Section 1. Nature and Scope of Franchise. — Subject to the
provisions of the Constitution and applicable laws, rules and
regulations, there is hereby granted to First Gas Holdings Corporation,
its successors or assigns, hereunder referred to as the grantee, a
franchise to construct, install, own, operate and maintain for
commercial purposes and in the interest of the public, natural gas
pipeline system including pumping and compressing stations, metering
and measurement facilities, storage tanks, gas tanks, power plants,
shops, storehouses and other buildings, water supply and communication
systems, roads and such other equipment or facilities as may be needed
from time to time for the purpose of transporting and distributing
natural gas throughout the Island of Luzon.
Sec.
2. Prior Approval of the Department of Environment
and Natural Resources and the Department of Energy. — The grantee shall
secure from the Department of Environment and Natural Resources (DENR),
the Department of Energy (DOE), or any other government agency which
has jurisdiction over the operation of the herein franchise, the
appropriate permits and licenses for the construction, installation,
ownership, operation and maintenance of the said natural gas pipeline
system. The DENR, the DOE and other concerned government agencies shall
not unreasonably withhold or delay the grant of any such authority.
Sec.
3. Authority to the End Consumer and the Environment.
— The grantee shall at all times provide adequate, reliable and safe
service to the end consumers and shall conform to the highest
environment and safety standard as may be prescribed by the DOE, the
DENR with regards to Palawan gas, the Palawan Council for Sustainable
Development and such other appropriate agencies of the government.
Sec.
4. Right of Way and Construction. — For the purpose
of constructing, installing, operating and maintaining the pipeline
system, it shall be lawful for the grantee to make excavations and lay
pipes in any of the public lands, waters and properties, including
highways, streets, bridges and public works in any city or municipality
throughout the Island of Luzon: Provided, That any public land, water
and property, including highways, streets, bridges and public works
disturbed, altered or changed thereby shall be repaired, restored and
replaced in workmanlike manner by the grantee to the satisfaction of
the Department of Public Works and Highways (DPWH) or the local
engineering office, as the case may be, and in accordance with existing
laws and rules on excavation and reconstitution of such public works.
Sec.
5. Easement Over Public Land. — When rights or
easements of temporary occupancy over public land, water or property
including highways, roads, bridges and other public works are needed by
the grantee for the purpose of carrying out work 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: whenever rights or easement of
temporary occupancy over public land without existing infrastructure,
including foreshore lands are needed by the grantee in its operation,
such rights or permit for the use or occupation of said public lands
shall be granted by the DENR.
Sec.
6. Easement Over Private Land. — When easement or
temporary occupancy over private lands are needed by a grantee for the
purpose of carrying out work essential to its operations, the grantee
may enter into the necessary agreement with owner or legal occupant of
such private lands. If no agreement could be reached, or if the owner
or legal occupant refuses to grant such easement, or in general, when
any obstacle of whatever nature exist the immediate and certain
acquisition of the necessary area, or of any right indispensable to the
grantee for the purpose of the franchise, the regional trial court of
the city or province where the land is situated shall, upon application
and posting of the necessary bond therefor, authorize the grantee to
use and occupy the land needed by it in its operations, pending final
determination of the case which shall include among others the
reasonable value or rental of the land to be occupied and the
compensation for any resulting damage that the landowner or legal
occupant may suffer as a result of such operation.
Sec.
7. Eminent Domain. — 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:
Provided, That in case the owner refuses to sell or allow the use
thereof, the proper proceedings shall be instituted by the grantee,
posting therefor a bond as may be fixed and approved by the regional
trial court of the city or province where the land is situated. The
court shall issue an order allowing such right pending the final
determination of the proper amount that shall be paid by the grantee to
the landowner or legal occupant.
Sec.
8. Term of Franchise. — 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 commence the
exercise of any privileges granted herein within five (5) years from
the effectivity hereof.
Sec.
9. Acceptance and Compliance. — Acceptance of this
franchise shall be given in writing within sixty (60) days after the
effectivity of this Act. Upon giving such acceptance, the grantee shall
exercise the privileges granted under this Act. Nonacceptance shall
render the franchise void.
Sec.
10. Tax Provisions. — The grantee, its successors or
assigns, shall be subject to the payment of all taxes, duties, fees or
charges and other impositions under the National Internal Revenue Code
(NIRC) of 1997, as amended, and other applicable laws: Provided, That
nothing herein shall be construed as repealing any specific tax
exemptions, incentives or privileges granted under any relevant law:
Provided, further, That all rights, privileges, benefits and exemptions
accorded to existing and future natural gas distribution system
franchises shall likewise be granted to the grantee.
The
grantee shall file the return with the city or province where its
facility is located, and pay the taxes due thereon to the Commissioner
of Internal Revenue or his duly authorized representatives in
accordance with the NIRC and the return shall be subject to audit by
the Bureau of Internal Revenue.
Sec.
11. Warranty in Favor of National and Local
Government. — The grantee shall hold the national, provincial and
municipal governments of the Philippines harmless from all claims,
accounts, demands or actions arising out of accidents or injuries,
whether to property or to persons, caused by the construction,
installation, operation and maintenance of the pipeline system.
Sec.
12. Sale, Lease, Transfer, Usufruct, Etc. — The
grantee shall not lease, transfer, grant the usufruct of or sell 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, except to a wholly-owned
subsidiary of the grantee or to a corporation owned or controlled by
persons holding the controlling interest in the grantee. Any person or
entity to which this franchise is sold, transferred or assigned, shall
be subject to the same conditions, terms, restrictions and limitations
of this Act.
Sec.
13. Separability Clause. — If any of the sections or
provisions of this Act is held invalid, all the other provisions not
affected thereby shall remain valid.
Sec.
14. Repealability and Nonexclusivity Clause. — 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 the privileges herein
provided for.
Sec.
15. Effectivity. — This Act shall take effect fifteen
(15) days from the date of its publication, upon the initiative of the
grantee, in at least two (2) newspapers of general circulation in the
Philippines.
Approved:
January 11, 2001.
|