THE LAW that grants Maynilad Water Services, Inc. its franchise will take effect on Jan. 22, 2022, the water concessionaire’s listed shareholders said on Monday, giving it until early 2027 to list its shares on the stock exchange.
In separate disclosures, DMCI Holdings, Inc. and Metro Pacific Investments Corp. (MPIC) said they had been notified of the publication on Jan. 7, 2022 of Maynilad’s franchise or Republic Act (RA) No. 11600.
The law, which takes effect 15 days after its publication in the Official Gazette, grants the company a 25-year franchise to establish, operate and maintain a waterworks system and sewerage and sanitation services in the west zone service area of Metro Manila and the province of Cavite.
DMCI Holdings and MPIC respectively owns 27% and 52.8% of Maynilad Holdings Corp., the holding firm that owns 92.9% of the water concessionaire. Marubeni Philippines Corp. is the third member of the consortium.
In their disclosure, the two conglomerates highlighted five provisions in RA 11600, including the requirement to publicly list at least 30% of Maynilad’s outstanding capital stock within five years from the grant of the franchise.
They also highlighted the prohibition on the passing on of the corporate income tax to customers.
The law also grants authority to the government, through the Metropolitan Waterworks and Sewerage System (MWSS), to amend Maynilad’s revised concession agreement to extend its term, which is until 2037, to coincide with the term of the franchise, or until 2047.
The concession agreement acts as the Certificate of Public Convenience and Necessity of Maynilad for the operation of its waterworks and sewerage system. It also provides that in the event the waterworks and sewerage system assets of MWSS pertaining to the franchise area are privatized by law, Maynilad has the right to match the highest compliant bid after a public bidding.
RA 11600 also calls for the setting of tariffs and charges, which Maynilad may charge, as the MWSS-Regulatory Office may allow. It also requires the completion of company’s water and sewerage projects to attain 100% coverage by 2037, including periodic five-year completion targets.
Separately, listed water concessionaire Manila Water Co., Inc. told the stock exchange on Monday of signing into law of its franchise bill or RA 11601, which grants it a 25-year franchise to establish, operate, and maintain a waterworks and sewerage system in the east zone service area of Metro Manila and the province of Rizal.
The revised concession agreement between MWSS and Maynilad was signed on May 18, 2021. That of Manila Water was signed on March 31, 2021. Their franchise confirms their status as a public utility. The new concession agreements were forged after the Philippine president called for a review of the original terms in January 2020.
On Monday, shares in Manila Water climbed 3.99% or 95 centavos to close at P24.75 each. DMCI Holdings shares jumped 2.53% or 20 centavos to close at P8.09 apiece. MPIC shares finished unchanged at P3.85 each. — VVS
