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 246-megawatt (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.
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:
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 the private sector.
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:
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.