Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

Oy 148

House Bill No.

Introduced by Hori, Francis Gerald Aguinaldo Abaya

EXPLANATORY NOTE

\
The huge financial requirements of the government's “development
programs cannot be adequately sustained by its yearly budget. The
government, therefore, have thought it necessary to seek out alternative
sources of financing to ensure the prosecution of certain desirable
infrastructure projects that complement the over-all national development
efforts. Thus was born the BOT Law, based on the declared policy of the
State which recognizes the indispensable role of the private sector as the
main engine for national growth and development and provides the most
appropriate incentives to mobilize private resources for the purpose of
financing the construction, operation and maintenance of infrastructure and
development projects normally financed and undertaken by the government.

The BOT Law, however, has done very little insofar as construction of
roads is concerned. For more than twenty years after the construction of the
north and south expressways, there has been little progress in the
construction of other major highways. So far, there had been few proponents
on road construction through the BOT scheme. The private sector has been
observed to be very timid. They tend to shy away and would come in only
When the project is clearly very lucrative. Cases in point are the private
investors undertaking the Coastal Road and the South Skyway projects.
These investors are, for sure, not by themselves financially self-sufficient.
They also have to secure loans or borrow from various financial institutions to
finance their projects. But they found the said projects lucrative or "sure-hit”
projects’ where they are sure of realizing huge profits aside from the added
incentives, like the reclamation component granted to the Coastal Road
project proponent, provided by the Government under the BOT Law.



If a private or foreign investor who have to secure Inans or borrow
funds can undertake the construction or rehabilitation of ai infrastructure
project, maintain and operate it, collect toll fees for its use, pay its obligations
and yet derive huge profits over a short period of time, .why can't the
Government do it? Indeed the Government, whose only| motivation is
“service”, as contrasted to the private investor's “profit” is t\elieved more
acceptable and beneficial in undertakings like this. Given the satne amount of
financing, the Government can definitely construct more kilometers of roads
than a private investor.

In view of the foregoing, this proposed Bill seeks to establish or create
a corporate body which will be under the’ Office of the President and to be
called the “Road Development Authority’, hereinafter referred to as the
Authority. The Authority shall be charged primarily for the construction and/or
rehabilitation, maintenance “and operation of selected and desirable
infrastructure projects that complement the over-all national development
efforts, where there are no takers from the private sector. The Authority shall
be vested the power to raise and/or borrow the necessary funds from local
and international financial institutions for the purpose of financing its projects
and programs. In addition, the Authority shall be allowed to collect just and
reasonable tolls, fees, rentals or charges for the use of said infrastructure
projects such as but not limited to national highways, roads, bridges and
public thoroughfares in order to pay for its obligations with its local or
international financiers.

The creation or establishment of the Road Development Authority
hopes to achieve the following objectives:

a. To maximize efficiency and economy in the construction of major
highways, roads, bridges and public thoroughfares;

b. To ensure prosecution of certain infrastructure projects that
complement the over-all national development efforts;

c. To ensure fast and safe movement of people, goods and services
along major roads and highways to various points in the country;

d. To allow the Department of Public Works and Highways to
concentrate its infrastructure projects in the rural areas.

For the foregoing reasons, the early passage of this Bill is earnestly

sought.
Loewen. Koa
FRANCIS GERALD AGUII

Representative, First Distri



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon city

SIXTEENTH CONGRESS
First Regular Session

1 Ag
House Bit'No,__ 146

Introduced by Hon. Francis Gerald Aguinaldo Abaya

AN ACT
CREATING A ROAD DEVELOPMENT AUTHORITY,
PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Title - This Act shall be known as the “Road
Development Act of 2013"

SECTION 2. Declaration of Policy - It is hereby declared the policy
of the State to implement an integrated program for the planning,
development, financing, construction, maintenance and operation of major
highways and public thoroughfares all over the country to spur economic
development.

SECTION 3. Creation of the Road Development Authority - There
is hereby created a body corporate to be known as “Road Development
Authority”, hereinafter referred to as “Authority”, which shall be attached to the
Office of the President and charged primarily for the construction and/or
rehabilitation, maintenance and operation of selected and desirable
infrastructure projects that complement the overall national development
efforts, where there are no takers from ‘the private sector. The principal
office of the Authority shall be located in Metropolitan Manila, but it may
establish offices elsewhere in the Philippines as may become necessary for
the proper and efficient conduct of its business.


SECTION 4. Powers and Functions of the Authority- a). The
corporate powers of the Authority shall be as follows:

(i) To succeed in its corporate name;
(ii) To sue and be sued in such corporate name;

(iil) To adopt, alter, and use a corporate seal which shall be judicially
noticed;

(iv) To create or alter its own organization and staff such an
organization with appropriate and qualified personnel in accordance with what
may be deemed proper and necessary to achieve the objectives of the
Authority;

(v)_ To make or enter contracts of any kind or nature to enable it to
discharge its functions under this Act; .

(vi) To acquire, purchase, own, lease, mortgage, sell, or otherwise
dispose of any land or property of any kind, whether movable or immovable;

(vil) To exercise the right of eminent domain, by expropriating the land
or areas along proposed highways or public thoroughfares;

(vill) To construct, operate and maintain toll facilities in major roads,
highways and public thoroughfares vested in or belonging to the Authority;

(ix)_To collect, subject to the determination and approval of the Toll
Regulatory Board , just and reasonable tolls, fees, rentals, or charges for the
use of the toll facility;

(x) To reclaim, excavate, enclose, or raise any part of the lands
vested in the Authority;

(xi) , To raise and/or borrow, within the limitation provided by law, the
necessary funds from local and international financial institutions and to issue
bonds, promissory notes and other securities for that purpose and to secure
the same by guarantee, pledge, mortgage, deed of trust, or assignment of its
properties held by the Authority for the purpose of financing its projects and
programs within the framework and limitations of this Act;

(xil) To do all such other things and to transact all such business
directly or indirectly necessary, incidental or conducive to the attainment of
the purposes of the Authority:

(xi) To exercise all the powers of a corporation under the Corporation
Law insofar as they are not inconsistent with the provisions of this Act.

(b). The corporate functions of the Authority shall be.as follows:


() To formulate, in coordination with the National Economic
Development Authority and the Department of Public Works and Highways, a
Somprehensive and practicable major highways and public thoroughfares
development plan for the State and to program its implementation:

(ii) To construct, maintain, operate and provide such facilities and
Services as are necessary in the major highways and public thoroughfares
vested in, or belonging to the Authority;

(ii) To coordinate with the Bureau of Lands or any other
Sovernment agency or corporation in the development of any foreshore area:

(w) To exercise such powers as may be essential, necessary or
incidental to the powers granted to it in the preceding sub-paragraph as well
as to carry out the policies and objectives of this Act.

SECTION §. Board of Directors - a) The corporate powers of the
Authority shall be vested in and exercised by a Board of Directors, hereinafter
referred to as the Board, which shall consist of the following:

(i) The Chairman of the Board and Administrator of the Authority
who shall be appointed by the President of the Philippines to serve for
term of six (6) years, unless
Sport removed for cause. In case of removal for cause, the replacement
shall serve only the unexpired portion of the term;

(ii) The Secretary of Public Works and Highways;

(ii) The Director-General of the National Economic Development
Authority;

(W) The Secretary of Transportation and Communications;

(v) The Secretary of Finance;

b) The Directors listed under sub-sections a), (ii) to ‘v) shall be ex-
officio members of the Board of Directors; Provided, that, in thir absence the
Directors concemed shall designate the officer next in rank to them in, their
department or office to act on their behalf as Director,

©) The members of the Board or their respective alternates shall
wee, Per diem of not more than Five thousand Pesos (PS.000, 00) for
every Board meeting actually attended by them; Provided, however, that the


per diem collected per month shall not exceed the equivalent of four (4)
meetings; Provided, further that the amount of per diem shall not be
increased within two (2) years after its last increase; and Provided finally ,
that the ex-officio members shall not be paid other allowances or any form of
compensation, except actual expenses in traveling to or from their residences
to attend Board meetings.

d) Chairman/Administrator - The President of the Philippines shall
appoint a professional manager as Administrator of the Authority who shall be
the Chairman of the Board and Chief Executive Officer of the Authority. He
shall receive pay and allowances and privileges equal to that of a Department
Secretary.

SECTION 6. Organizational Structure - The Administrator shall,
subject to the approval of the Board, determine the organizational structure,
the staffing pattern and the number of personnel of the Authority, define their
duties and responsibilities, and fix their salaries and emoluments. For
professional and technical positions, the Administrator shall recommend
salaries and emoluments that are comparable to those of similar positions in
other government-owned corporations, the provisions of existing rules and
regulations on wage and position classification notwithstanding. The
Administrator shall, subject to the approval of the Board, appoint and remove
personnel below the rank of Assistant Administrator. The number of
Assistant Administrators of the Authority shall in no case exceed three (3)
who shall each receive a salary to be determined by the Board and approved
by the President,

SECTION 7. General Powers and Duties of the Administrator and
Assistant Administrators - a) General Powers and Duties of the
Administrator- The Administrator shall be responsible to the Board and shail
have the following powers, functions and duties:

() To implement, enforce and apply the policies, programs,
guidelines, procedures, decisions, rules and regulations promulgated,
prescribed, issued or adopted by the Authority;

(ii) To manage the day to day affairs of the Authority, and ensure
the operational efficiency of all its offices;

(iii) To sign contracts, to approve: expenditures and payments within
the budget provisions, and generally to do all acts for the proper and efficient
operations of the Authority; :

(iv) To undertake research, studies, investigations ani other activities
and projects to support the preparation of plans for the infras\ructure projects
that has to be undertaken and submit the same for the information and
approval of the Board;


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(v)_To negotiate with local and international financial institutions in
order to raise and/or borrow the necessary funds to finance proposed
infrastructure projects;

(vil) To perform such other duties as the Board may assign from
time to time

b) General Powers and Duties of the Assistant Administrators - The
Assistant Administrators shall be responsible to the Administrator of the
Authority and shall have the following general powers, functions and duties:

()_ To assist the Administrator in implementing, enforcing,’ and
applying the policies, programs, guidelines, procedures, decisions, rules and
regulations promulgated, prescribed, issued, or adopted by the Authority:

(ii) To assist the Administrator in the performance of his other
functions and duties;

(iii) To perform such other duties as the Administrator may assign
from time to time.

SECTION 8. Capitalization - a) The Authority shall have an
authorized capital of TEN (10) BILLION PESOS (P10,000,000,000.00)

b) The initial paid up capital shall consist of

() Cash contribution by the Government in the amount of TWO
HUNDRED MILLION PESOS (P200,000,000.00) a year for the next three (3)
years, which is hereby appropriated out of any fund in the National Treasury
not otherwise appropriated;

(ii) All other assets which the President may transfer to the Authority
as part of the equity contribution of the Government,

SECTION 10. Borrowing Powers - a) The Authority may, after
consultation with the Central Bank and the Department of Finance, and with
the approval of the President of the Philippines, raise funds, either from local
or international sources, by way of loans, credits or indebtedness or issue
bonds, notes, debentures, securities, and other borrowing instruments,
including the power to create pledges, mortgages, and other voluntary liens or
encumbrances on any of its assets or properties,

b) The loans contracted by the Authority under this Section together
with all interests and other sums payable in respect thereof, shall constitute a
charge upon all the revenues and assets of the Authority and shall rank pari
passu with one another, but shall have priority over any other claim or
charge on the revenue and assets of the Authority:


Provided, That this provision shall not be construed es a prohibition or
restriction on the power of the Authority to create pledges: mortgages and
other voluntary liens or encumbrances on any property of the Authority

©) Except as expressly authorized by the President of the Philippines,
the total outstanding indebtedness of the Authority in the principal amount in
local _and foreign currency shall not at any time exceed the authorized
capitalization of the Authority;

d) The President of the Philippines, by himself or through his duly
authorized representative, is further hereby authorized to guarantee in the
name and on behalf of the Republic of the-Philippines, the payments of loans
or other indebtedness of the Authority up to the amount herein authorized

©) All interests paid or payable by the Authority on its loans or cther
forms of indebtedness shall be exempt from taxes of whatsoever nature

SECTION 10. Annual Accounts - a) the Board shall cause proper
accounts and other records of the Authority in relation thereto to be kept An
annual statement of account shall be rendered in respect to each year’ The
Authority shall maintain such accounts and other records under a commarcial
system of accounting

5) “The accounts of the Authority shall be kept and made up to 31
December in each year.

©) The annual statement of accounts of the Authority shall present a
true and fair value of the financial position of the Authority and of the results
of the operations of the Authority for the year to which il rolatos

SECTION 11. Auditor- a) The Commission on Audit (COA) shall be
the full time auditor of the Authority. For this purpose, the COA shall
designate its representative who shall perform the actual audit of the
accounts of the Authority;

5) The Authority shall provide the COA representative and his/her staff
with @ suitable office space, supplies, equipment, furniture and other
cee operating expenses for its proper maintenance, including
expenses for travel and transportation;

©). The salaries and allowances of the COA representative and his
staff shall be paid directly by the: COA frém its own appropriations and other
contributions;

@) The COA representative shall, as soon as practicable, but not later
than three (3) months after the accounts have been submitted for audit, send


an audit report to the Board. He/she may also submit such periodical or
Special reports to the Board as may to him/ her appear necessary.

SECTION 12. Annual Report - The Board shall submit to the
President of the Philippines together with the Auditor's Report on the relevant
accounts, an annual report generally dealing with the activities and operations
of the Authority during the preceding year and containing such information
relating to the proceedings and policies of the Authority.

SECTION 13. Separability Clause - If any provision of this Act shall
be held unconstitutional or invalid, the other provisions not otherwise affected
shall remain in full force and effect.

SECTION 14. Repealing Clause - All laws, executive issuances, or
Parts thereof which are inconsistent herewith are hereby repealed’ or
accordingly amended.

SECTION 15. Effectivity - This Act shall take effect upon its
Publication in at least two (2) newspaper of general circulation.

Approved.