Republic of the Philippines

City Of Angeles
17th SANGGUNIANG PANLUNGSOD

ORDINANCE NO. 478, S-2019

(PO-1079-02-19)

AN ORDINANCE GRANTING BALIBAGO WATERWORKS SYSTEM, INC. (BWSI)

THE PERMIT TO OPERATE THE WATER SUPPLY IN THE BARANGAYS OF
BALIBAGO, AMSIC, MALABANIAS AND PULUNG MARAGUL.

WHEREAS, the Angeles City Government, which has the jurisdiction over the Angeles City, is
responsible for safeguarding the health of the people and the protection of the environment;

WHEREAS, the Sangguniang Panglungsod of Angeles City had already passed Ordinance No. 343,
S-2014 (hereinafter, “City Ordinance 343”), “An Ordinance Providing for the Water Quality and Septage
Management System in Angeles City”, which among other things: aims to utilize and manage local water
resources in a sustainable manner, to meet indefinitely the basic requirements for potable water for all
residents, and formulate a holistic local program of water quality management that recognizes that water
quality management issues cannot be separated from concerns about water sources and ecological
protection, water supply, public health and quality of life;

WHEREAS, Balibago Waterworks System, Inc. (hereinafter known as “BWSI”) is a private utility
corporation organized for the purpose of operating and maintaining a water supply and distribution system,
which is financially and technically capable of carrying out this purpose, and is in pursuit of its mission and
objective of operating and maintaining a sustainable community-oriented water supply and distribution
systems as may be required, justified and authorized;

WHEREAS, BWSI has been serving the potable water needs of the constituents in Angeles City,
specifically in Barangays Balibago, Amsic, Malabanias and Pulung Maragul (hereinafter known as the
“Service Area”) since it began operations in 1958 and has continuously expanded and improved its services
to these Barangays until the present;

WHEREAS, BWSI had been awarded a 50-year Congressional Franchise in 1963 which expired in
2013, but has also been operating by virtue of a Certificate of Public Convenience (CPC) first granted to it
by the National Water Resources Board (NWRB) in 1963 and has continually been renewed by NWRB
every five (5) years until the present time;

WHEREAS, BWSI, pursuant to its commitment to provide its customers in the Service Area with
the best water service, has plans of investing in multiple large scale surface water projects that will ensure
the sustainability of water supply for the long-term;

WHEREAS, BWSI is committed to complying with the Angeles City Ordinance 343 and provide
water supply which will also require heavy investments on the part of BWSI;

WHEREAS, BWSI may continue to operate within the Service Area by the mere virtue of the CPC
issued by the NWRB, however, it has taken upon itself to initiate this Agreement with the Angeles City
Government for the granting of a Twenty-Five (25) Year Permit-to-Operate to justify all its financial
investments for all the surface water supply;

WHEREAS, the Angeles City Government recognizes the laudable efforts of BWSI in ensuring
basic services such as water supply are consistently provided to Angeles City;

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 WHEREAS, the Angeles City Government is willing to enter into this Agreement with BWSI to
create a strong partnership and harmonious working relationship in the fulfillment of the objectives outlined
in City Ordinance 343 for the benefit of the constituents in Angeles City;

NOW THEREFORE, be it ordained by the Sangguniang Panglungsod of Angeles City that:

Section 1. GRANT OF RIGHTS – The Angeles City Government, as the sole local authority embodying
the powers, responsibilities, and laws duly promulgated by the local government of the Republic of the
Philippines, grants to BWSI the sole and exclusive right and responsibility to:

a. Design, construct, commission and maintain a complete waterworks system in the Service Area,
and to conduct and carry out the necessary capital expenditures such as, but not limited to well
drilling, pipe laying, construction of storage tanks, pump houses, filtration systems, water
treatment plants and any other waterworks facilities or works necessary to render reliable and
adequate water service to the said area;

b. Introduce, establish and construct improvements which BWSI will own manage, maintain and
operate absolutely;

c. Render reliable and adequate water service to the said area in conformance to duly approved
standards and regulations of the National Water Resources Board (NWRB) and other government
agencies;

d. Bill and collect payment from the serviced customers for all services rendered;

e. Utilize all water resources within the territorial jurisdiction of Barangay Balibago such as but not
limited to catchment areas, watersheds, springs, wells, reservoir and other water sources;

Section 2. FREEDOM OF OPERATIONS – The Angeles City Government grants to BWSI the full
power and authority to autonomously and freely deal with its customers in the conduct of its business and as
the NWRB deems appropriate, provided that the vested rights of the Angeles City Government are not
compromised, undermined or affected.

Section 3. SERVICE AREA – The Angeles City Government grants unto BWSI an exclusive Permit-to-
Operate to service all the barangays within the Service Area, namely: Barangays Balibago, Santol,
Malabanas, Pulung Maragul, Amsic, Diamond Subdivision, Pulung Bato, and Abacan all located in
Angeles City.

Furthermore, the Angeles City Government, through its vested power and authority, shall help and assist
BWSI in negotiating and securing rights of way and easement within the Service Area relating to the
waterworks facilities and/or access to such facilities so that BWSI may perform its obligations under this
Agreement. Specifically, the Angeles City Government shall provide the needed and required local
excavation and construction permits for BWSI to undertake its planned investments to improve its service
in the Service Area.

Section. 4 PERIOD – The period of agreement is TWENTY-FIVE (25) YEARS from March 2019 to
March 2044.

Section 5. EXPIRATION / TERMINATION AND RENEWAL – After the Twenty-Five (25) Year
period, this Agreement may be renewed for another period that the Angeles City Government and BWSI
will mutually agree upon, provided that:

a. The people within the Service Area are satisfied with the water service provided by BWSI;

b. The Angeles City Government is amenable to the RENEWAL of this agreement;

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 c. After Twenty (20) Years or before the turn over, the system should be inspected and rehabilitated
if necessary.

In the event that there is a failure to agree on the renewal of this agreement, the Angeles City
Government shall have the option to form or appoint a capable agency of the local government,
hereinafter referred to as the “SUCCEEDING PARTY”, to assume the management, operations and
ownership of the waterworks system subject to the payment of a fair market value for all or some of
the fixed assets owned or introduced by BWSI, except for:

i. Any property such as but not limited to land, equipment, and pipelines which are donated by a
government agency to BWSI during the term of this Agreement;

ii. Any fixed asset, which may be deemed fully depreciated or no longer practical, to be removed
by BWSI in the event that the SUCCEEDING PARTY decides not to acquire the same.

Should the Angeles City Government fail to appoint or form the SUCCEEDING PARTY and after the
expiration of this Agreement opts to have the system maintained and operated by a private firm, BWSI
shall have the priority right, assuming that the same terms and conditions are offered by other
negotiating / competing parties to re-negotiate with the Angeles City Government for the continuance
of its operation subject to the terms and conditions agreed upon.

Section 6. SERVICE FEE – The SECOND PARTY shall pay the Angeles City Government a Service Fee
of THIRTY-FIVE CENTAVOS (PhP 0.35) per cubic meter of water sold and paid in the Service Area and
is subject to appropriate increases proportional to tariff escalations.

Section 7. TARIFFS –BWSI shall be allowed to bill/invoice and collect payment from its customers for
services rendered, which rates shall also be supported by approval from the National Water Resources
Board (NWRB) and with advice to the Angeles City Government before implementation of any rate
increase.

Section 8. TITLES – The title to the entire waterworks facility procured by BWSI in the performance of its
obligations under this Agreement shall not pass to the Angeles City Government and shall remain the
absolute property of BWSI regardless of expiration other than that provided for in Section 5 (Renewal).
Further, the Angeles City Government shall have the full authority to create and provide security over the
waterworks facilities.

Section 9. WARRANTIES

a. The Angeles City Government hereby represents, warrants and undertakes to BWSI that at the date
of this Agreement:

i. It is duly organized and existing local government of the Republic of the Philippines;

ii. It has the full power and authority to enter into this Agreement;

iii. It has taken all necessary action for the authorization of its entry into this Agreement;

iv. This Agreement will be enforceable in accordance with its terms under Philippine law
without any requirement for further action to be taken by any party or any third party;

v. It shall not create any rule, ordinance or resolution to the effect of impairing the ability of
BWSI to fulfill its obligations under this Agreement.

b. BWSI hereby represents warrants and undertakes to the Angeles City Government that at the date
of this Agreement:

i. It is a corporation duly established under the law of the Philippines;

ii. It has full power and authority to enter into this Agreement;

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 iii. It has taken all necessary action for the authorization of its entry into this Agreement and
the performance of its obligations under this Agreement;

iv. It shall provide a dependable 24-hour water service;

v. It shall provide adequate water pressure of at least 16 psi;

vi. It shall ensure that the supplied water is chlorinated potable water;

vii. It shall ensure that the supplied water will be subject to monthly laboratory tests against
microorganisms;

viii. It shall program the replacement of rusty pipes to eliminate rusty-colored water;

ix. It shall expand the water services to areas within its Service Area that have not yet been
served, provided the expansion is economically feasible;

c. Further, BWSI commits to undertaking the following improvements and investments in the water
supply and distribution system:

i. Energization of the Don Manual Pumping Station located in Sitio Maligaya, Pulung
Maragul and the Hensonsville Pumping Station located in Hensonville Subdivision;

ii. Construction of 500 cum reservoirs in Don Manuel Pumping Station and Metro Clark
Pumping Station;

iii. Total Pipe Rehabilitation of Service Area amounting to more or else PhP210 Million to be
undertaken from 2019 to 2023;

iv. Arayat Bulk Water Supply amounting to more or else PhP200 Million to be fully energized
by 2021;

v. Bulk Water Supply from Abacan River and Pasig Potrero River amounting to more or less
PhP1.5 Billion to be fully energized by 2022;

vi. Decommissioning of the Diamond Pumping Station and Rosanna Pumping Station by 2020;

d. The Angeles City Government and BWSI hereto represented and warranted the power and
authority, and legal right to execute this agreement and perform their respective obligations.
PROVIDED, that this agreement is the law between the parties and constitutes the legal, valid,
subsisting and binding obligation of the parties hereto enforceable in accordance with the
foregoing agreed terms.

Section 10. FORCE MAJEURE (Man Made)/FORTUITOUS (Act of God) EVENTS

a. A “Force Majeure/Fortuitous Event” shall mean any event or circumstance or combination of

events or circumstances that wholly or partly prevents or unavoidably delays any part in
performance of its obligations under this Agreement, but not only if and to the extent that such
events and circumstances are not within the reasonable control, directly or indirectly, of the
affected party and could not have been avoided if the affected party had taken reasonable care. In
this case, the Angeles City Government nor BWSI should not be liable for the force majeure. Force
Majeure/Fortuitous Event includes the following events and circumstances to the extent that they,
or their consequence, satisfy the above requirement and paragraphs b and c.

i. Any form of government occurrence that may render any or both the Angeles City
Government and BWSI incapable of fulfilling their obligations in this Agreement; or

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 ii. Any act of water (whether declared or not), invasion, armed conflict or act of foreign
enemy, blockade, riot, terrorism or exercise of military power; or

iii. Any earthquake, flood, fire, hurricane or any other act of God or natural environmental
disaster wherever occurring; or

iv. Any condition of and circumstance affecting the site of the facilities (including but not
limited to soil, subsurface, environmental, geological, seismic, geotechnical, climactic,
hydrological conditions and the existence of underground obstructions, fossils, antiquity
structures and archeological remains); or

v. Inadequate source of water of BWSI (but only to the extent that such inadequate supply
does arise from a breach by BWSI of its obligations under this Agreement); or

vi. Any failure of the water extracted from the water resources by BWSI to meet the raw
water standards of the Philippines (but only to the extent that such failure does arise from a
breach by BWSI of its obligations under this Agreement); or

vii. Any extended interruption in the supply of electricity to the serviced area;

viii. Any event or circumstance analogous to the foregoing.

b. If any of the following circumstances occur during the Period of this Agreement, BWSI shall not
have the right to consider any of them to be a Force Majeure/Fortuitous Event that would suspend
the performance or excuse the non-performance of its obligations under this Agreement.

i. Any patent or latent defects in any part of the new facilities; and

ii. Breakdown or ordinary wear and tear of the facilities.

c. The Angeles City Government shall not have the right to consider any Government Occurrence or
any event referred to in sub-paragraph a. v, vi, or vii of this Clause 10 to be a Force
Majeure/Fortuitous Event that would suspend the performance or excuse the non-performance of
its obligations under this agreement.

d. As such, and subject to paragraphs a, b and c of this Clause, no party shall be considered to be in
default under this Agreement when and to the extent that performance of obligations under this
Agreement is prevented whether wholly or partly, by any circumstance of any Force
Majeure/Fortuitous Event which arises after the date of this Agreement and each party shall be
entitled to suspend performance of its obligations to the extent that such party is prevented wholly
or in part in carrying out its obligations under this Agreement.

e. Furthermore, if any party shall rely on the occurrence of the event or condition as a basis for being
excused from performance of its obligations under this Agreement, then the party relying on the
event or condition shall

i. Provide prompt notice to the other party of the occurrence of the event or condition giving
an estimation of its expected duration and the probable impact on the performance of its
obligations hereunder;

ii. Exercise all reasonable efforts to continue to perform its obligations hereunder;

iii. Expeditiously take action to correct or cure the event or condition excusing performance;

iv. Exercise all reasonable effort to mitigate or limit damages to the other party to the extent
such action will not adversely affects its own interests;

v. Provide periodic notices to the other properties with respect to its action and plans for
actions and render prompt notice to the other party of the cessation and the event or
condition giving rise to it being excused from performance.

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 vi. Be likewise held free and harmless from any obligation resulting from the occurrence
beyond the control of both parties, or the event is not the fault of both or either parties.

Section 11. EVENTS AND REMEDIES OF DEFAULT

a. Each of the following shall, to the extent that it is not caused by the default of the Angeles City
Government or any act or omission of any Government Entity or a Force Majeure/Fortuitous Event
and is not remedied within the time period permitted (if any), be a BWSI EVENT OF DEFAULT
and entitle the Angeles City Government to issue a Notice of Intention to terminate immediately;

i. BWSI fails to provide services of sufficient standard that there is a widespread danger to
the health of the public in the serviced area and such failure continues for 30 days after
written notice from the Angeles City Government to BWSI requesting that such a failure
be cured; or

ii. BWSI fails to perform or fulfill its obligations and such failure continues for 180 days
after written notice for the Angeles City Government to BWSI requesting that such failure
be cured; or

iii. BWSI becomes financially insolvent.

b. In an event that the Angeles City Government fails to perform any of its obligations under this
Agreement in a material respect and such failure continues for 45 days after written notice from the
BWSI to the Angeles City Government requesting that such failure be remedied; and, if such non-
performance is not caused by a default of BWSI or a Force Majeure/Fortuitous Event, an Angeles
City Government EVENT OF DEFAULT shall be declared and shall thus entitle BWSI to issue a
Notice of Intention to terminate immediately.

c. If a Force Majeure/Fortuitous Event occurs either:

i. For a period exceeding 180 calendar days, or

ii. For an aggregate of more than 180 calendar days over any period of 360 calendar days
then BWSI may terminate this Agreement by issuing a Termination Notice at any time
after the 180-calendar day period has expired.

Section 12. CONSEQUENCE OF DEFAULT – If any Event of Default occurs and due notice of intent to
terminate has been issued to the defaulting party, both the Angeles City Government and BWSI shall cease
to perform their obligations herein stated in this Agreement. Thereafter, both parties shall agree on the
following terms:

a. Should the Event of Default occur before BWSI has completely recovered its investment, the
Angeles City Government shall:

i. Allow BWSI to operate the water system with due assistance and approval, until such time
it would have completely recovered its investment, as well as repay all loans incurred in
the conduct of business; or

ii. Procure all assets of the waterworks system from BWSI based on terms mutually agreed
upon by both the Angeles City Government and BWSI, and insofar as BWSI shall be able
to recover its investment, and repay all loans incurred in the conduct of business.

b. If the investment of BWSI would have been completely recovered at any time or within the
occurrence of the Event of Default, BOTH PARTIES shall follow the conditions stated in Section
5 (Renewal) in the turnover of the waterworks facilities.

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Section 13. CONFIDENTIALITY – Each of the parties shall treat all documents and other information
whether written or oral and whether technical or commercial, supplied to them by or on behalf of any other
party to this Agreement, relating to the facilities and shall not, without the prior written consent of the other
party or as required by law, the regulations of any international stock exchange or recognized procedural
practice and except in the case of information given to the lenders, or any direct or indirect parent
corporation.

BWSI or any shareholder thereof, neither disclose to any third party the whole or part of any such document
or information nor shall otherwise communicate the same unless for the purpose of complying with the
terms of this Agreement.

However, BWSI and its contractors shall be entitled to disclose to any of their employees, advisers and
contractors all documents and other information as may be necessary for the performance of their respective
obligations, but they shall not cause or permit any of these persons to disclose any document or information
made available to them except as maybe necessary for such performance.

Section 14. ASSIGNMENT

a. The Angeles City Government shall not assign or otherwise transfer all or any of their rights or
obligations under this Agreement without the prior written consent of BWSI.

b. BWSI may, with the consent of the Angeles City Government:

i. Delegate, assign and/or sub-contract any of its rights or obligations under this agreement;
or

ii. Assign, transfer or create security over all or any benefit of this Agreement for the
purposes of the financing or refinancing of the Company. Without prejudice to the terms
of any agreement entered into, all other assignment or transfer by BWSI of its rights and
obligations under this Agreement shall require the prior written consent of the Angeles
City Government such consent not to be unreasonably withheld or delayed.

Section 15. RATIFICATION / CONFIRMATION – This agreement becomes effective and enforceable
upon ratification/confirmation by the Sangguniang Panlungsod as required under the Local Government
Code of 1991.

BOTH PARTIES hereto represented and warranted the power and authority and legal right to execute this
Agreement constitutes the legal, valid, subsisting and binding obligation of the parties hereto enforceable in
accordance with agreed term.

Section 16. MISCELLANEOUS PROVISIONS

a. CUMULATIVES RIGHTS – Any right or remedy conferred by this Agreement upon both the
Angeles City Government shall not be exclusive of any other rights or remedy of both parties,
whether under this Agreement or provided or permitted to both parties at law or in equity, but each
right or remedy shall be cumulative of very other right or remedy available to both parties.

b. NO WAIVER – The failure of either party to this Agreement to insist upon the strict performance
of any of the terms and conditions of this Agreement shall not be construed as a waiver thereof or
of any other terms and conditions of this Agreement, but the same shall continue and remain in full
force and effect as if no such forbearance or waiver had occurred.

c. BINDING EFFECT – Except as otherwise expressly provided, this Agreement shall inure to the
benefit of and be binding upon each party thereto, and their respective successors and assigns.

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 d. ENTIRE AGREEMENT – This Agreement contains the entire agreement of the parties concerning
the subject matter hereof and shall, as of the effective date hereof, supersede all previous
understandings and agreements, whether oral or written, between the parties on the subject.

e. NOTICES – Any notice or communication required to be given hereunder shall be deemed to have
been given when sent by messenger, telegram, or by registered mail to the addressee at its address
herein indicated or such other address as the parties may subsequently designate.

f. AMENDMENT OR MODIFICATION OF THE AGREEMENT- Any amendment or modification

of this Agreement, or any additional obligation assumed by either party in connection with this
Agreement, shall be binding only if in writing and signed by the authorized representatives of the
parties.

g. SEPARABILITY CLAUSE – In the event that any one or more of the provisions of this
Agreement are declared invalid, illegal, or unenforceable, such provisions shall be deemed stricken
out, and the invalidity, illegality, or unenforceability of these provision/s shall not affect the rest of
the Agreement, which shall remain in full force and effect.

h. VENUE OF ACTION – All actions or proceedings arising out of or in connection with this
Agreement shall be brought exclusively before the courts of Angeles City, Pampanga.

Section 17. AUTHORIZATION – The Sangguniang Panglungsod of Angeles City hereby

authorizes the Angeles City Mayor, Hon. Edgardo Pamintuan, to sign the Memorandum of
Agreement by and between the Angeles City Government and BWSI.

Section 18. EFFECTIVITY - This Ordinance shall take effect immediately upon approval and
publication in a newspaper of local circulation.
______________________________________________________________________________
Sponsored by Councilors Amos B. Rivera, Jeremias M. Alejandrino, Jesus S. Sangil,
Jericho G. Aguas, Danilo D. Lacson, Edgardo D. Pamintuan, Jr. and Alexander P. Indiongco

Seconded by Councilors Carmelo G. Lazatin, Jr., Joseph G. Ponce, Arnoah Prince D. Mandani and
Jae Vincent T. Flores
________________________________________________________________________________
UNANIMOUSLY APPROVED by the Members Present: Councilors Jericho G. Aguas, Edgardo
D. Pamintuan, Jr., Carmelo G. Lazatin, Jr., Alexander P. Indiongco, Danilo D. Lacson, Joseph G. Ponce,
Jesus S. Sangil, Amos B. Rivera, Jae Vincent T. Flores, Jeremias M. Alejandrino and Arnoah Prince D.
Mandani during Special Session No. 03 held on March 28, 2019.

Approved by His Honor, the City Mayor on ____________________.

APPROVED:

ATTY. EDGARDO D. PAMINTUAN ATTY. BRYAN MATTHEW C. NEPOMUCENO

City Mayor City Vice Mayor & Presiding Officer

ATTESTED:

LEONARDO KIRK I. GALANZA ATTY. MARK PHILIP B. LUMBOY

Executive Assistant V Department Head II/City Secretary