENT CORPORATION A FRANCHISE TO CONSTRUCT

Case Overview and Summary

Summary of Republic Act No. 9185

National and Scope of Franchise (Section 1):
- Grants Calapan Waterworks System and Development Corporation (the grantee) a franchise to construct, install, operate and maintain a water supply and sewerage system in the City of Calapan, Province of Oriental Mindoro.
- The grantee has the following rights and privileges:
• To construct, maintain and operate water mains, pipes, conduits, reservoirs or dams on land owned or acquired by the grantee. (Section 1a)
• To supply, sell, and furnish water to any person, corporation or public or private concern within the city limits for domestic, manufacturing or any other use, and to charge and collect a schedule of prices and conventional rates for the use of water, subject to regulation by the National Water Resources Board or any other government agency concerned. (Section 1b)
• To construct, maintain, and operate sanitary sewer systems necessary for proper sanitation of the city, and to charge and collect a schedule of fees, subject to regulation by the government entity in charge of this activity. (Section 1c)
• To purify the sources of water supply, reservoirs and dams, subject to approval of the Department of Health and/or any other government agency concerned, and to regulate the control and use, and prevent the waste of water. (Section 1d)

Prior Approval of the Department of Public Works and Highways (Section 2):
- The grantee shall secure appropriate permits and licenses from the Department of Public Works and Highways (DPWH), the local government unit (LGU), or any other government agency with jurisdiction over the grantee's operation.
- The DPWH, LGU, or any other government agency concerned shall not unreasonably withhold or delay the grant of any such authority.

Right of Way and Construction (Section 3):
- For the purposes of constructing, installing, operating and maintaining its water supply and sewerage system, the grantee may install, lay, construct and maintain above and below the ground on the right of way duly acquired or obtained by the grantee, or below the ground on all streets, public thoroughfares and public places and along or under the bridges within the city limits, water mains, pipes, conduits and all other necessary apparatus and appurtenances.
- Any public lands and property, including highways, streets, bridges and public works disturbed, altered or changed shall be repaired, restored and replaced in a workmanlike manner by the grantee to the satisfaction of the DPWH or the local engineering office, and in accordance with existing laws and rules on excavation and reconstitution of such public works.
- The construction and laying of water mains, pipes and sewers shall be done in a workmanlike manner, in accordance with the standards set by the DPWH.
- All apparatus and appurtenances used by the grantee shall be modern and first class in every respect, and the water mains, pipes and sewers shall, when laid in streets or public places, be so placed and maintained as not to interfere in any manner with the unrestricted use of such public places and streets.

Easement over Public Land (Section 4):
- When rights and easements of temporary occupancy over public land or property including highways, roads, bridges and other public works are needed by the grantee for the purpose of carrying out works essential to its operation, such right shall be granted by the DPWH who shall see to it that such easement or temporary occupancy shall cause the least inconvenience to the general public.

Eminent Domain (Section 5):
- The grantee may acquire such private property or portion thereof as is actually necessary for the realization of the purposes for which this franchise is granted.
- In case the owner refuses to sell or allow the use thereof, the proper proceedings shall be instituted, provided that just compensation is paid.

Term of Franchise (Section 6):
- This franchise shall be for a term of twenty-five (25) years from the date of effectivity of this Act, unless sooner revoked or cancelled.
- This franchise shall be deemed ipso facto revoked in the event the grantee fails to implement fully, the medium-term development plan submitted to Congress in support of its application for the franchise.

Rates for Services (Section 7):
- The charges and rates for the services that the grantee shall offer to the public shall be subject to the approval of the proper government agency concerned therein.

Acceptance and Compliance (Section 8):
- Acceptance of this franchise shall be given in writing sixty (60) days after the effectivity of this Act.
- Upon giving such acceptance, the grantee shall exercise the privileges granted under this Act.
- Non-acceptance shall render the franchise void.

Warranty in Favor of National and Local Governments (Section 9):
- The grantee shall hold the national, provincial and municipal governments of the Philippines harmless from all claims, accidents or injuries, whether to property or to persons, caused by the construction or operation of the pipelines of the grantee.

Reportorial Requirement (Section 10):
- The grantee shall submit an annual report to the Congress of the Philippines on its compliance with the terms and conditions of the franchise and on its operations within sixty (60) days from the end of every year.

Sale, Lease, Transfer, Usufruct, Etc. (Section 11):
- The grantee shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity, nor shall the controlling interest of the grantee be transferred, whether as a whole or in parts, and whether simultaneously or contemporaneously to any such person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines.
- Any person or entity to which this franchise is sold, transferred or assigned shall be subject to all the same conditions, terms, restrictions and limitations of this Act.

Separability Clause (Section 12):
- If any of the sections or provisions of this Act is held invalid, all the other provisions not affected thereby shall remain valid.

Repealability and Nonexclusivity Clause (Section 13):
- This franchise shall be subject to amendment, alteration or repeal by the Congress of the Philippines when the public interest so requires and shall not be interpreted as an exclusive grant of privileges herein provided for.

Effectivity (Section 14):
- This Act shall take effect fifteen (15) days from the date of its publication, through the initiative of the grantee, in at least two (2) newspapers of general circulation in the Philippines.