FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
7 J& -3 iilQ 141 
S E N A T E  
Senate Bill No. 701 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
The railway system signaled the dawn of modern civilization, as we know 
it. With the creation of this mass public transport system - still significant 
incidentally despite development of other public transport systems today as a 
result of breakthroughs in transport technologies - certain social and economic 
activities have become possible, paving the way for increased and enhanced 
interaction of the people across the land whether for business, social and 
practical purposes. 
Unfortunately, our national railway system seems to have taken a back 
seat, not been fully utilized, if not maximized, and neglected despite its 
importance in the country' s socio-economic development initiatives. 
To begin with, the current mandate given to the Philippine National 
Railway and Light Transit Authority is insufficient in terms of empowering the 
agency with the needed powers and functions to truly modernize our railway 
system, which in sum, cripples our public transport initiatives and hinders 
whatever infrastructure programs that need to be significantly implemented. 
The proposed measure aims to address this concern. Through the 
establishment of a new agency, called the "National Railway Authority," replete 
with appropriate powers and functions and provided for with adequate funds, the 
measure shall finally be able to promote, accelerate and develop an integrated 
national railway system that will in turn provide and maintain an adequate, 
efficient, inexpensive, convenient and reliable public transport system responsive 
to the various needs of the people. 
Hence, immediate passage of this proposed measure is earnestly sought. 
ESTRADA 
Senator 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
7 JUL -3 !%I 
:Bt 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
Senate Bill No. 
701 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
ACCELERATING THE DEVELOPMENT OF A NATIONAL RAILWAY SYSTEM, 
CREATING FOR THE PURPOSE THE NATIONAL RAILWAY AUTHORITY, 
PRESCRIBING ITS POWERS, FUNCT IONS AND DUTIES 
Be it enacfed by the Senate and House of Representatives of fhe Philippines in 
Congress assembled: 
SECTION 1. Short Title. - This Act shall be known as the "National 
Railways Act. " 
SEC 2. Declaration of Policy - It is hereby declared the policy of the 
State to promote, accelerate and develop an integrated national railway system 
to provide and maintain an adequate, efficient, inexpensive, convenient and 
reliable public transport system responsive to the needs of the citizenry for the 
socio-economic development of the country. 
SEC 3. Creation of the National Railway Authority - There is hereby 
created a corporate body to be known as the National Railway Authority, 
hereinafter referred to as the "Authority". It shall have its principal office in the 
Metropolitan Manila Area, but may establish branches and agencies elsewhere 
within the country, as may be necessary for the proper conduct of its business 
and discharge of its functions. It shall be under the direct control and supervision 
of the Ofice of the President. 
SEC. 4. Functions of the NRA. - The Authority shall have the following 
functions: 
(a) Formulate and adopt a comprehensive development plan for a national 
railway system with ecological and environmental standards; 
(b) Promote and encourage the active participation of the private sector, 
both local and international, in the development and implementation of a 
comprehensive development plan; 


(c) Implement or cause the implementation of the national railway plan, 
policies and programs according to a schedule of priorities consistent with 
the needs and available resources; 
(d) Control and develop, construct, operate and maintain railway facilities 
including parking stations and terminals for freight, goods and cargoes; 
(e) Regulate the schedule, frequency, routing and pricing of railway 
services; and 
(9 Call upon any government agency for such assistance as may be 
necessary in the discharge of its duties and functions. 
SEC 5. General Powers of the NRA - The NRA will also have the 
following: 
(a) To have continuous succession under its corporate name; 
(b) To sue and be sued; 
(c) To adopt, alter and use a corporate seal; 
(d) To amend, and repeal its By-Laws; 
(e) To acquire, own, hold, administer, and lease such real or personal 
property as it deems necessary or convenient in the transaction of its 
business and to lease, mortgage, sell, alienate or otherwise dispose of 
any such real or personal property held by it; 
(f) To enter into any obligation, assign or accept the assignment of, and 
rescind any agreement or contract necessary or incidental to the proper 
functioning of the Authority; 
(9) To contract loans, indebtedness, and credit accommodations, in any 
local or convertible foreign currency, from any international financial 
institutions, foreign government entities, and local or foreign private 
commercial banks or similar institutions under terms and conditions 
prescribed by law, rules and regulations, and to issue commercial papers 
and bonds in connection therewith. 
(h) To invest its funds and other assets in such areas it may deem proper 
in the course of its operations; 
(i) To construct, own, lease, operate and maintain public utilities, 
infrastructure facilities and such auxiliary support services needed to 
develop and operate and maintain a national railway system; 
(j) To design, construct, maintain, and operate by itself or by delegation to, 
or through contractual arrangement such auxiliary infrastructure support 
facilities as, but not limited to, parking structures above or below 
ground,including the means of access; 
(k) To fix rates of railway transportation fee; 
(I) To regulate rates of fees, such as but not limited to, parking fees, 
porterage fees and such other fees levied in relation with the use of the 
railway sys tern; 


(m) To prescribe, fix and regulate the route of railway transport; 
(n) To receive donations, grants- bequests and assistance of all kinds and 
to utilize the same; 
(0) To exercise the right of eminent domain in the name of the Republic of 
the Philippines and in file acquisition of real estate by excess 
condemnation or escheat proceedings, including appurtenant properties. 
The title thereto shall be registered in the name of the Government and 
thereupon all such properties shall be entrusted to the Authority as agent 
of the Government; 
(p) To form, establish, organize, and maintain subsidiary corporations or 
joint ventures formed in accordance with the Philippine Corporation Code, 
to encourage public and private sector participation in the development of 
the rail way system; 
(4) To privatize any part or all of the railway system or any subsystem 
under the Authority, in accordance with the law; 
(r) To promulgate such rules and regulations as may be necessary to 
carry out the objectives of this Act; and 
(s) To perform such other powers as may be necessary to carry out the 
purposes of this Act. 
SEC 6. Conduct of Comprehensive Studies - The Authority, in 
coordination with such other government agencies as may be necessary, shall 
undertake comprehensive studies for the rehabilitation and/or construction of, but 
not limited to, such railway lines extending from San Fernando, La Union to 
Laoag, llocos Norte; from Laoag, llocos Norte to Metro Manila passing through 
Cagayan, Isabela, Nueva Vizcaya, Nueva Ecija, and Bulacan; southline rail 
extension from Comun, Camalig, Albay to Matnog, Sorsogon through. Bulan, 
Sorsogon; a Libmanan-Daet line, a railway line from lloilo City to Roxas City in 
Panay and a line from lligan City to Cagayan de Oro City in Mindanao. 
SEC 7. Board of Directors. - The powers of the Authority shall be vested 
in and exercised by a Board of Directors, hereinafter referred to as the "Board", 
which shall be composed of seven (7) members to be appointed by the President 
of the Philippines. 
The Chairman and three (3) members of the Board shall serve for four (4) 
years while the remaining three (3) members shall serve for three (3) years. Any 
member of the Board may be suspended or removed by the President of the 
Philippines at any time for cause. In the event of a vacancy in the Board, the 
appointees shall serve the unexpired term of the predecessor. 
No member of the Board shall be appointed unless he is a natural-born 
citizen, of the Philippines, at least thirty-five (35) years of age, of good moral 
character, competent and experienced in one or more of the following fields: 
transport planning, engineering, economics, management, finance, corporate 
and transportation law, and marketing. 


The Chairman of the Board shall be designated by the President from 
among the members of the Board. 
SEC 8. Powers and Functions of the Board. - The Board shall have the 
following powers and functions: 
(a) To formulate policies, plans and programs, projects, rules and 
regulations to carry out effectively the functions of the Authority; 
(b) To direct the management, operations and administration of the 
Authority; 
(c) To create offices or positions necessary for the efficient operation of 
the Authority; to appoint and fix the remuneration and other emoluments of 
subordinate officers and personnel of the Authority in accordance with the 
Revised Compensation and Position Classification System, and to remove 
or otherwise discipline such officerslemployees for cause in accordance 
with Civil Service Rules and Regulations; 
(d) 
Establish 
financial 
and 
operations performance 
targets for 
management as basis for evaluating and monitoring corporate 
performance; 
(e) To authorize such expenditures as are in the interest of the effective 
and efficient administration and operations of the Authority; 
(9 To exercise such other powers as may be necessary to accomplish the 
purposes for which the Authority was organized. 
SEC 9. Management - The general conduct of the operations and 
management of the Authority shall be vested in a President who shall serve as 
the Chief Executive Officer primarily responsible for carrying out the program of 
the Authority and the policies of the Board. 
The Presidenuchief Executive Officer must be natural-born citizen, at 
least thirty-five (35) years of age on the day of the appointment, of good moral 
character and with recognized executive ability and competence in the field of 
transportation, business administration, management, finance or law. ShelHe 
shall be appointed by the President of the Republic of the Philippines and shall 
serve for a term of six (6) years. 
SEC 10. Duties and Responsibilities of the President - The 
PresidentlChief Executive Officer of the Authority shall have the following duties 
and responsibilities: 
(a) To execute, administer and implement the policies, programs, plans, 
guidelines, decisions, rules and regulations issued and adopted by the 
Board; 
(b) To direct and supervise the operations and administration of the NRA; 
(c) To determine, with the approval of the Board, the staffing pattern and 
the number of personnel of the NRA; 


(d) To direct and supervise the preparation of the agenda for the meeting 
of the Board, and to submit for the consideration of the Board such 
policies and measures as he believes necessary to carry out the purposes 
and objectives of this Act; 
(e) To represent the Authority in all dealings with other offices, agencies 
and instrumentalities of the Government and with all persons and entities, 
public or private, domestic or foreign; and 
(9 To exercise such other powers and functions as the Board may assign 
or authorize. 
SEC 11. Public Accountability. - To ensure public accountability, the 
Authority shall be subject to the audit of the Commission on Audit (COA) and 
shall comply with all the generally accepted accounting and auditing rules and 
regulations and those which it may hereafter promulgate in pursuance of its 
Constitutional Mandate. 
SEC 12. Merit System. - All officials and employees of the Authority shall 
be selected and appointed on the basis of merit and fitness in accordance with 
the comprehensive and progressive merit system to be established by the 
Authority immediately upon its organization in accordance with Civil Service law, 
rules and regulations. The recruitment, transfer, promotion, and dismissal of all 
its personnel including temporary workers shall be governed by such merit 
system. 
SEC 13. Prohibition Against Issuance of Restraining Orders and 
Preliminary Injunctions or Preliminary Mandatory Injunctions - No court in 
the Philippines, except the Supreme Court, shall have the jurisdiction to issue 
any restraining order, preliminary injunction, or preliminary mandatory injunctions 
in any case, dispute, or controversy involving any contract or project involving the 
NRA, to prohibit any person or persons, entity or government official from 
proceeding with, or continuing the execution or implementation of any such 
contract or project, or pursuing any lawful activity necessary for the execution, 
implementation or operation of such contract or project. 
SEC 14. Abolition of the Philippine National Railways and the Light 
Rail Transit Authority -- The Philippine National Railway and the Light Rail 
Transit Authority are hereby abolished. Their powers and functions, balance of 
appropriations and all applicable funds, records, assets, and property are 
transferred to and absorbed by the Authority. The Authority shall succeed to all 
rights and assume all contracts and liabilities of the herein abolished agencies in 
accordance with the Auditing code and other pertinent laws, rules and 
regulations. 
The existing qualified personnel of me Philippine National Railways and 
Light Rail Transit Authority covered by Civil Service law, rules and regulations 
shall be absorbed by the Authority. Those incumbents whose positions are not 
included therein or who are not re-appointed shall be deemed separated from the 
service or retired under existing laws and regulations. 


SEC 15. Applicability of the Corporation Law - Insofar as they are not 
inconsistent with this Act, the provisions of the Corporation Law shall be 
applicable to the operations of the Authority. 
SEC 16. Congressional Oversight Committee - A Congressional 
Oversight Committee is hereby created, composed of the Chairpersons of the 
Committee on Public Services and the Committee on Government Corporations 
of the Senate and the Chairpersons of the Committee on. Transportation and 
Communications and the Committee on Government Enterprises and 
Privatization of the House of Representatives and four (4) additional members 
from each House, to be designated by the Senate President and the Speaker of 
the House of Representatives, respectively. The Oversight Committee shall, 
among others, monitor and ensure the effective implementation of this Act. 
SEC 17. Separability Clause - If any of the provisions of this Act is 
declared invalid, the provisions thereof not affected by such declaration shall 
remain in force and effect. 
SEC 18. Repealing Clause. - The provisions of Republic Act No. 41 56, as 
amended, Republic Act No. 6366, Presidential Decree No. 741, Executive Order 
No. 603 and Executive Order No. 210, are hereby repealed. All other laws, 
decrees, orders, proclamations, rules and regulations or parts thereof 
inconsistent with any of the provisions of this Act are hereby repealed, amended 
or modified accordingly. 
SEC 19. Effecfivify Clause. - This Act shall take effect fifteen (15) days 
following its publication in at least two (2) newspapers of general circulation. 
Approved,