DETAILS

IDEALS vs PSALM
GR 192088, 9 Oct 2012
Petitioners: IDEALS et al
Respondents: PSALM et al

FACTS
PSALM is a GOCC created by virtue of the EPIRA
law. Said law mandated PSALM to manage
privatization of NPC. Sometime in August 2005,
PSALM commenced the privatization of the 246megawatt (MW) AHEPP located in San Lorenzo,
Norzagaray, Bulacan.
The Angat Dam and AHEPP are utilized for
power generation, irrigation, water supply and
flood control purposes.
K-Water was identified as the highest bidder.

ISSUES:
1. Was there a violation of Section 2, Art. XII of the
Constitution by the approval and confirmation of
the Notice of Award of bidding to the Korean
Corporation, K-Water?
2. Was there a violation of the Water Code
provisions on the grant of water rights?
3. Did PSALM comply with Sec. 47 (e) of the EPIRA
Law?

RULING:
1. Was there a violation of Section 2, Art. XII of the
Constitution by the approval and confirmation of
the Notice of Award of bidding to the Korean
Corporation, K-Water?
No. The sale of the government-owned AHEPP to a
foreign corporation is not prohibited. Filipino
citizens and corporations 60% of whose capital is
owned by Filipinos may be granted water rights.

RULING:
2. Was there a violation of the Water Code
provisions on the grant of water rights?
No. Under the Water Code concept of
appropriation, a foreign company may be said to
be appropriating our natural resources if it
utilizes the waters collected in the dam and
converts the same into electricity through artificial
devices. NPC remains in control of the operation of
the dam by virtue of water rights granted to it.

RULING:
3. Did PSALM comply with Sec. 47 (e) of the EPIRA
Law?
Yes. There is nothing in the EPIRA which declares that it is
mandatory for PSALM or NPC to transfer or assign NPCs
water rights to buyers if its multi-purpose hydropower
facilities as part of the privatization process.
There is no express requirement for the transfer of water
rights in all cases where the operation of hydropower
facilities in multi-purpose dam complex is turned over to