Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS

First Regular Session

House Bill No) 549

Introduced by HON ROZZANO RUFINO B. BIAZON

AN ACT
ESTABLISHING A NATIONAL RAILWAY SYSTEM IN THE PHILIPPINES
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

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

ARTICLE I
GENERAL PROVISIONS

SECTION 1. Title. — This Act shall be known as the “Philippine National Railway
Act of 2019".

Sec. 2. Declaration of Policy. ~ It is hereby declared the policy of the State to
promote the railway industry as an instrument for national progress and prosperity. Toward
this end, it shall establish a nationwide railway system that is cost-effective, safe, reliable,
efficient, state-of-the-art, accessible, sustainable and compliant with international standards.
In the establishment of a nationwide railway system, the State shall promote the cooperation
between the government and the private sector including the local government units in the
development, implementation and operation of railway systems.

ARTICLE I
DEFINITION OF TERMS

Sec.3. — Definitions. As used in this Act, the following terms shall mean as defined
herein:

a. Affected Person —

() a person who has submitted to the Authority a proposal to build,
operate and maintain a railway system, or license to operate;

(ii) a person who has been granted or denied approval by the Authority;


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|. Maglev — shall mean a train u

(iii) a person to whom an order or direction has been given or whom an
order or decision has been issued by the Authority;

(iv) a person whose property or the use or any interest thereof is affected
by any expropriation proceedings to carry out railway project; and

(v) any person whom the Board, in its discretion, accepts as an affected
person.

. Amusement Railway — a non-common cartier railway system that is operated

wholly or in part within the confines of an amusement, historical park or such other
similar sites;

At-Grade Railway ~ a railway system that runs on street level;

Authority ~ the Philippine National Railway Authority;

. Automated Guided Transit ~ a fully automated transit system which operates

without crew;

f. Board — the Board of Directors of the Authority;

Commuter Rail System — a rail system that uses traditional freight railroad
technology, including diesel or electric locomotives, to operate trains for passenger
service;

Elevated Railway — a railway system that runs on tracks on elevated viaducts;

. High Speed Train —a railway technology that operates at the speed of 220 kph and

above;

. Industrial Railway — a non-common carrier railway system that transport goods

that are manufactured, refined or otherwise produced, processed or handled by the
person who operates the railway or on whose behalf the railway is operated, and is
operated wholly or in part within the confines of the industrial site on which goods
are manufactured, refined or otherwise produced, processed or handled, and is not
operated for the purposes of transporting goods for a tool or a fee;

Light-Rail Transit System — an electric railway system where the cars operate as
single unit or as short train of two or three cars;

ing propulsion technology;

. Metro Rail Transit System — a heavy rail system that is also commonly referred to

as rail rapid transit. A heavy-rail system typically consists of large four-axle rail
vehicles operating in trains of two to ten cars; ’

Monorail Transit System -a special type of rail system that uses a single rail to
support and guide a passages vehicle;

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. National Railway Administrator — the Chief Operating Officer of the Philippine
National Railway Authority;

Private Road ~a road that is not owned or otherwise under the direction, control
and management of the Authority or any instrumentality of the government;

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Public Railway — a common carrier railway system that is operated for purposes of
transporting people, goods and services or any one or more of them for a toll or
fee;

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Rail Rapid Transit System — a rail system that operates on tracks reserved solely for
the rail cars; ,

Railway — an undertaking that is operated for the purpose of transporting people,
goods and services or any one or more of them by means of rolling stock operated
on track;

. Railway Operator ~ a natural person or a juridical person who is authorized 10
own, operate and maintain a railway system;

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Railway Security Officer — a person directly responsible for securing not only the
life of each and every commuter and the employees of the Authority and its
subsidiaries but also the railway structure and facilities;

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Regional/Provincial Railway — a railway system that moves passengers and freight
in long-distances;

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. Regulatory Board — the Railway Regulatory Board;

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Rolling Stock — any locomotive or railway car that operates on track and any other
vehicle that by design or by the way itis equipped, is capable of being operated on
track;

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‘Secretary ~ the head of the Department of Transportation and Communications;
2. Services —

(i) _ the operation of rolling stock;

(ii) the operation of track;

(iii) the transportation of people, goods and services
aa. Station — loading and unloading area for rail commuters;

bb. Streetcars — a tramway or trolley with electrically-powered vehicles that run on
steel tracks embedded within city streets;

ce. Structural Facilities — railway bridges, tunnels, overpasses, underpasses, culverts,
crossings, and similar structures;


dd, Subway — an underground railway;

ee. Track — a railway track or any land or Right-of-Way on which the railway track
is located and any signal and apparatus used relative to the operation of the
railway track; and

ff. Urban Rail Transit System — a rail system that is a street railway, tramway, light
transit railway or similar system, the purpose of which is to transport the general
public within an urban area,

ARTICLE UL
STRUCTURE OF THE NATIONAL RAILWAY INDUSTRY

Sec. 4. The National Railway Industry. ~The National Railway Industry shall have
two (2) components: (a) the Public Domain; and (b) the Private Domain. The Public Domain
shall consist of: 1) the Philippine National Railway Development Authority; and 2) the
Railway Regulatory Board. The Private Domain encompasses ownership, maintenance and
operation of railway systems.

Sec. 5. Sovereign Duty. — In the public domain of the railway industry, it shall be the
duty of the government to construct, own, maintain and operate railway systems including the
supervision of both public and private railway systems.

ARTICLE IV
PHILIPPINE NATIONAL RAILWAY DEVELOPMENT AUTHORITY

Sec. 6. Creation of the Philippine National Railway Development Authority. ~ There
is hereby created a body corporate to be known as the Philippine National Railway
Development Authority, hereinafter referred to as the Authority which shall have the attribute
of perpetual succession and shall be vested with the powers of a corporation.

It shall establish its principal office in Metropolitan Manila unless otherwise provided
by the Authority and may put up branches as may be necessary.

Sec. 7. Mandate. ~ The Authority is hereby mandated to establish a national railway
system covering the islands of Luzon, Visayas and Mindanao including Metro Manila and
other metropolitan areas in the Philippines through the construction of new railways and the
integration and linking of all existing railway systems in the country.

Sec. 8. Powers, of the Authority. As a corporate body, the Authority shall have the
following powers, duties and functions:

(a) To succeed in its corporate name, to sue and be sued in such corporate name and to
adopt, alter and use a corporate seal which shalll be judicially noticed;

(b) To adopt, amend, and repeal its By-Laws;


(©) To enter into, make perform and carry out contracts of every class and description
which are necessary and incidental to the realization of its purposes with any person,
firm or corporation, private or public, and with foreign government entities;

(@) To contract loans, indebtedness, credit and issue commercial papers and bonds, in any
local or convertible foreign currency from any international financial institution,
foreign government entity, and local or foreign private commercial banks or similar
institutions under terms and conditions prescribed by law;

(e) To acquire, own, hold, administer and lease such real and personal properties as it
deems necessary or convenient in governing its business affairs and to encumber,
lease, mortgage, sell, alienate or otherwise dispose of the same except its right-of-
way;

(® 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;

(g) To construct, own lease, operate and maintain public utilities, infrastructure facilities
and such auxiliary support services needed to develop, operate and maintain a
nationwide railway system; ,

(h) To design, construct, maintain and operate by itself or by delegation to, or through
contractual arrangement such auxiliary infrastructure support facilities such as, but
not limited to, parking structures above or below the ground, including the means of
access;

(i) To prescribe, fix and regulate the scheduled, frequency and route of railway services;
(i) To fix the agency estimate of the cost of railway project;

(k) To receive donations, grants, bequest and assistance of all kinds and to utilize the
same;

() To establish, organize and maintain subsidiary corporations as operators of railway
systems or establish joint ventures formed in accordance with the Philippine
Corporation Code;

(m)To privatize any part or all of the railway system or any sub-system under the
Authority, and to grant the party that acquires the system an authority to operate the »
same;

(n) To formulate and adopt a master plan for a national railway system with ecological
and environmental standards;

(0) To develop, construct, operate, maintain and control railway facilities including
parking stations and terminals for freight, goods and cargoes;

(p) To consider and approve variation orders of not more than 10% of the cost of railway
project and without prejudice to the prevailing inflation rate;

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(q) To order the cessation of operations or any and all activities related to the railway
system upon the recommendation of the concerned railway safety/security officer;

(©) To call upon any government agency or instrumentality for such assistance as maybe
necessary in the discharge of its duties and functions;
,
(s) To promulgate such rules and regulations as may be necessary to carry out the
objectives of this Act;

(t) To be member of International Railway Organizations; and
(u) Perform such other powers as may be necessary to carry out the purpose of this Act.

See. 9. Board of Directors; Composition. - The powers and functions of the Authority
shall be exercised by a Board of Directors, hereinafter referred to as the Board, to be
composed of the Secretary of Transportation and Communications as Chairman, the Director
General of the National Economic Development Authority as Vice Chairman, and the
Secretaries of the Departments of Public Works and Highways, Finance, Budget and
Management, Agriculture, Environment and Natural Resources, Interior and Local
Governments and the Chairman of the Metro Manila Development Authority, including the
National Railway Administrator and the President of the Philippine Chamber of Commerce &
Industry, as members.

Members of the Board shall receive a per diem of not more than five thousand pesos
(P5,000.00) for every board meeting: Provided, however, That the per diem collected per y
month does not exceed the equivalent two (2) meetings: Provided, further, That the amount
of per diem for every board meeting may be increased by the President but such amount shall
not be increased within two (2) years after its last increase.

‘The Chairman and the Members of the Board may designate their respective
alternates to the Board from among their own officials with the rank of undersecretaries.

Sec. 10. Functions of the Board. ~ The Board of Directors shall be the policy-making
body of the Authority and shall perform the following powers and functions:

(a) Determine the organizational structure of the Authority, define the duties and
responsibilities of all officials and employees and adopt a compensation and benefit
scheme that shall be subject to the approval of the Department of Budget and
Management;

(b) Appoint all officials down to the third level and authorize the Administrator of the
Authority to appoint all others: Provided, That all appointments shall be on the basis
of merit and fitness and all personnel action shall be in pursuance of Civil Service
laws, rules and regulations except those coterminous employees of the Board; ;

(©) Prepare the annual and supplemental budgets of the Authority;

(d) Formulate policies, rules and regulations, plans and projects and programs;


(c) Establish financial and operations targets for management as the basis for evaluating
and monitoring corporate performance; ri

(f) Authorize such expenditures for the effective and efficient administration and
operations of the Authority;

(g) Subenit an annual report of the operation of the Authority, through the Secretary of the
DOTC, to the President of the Philippines and Congress; and

(h) Exercise such other powers as may be necessary to accomplish the purposes for which
the Authority was organized.

Sec. 11. Secretary to the Board. — There shall be a Secretary to the Board who must
preferably be a member of the Philippine Bur and has engaged in the practice of law for at
least two (2) years prior to his appointment.

ARTICLE V
ADMINISTRATION OF THE AUTHORITY

Sec. 12. The Administrator. The general conduct of the operations and management of
the Authority shall be vested in an Administrator with the rank and privileges of ait
Undersecretary who shall serve as Chief Executive Officer of the Authority and Member of
the Board. He shall be primarily responsible in carrying out the projects and programs of the
Authority as well as in the implementation of its policies, rules and regulations, including the
faithful execution of the decisions of the Board.

Sec. 13. Qualifications. — The Administrator must be a natural-born citizen of the
Philippines, at least thirty-five (35) years of age on the day of his/her appointment, of good
moral character and with recognized executive ability and competence in the field of

jon, business administration, management, finance or law. He shall be appointed
by the President of the Republic of the Philippines for a term of six (6) years.

Sec. 14, Duties and Responsibilities of the Administrator. The Administrator of the
Authority shall have the following duties and responsibilities;

(a) Execute, administer and implement the policies and measures approved by the Board;

(b) Direct and supervise the operations and administration of the Authority and all public
railways;

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(©) Direct and supervise the preparation of the agenda for the meeting of the Board, and
to submit for the consideration of the Board such measures as he believes necessary

to carry out the purposes and objectives of the Act;

(@) Represent the Authority in all its transactions with other offices, agencies and
instrumentalities of the government and to deal with any persons and entities, public
or private, domestic or foreign, on matters related to the mandate of the Authority:
and


(e) Exercise such other powers and perform such other duties and function as the Board
may assign or authorize;

Sec. 15, Deputies. - The National Railway Administrator shall have four (4) Deputies
for Metro Manila, Luzon, Visayas and Mindanao, all of whom shall likewise be appointed by
the President of the Republic of the Philippines for a term of six (6) years. The deputies shall
have the same qualifications as that of the Administrator. These officials, with the rank and
privileges of Assistant Secretary, may only be removed from the service for cause as
provided under existing laws.

Sec. 16. Legal Counsel. ~ The Authority shall appoint a Legal Counsel who shall be ap
member of the Integrated Bar of the Philippines. has at least five (5) years’ experience in the

practice of law; and must be at least thirty five (35) years of age at the time of his

appointment.

Sec. 17. Merit System. — All officials and employees of the Authority shall be selected
and appointed based on the comprehensive and progressive merit system to be established by
the Authority immediately upon its organization and in accordance with Civil Service laws,
rules and regulations. The hiring, promotion, transfer and dismissal of all the personnel of the
Authority shall be governed by applicable existing civil service laws, rules and regulations.

ARTICLE VI
RAILWAY REGULATORY BOARD

Sec. 18. Regulatory Board: Creation and Composition. — A Railway Regulatory
Board, hereinafter referred to as the Regulatory Board, is hereby created which shall be
composed of the Secretary of Transportation and Communications as Chairman, Secretary of
Public Works and Highways as Vice-Chairman, Secretaries of Department of Labor and
Employment, Finance, Budget and Management, and Trade and Industry. The Administrator,
shall sit in the Regulatory Board as ex-officio member. '

See. 19. Standards. — In order to sustain the development of the railway industry,
enhance the operations of railway systems and ensure the safety and security of the railway
riding public, and protect them from any form of natural calamities and man-made disasters,
the Regulatory Board shall set the necessary fare and standards on safety and security to be
observed by all railway operators, be they public or private. The fare and standards on safety
and security that the Regulatory Board shall formulate must be compliant with international
standards.

Sec. 20. Rules and Regulations. — The Regulatory Board shall formulate rules and
regulations on the following:

(a) Standards and specifications with respect to rolling stock, track and structural
facilities and other railway equipment and apparatus;

(b) Construction, maintenance, repair and removal of track and structural facilities;
(c) Permanent and temporary fencing of right-of-way and structural facilities including

the apportionment of costs in relation thereto;
,


(d) Track crossing and its usages; '

(e) Installation and use of signage, warning signals, barriers, operating signals and other
similar apparatus;

(8) Qualifications of persons operating rolling stock and of persons carrying out functions
regarding the operation of track and of other equipment and matters ancillary to the
operation of rolling stock;

(g) Materials, equipment and technology to be used for the building and construction of
the railway systems;

(h) Tariff, rates and other fees and charges;
(i) Railway security and safety; and
(i) Imposition of fines and penalties.

See. 21. Per Diems and Allowances. Members of the Board shall receive a per diem
of not more than five thousand pesos (P5,000.00) for every board meeting: Provided
however, That the per diem collected per month does not exceed the equivalent two (2)
meetings: Provided, further, That the amount of per diem for every board meeting may be
increased by the President but such amount shail not be increased within two (2) years after
its last increase.

See. 22. Secretary to the Board. ~ There shall be a Secretary to the Board who must
preferably be a member of the Philippine Bar and has engaged in the practice of law for at
least two (2) years prior to his appointment.

ARTICLE VIL
ADMINISTRATION OF THE REGULATORY BOARD

Sec. 23. Executive Director of the Regulatory Board. — The management and
operations of the Regulatory Board shall be vested in an Executive Director who shall be a
natural-born citizen of the Philippines with the same rank and privileges as that of an
Assistant Secretary. He shall be appointed by the President of the Republic of the Philippines
for a term of six (6) years.

Sec. 24. Qualifications. ~ The Executive Director must be natural born citizen of the
Philippines, at least thirty (30) years of age on the day of his appointment, and of good moral
character. He must either be a lawyer or duly licensed civil or electronic engineer. He can
only be removed from the service for cause pursvant to law.

Sec. 25. Deputies. — The Executive Dicector shall have three (3) deputies for fare,
safety and security and shall have the same qualifications as that of the Executive Director.
Each of them shall be appointed by the President for the same term of office and can only be
removed for cause pursuant to law.


Sec. 26. Staff and Personnel, ~ The Executive Director shall be assisted with such
staff and personnel that the Board may determine, subject to the approval of the Department
of Budget and Management and in accordance with civil service laws, rules and regulations.

ARTICLE VIL
COMMON CARRIER

Sec. 27. Public Railways as Common Carriers. — As a common carrier, a railway
operator shall provide all the necessary equipment and facilities for the safety, security,?
comfort and convenience of the general riding public in accordance with international
standards and best practices.

Sec 28. Limitation of Liability. — The liability of a railway operator shall not be
limited to the liability and responsibility of a shipper under existing laws, rules and
regulations.

Sec. 29. Transfer of Authority to Operate. No authority to operate a railway system
shall be transferred or conveyed without the approval of the Authority.

ARTICLE IX
CLASSIFICATION OF RAILWAYS

See. 30. Classification. ~ The railway system of the Philippines shall be classified
according to technology and level of ridership such as Tramways; Mono Rail; Light Rail;
Metro Rail; Heavy Rail; Sky Rail; Subway and Maglev.

ARTICLE X
CONSTRUCTION OF RAILWAYS

See. 31. Construction of Railways and Highway Crossing Track. ~ Construction of
any form and kind of railway track such as track crossing, intersections, joints, or connections
that unites with any existing railway track or structural facilities for purposes of developing a
railway shall not be allowed without prior approval of the Authority. Construction on,
across, over or under a highway without prior approval of the Authority shall likewise not be
allowed.

Sec. 32. Structural Change. - No change or replacement of any existing railway
structure or methodology shall be allowed without prior approval of the Authority.

Sec. 33. Right of Entry and Disturbance Fee. — A railway operator or his authorized agent
bringing in equipment and materials to a piece of land may gain access to such land to construct or
maintain a rail system or to repair a rolling stock, track or structural facilities of a public railway,
subject to the payment of a disturbance fee in such amounts as may be determined by the Authority.

Sec. 34. Highway Crossing. When the construction is carried out to lay track on,
across, over or under a highway, the person carrying out the construction shall allow vehicle#

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using the highway adequate passages, and on the completion of the construction restore the
highway to its acceptable passable condition.

Sec. 35. Crossing Construction. Subject to the approval of the Authority, the owner of
a private road may be allowed to construct and maintain at his own cost, either an underpass
or overpass crossing across the right-of-way that already existed prior to the construction of
his private road. However, if the private road was in existence before the rail right-of-way
was established, the railway owner/operator is responsible for the cost of constructing and
maintaining the crossing.

Sec. 36. Crossing of Landowners, ~ Any proponent of a railway project shall provide
an access road in between lands cut crossed by the project when public interest so demands.

Sec. 37. Cost. — When a railway operator is unable to agree with the road authority
as to the cost apportionment associated with the construction of projects under this article, the
parties may resort to arbitration.

Sec. 38. Fencing of Railway Track. ~ The operators of railway systems when public
safety demands as may be determined by the Authority, shall provide the necessary fences
along railway tracks.

Sec. 39. Drainage. —\n the construction of railways, the Authority shall ensure that
appropriate and adequate drainage and sanitary facilities are provided. No construction of
railways shall be allowed by the Authority without such facilities.

Sec. 40. Fire Prevention, — All railway operators shall provide their railway systems
all the necessary fire-fighting equipment and adopt ways and means to protect their systems
and commuters from fire or damages arising therefrom.

Sec. 41. Stoppage. - When the construction or work poses danger to person or
property, the Safety Officer may immediately order the stoppage of the construction or work
unless constrained by the Authority.

ARTICLE XI
RIGHT-OF-WAY

Sec. 42. Right-of-Way. — The Authority shall identify and establish within three (3)
years after the approval of this Act, the alignment of a National Railway System and oncey
established and the right-of-way is acquired, the same shall not be the object of any sale,
lease or other forms of disposition.

Sec. 43. Intrusion into the Right-of-Way. ~ Any intrusion into the right-of-way by any
person shall be punishable by imprisonment as provided under Section 92, Article XXVII
hereof.


ARTICLE XII
EXPROPRIATION AND OVERRIDING
OBJECTIVE OF CONSTRUCTION

Sec. 44. Expropriation. ~ The Authority may initiate necessary expropriation
proceedings in order to carry out the objectives of this Act.

Sec. 45, Ejection. — Any person or group of persons who enter, intrude, occupy,
settle, possess, construct into the railway alignment or right-of-way or any property owned
by any railway office or agency shall be considered as nuisance per se and shall bey
summarily ejected from the premises. Such entry, intrusion, occupation, settlement,
possession and construction shall be considered as a criminal act and therefore punishable
under Section 92, Article XVII hereof.

Sec. 46. Suspension. — When the construction or work in a railway project is not being
carried out in accordance of the approved specifications relative to design and product
standards, the Safety Officer may order the suspension of the construction or work until after
corrections shall have been made by the contractor or its resumption is ordered by the
Authority.

Sec. 47. 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 injunction in any case, dispute, or controversy involving
‘any contract or project being implemented by the Authority, to prohibit any person or
persons, or entity or government official from proceeding with, or continuing the execution
or implementation of such contract or project, or pursuing any lawful activity necessary for
the execution, implementation or operation of such railway project/system.

ARTICLE XII
RAILWAY OPERATIONS

Sec. 48. Operations. - The operator of a railway shall ensure that the track and other
railway facilities are constructed, operated and maintained in accordance with this Act,
pertinent rules and regulations implementing the same and policies that may be promulgated
by the Authority and the Railway Regulatory Board and that the rolling stock is maintained
and operated in accordance with applicable rules and regulations promulgated by the
Authority and the Regulatory Board.

Sec. 49. Suspension and Termination. — Any operator of a public or industrial
railway who intends to suspend or terminate its operation shall, within six months, prior to
the suspension or termination, give notice thereof to the Authority and to the public.

ARTICLE XIV
SAFETY AND SECURITY OFFICERS

Sec. 50. Safety Officer. - There shall be created positions of Safety Officers with thd
following duties and functior



a. Administer and foster faithful compliance with railway safety legislations, approvals
and operating rules and regulations;

b. Ensure the safety at all times of

jing stocks, railway tracks, signaling and
communication systems and other facilities.

es.

c. Conduct regularly safety audit of railway system including a check on inventory
levels of essential spare parts; and

d. Ensure the safety of the general riding public and of persons employed by or acting
on behalf of operators of railways;

Sec, 51. Qualifications. — No one shall be appointed as a Safety Officer unless he is a
graduate of a course related to safety and passes the examination given by the Professional
Regulatory Commission for the purpose.

Sec. 52. Security Officer. — There shall be created positions of Security Officers with

the following duties and functions: '

a. Administer and foster faithful compliance with railway security legislations,
approvals and operating rules and regulations;

b. Ensure the security of the general riding public and of persons employed by or acting
on behalf of operators of railways; and

c. Ensure the installation of the state of the art surveillance and tracking equipment for
gers and cargo.
Sec. 53. Qualifications. — No one shall be appointed as a Security Officer unless he is

a graduate of a course related to security and passes the examination given by the
Professional Regulatory Commission for the purpose.

ARTICLE XV
MAINTENANCE

Sec. 54. Proper Maintenance. — There shall be created a Maintenance Group headed
by a Maintenance Engineer, in every railway line with the following duties and functions:

a. Ensure that the economic lifespan of the system is attained through rehabilitation,
refurbishment and overhauling;

b. Ensure continuous and efficient operation of the system;
c. Ensure a continued availability of spare parts in the inventory;

d. Ensure the repair and maintenance of the rolling stock, track or structural facilities.


ARTICLE XVI
COMPLIANCE, ACCIDENTS AND ADMINISTRATIVE PENALTIES

Sec. 55. Inspection of Railways. — A railway Safety or Security Officer may carry
out inspections of the following:

a. Rolling stock, track, goods and other facilities; and
b. Record, document, object or thing that relates to the operations of a railway.

Sec. 56. Access. ~ A railway Safety or Security Officer, in carrying out an inspection
may do one or more of the following:

a. Enter any track, structural facility, rolling stock, building or any other property
associated with railways;

b. Make inquiries with any person who is employed by or who carries out any duties
or functions for or in behalf of the railway operator; and

©. Perform or caused to be performed tests or examinations of anything relative to the
inspection.

Sec. 57. Production of Documents. — In the course of safety or security inspection,
the officer conducting the inspection may require the production of any documents, records
or things relative thereto.

Any person who is the subject of an inspection shall, when requested to do so by ab
railway Safety or Security Officer, produce for inspection, within reasonable period of time,
any record, document, object or thing that relates to the matter under inspection. A railway
Safety or Security Officer may request copies or take photographs of the record, document,
object or thing under inspection and immediately thereafter return the same,

When conducting an inspection of a record, document, object or thing and a railway
Safety or Security Officer is of the opinion that he must retain possession of the record,
document, object or thing under inspection for a longer period of time, he may do so but shall
not be longer than three days after receipt thereof.

Sec. 58. Directions of Railway Safety Officer. - When a railway safety officer carries
out an inspection, he may do one or more of the following:

a. Recommend the cessation of the operation of any railway system or any activity
related thereto when in his expert opinion, there are reasonable grounds to believe
that the continuing operation of the railway system and any related activity, may
endanger the safety of the riding public and the employees of the railway or cause
damage to property;

b. Order the removal of a rolling stock or any equipment or any person on board, when!
the railway safety officer is of the opinion that the operation or presence of the same
poses danger to the safety of the public or persons employed by or acting on behalf
of the operator unless restrained by the National Railway Authority; and

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¢. Issue orders to stop the over-speeding of a train or when violations are being
committed related to the speed of the rolling stock.

Sec. 59. Accidents. ~ The railway operator shall keep a record of every accident
involving a person or the railway system and shall forthwith report to the Authority.

Sec. 60. Investigation. — The Authority shall conduct an investigation on accidents
provided for in the immediate preceding section, and for this purpose, the investigating
officer shall have full access to the place and attributes of the accident.

Sec. 61. Liability. - The operator and his agent shall be jointly and solidarily liable for
the fines and penalties provided under this Articie.

Sec. 62. Execution. — When the operator and/or his agent fails to pay the
administrative penalty in accordance with this Article, the Authority shall take all the
necessary legal actions to compel the payment of the administrative legal penalties and fines
against the operator and his agent.

ARTICLE XVI
REVIEW '

Sec. 63. Review/Appeal. Any order issued by a Safety or Security Officer may be
appealed for review by the affected person to the Authority within Fifteen (15) working days
from notice thereof whose decision shall be final and executory.

Sec. 64. Motion for Reconsideration. — Any person affected by an order or decision of
the Authority may file a motion for reconsideration within Fifteen (15) days from receipt of
thereof. No second motion for reconsideration shall be entertained.

ARTICLE XVIII
PARTICIPATION OF LOCAL GOVERNMENT UNITS AND
THE PRIVATE SECTOR IN RAILWAY DEVELOPMENT

Sec. 65. Local Government Units (LGU’s). — A local government unit (LGU) or group
of LGUs, may own, construct, maintain and operate a railway system in accordance with
international standards and subject to the approval of the Authority.

Sec, 66. Private Sector. ~ Any person, natural or juridical, may own, construct,y
maintain and operate a railway system in accordance with International Standards and subject
to the approval of the Authority.

Sec. 67. Private-Public Partnership. The Authority or any LGU may jointly own,
construct, maintain and operate a railway system with the private sector in accordance with
the Corporation Law and other applicable laws.


ARTICLE XIX
RAILWAY ENERGY PLANT

Sec. 68. Power Plant. ~ In order to ensure a continuous and uninterrupted operation of
railway systems in the Philippines, the Authority may establish a power plant for any of its »
rail systems: Provided, That before it can put up a power plant, the Authority shall undertake

a cost-benefit analysis on this matter in order to determine its cost-effectiveness, viability and
whether it is going to be advantageous to the government.

See. 69. Waste-to-Energy Plant. — The Authority shall establish in cooperation with
LGUs and/or the private sector, waste-to-energy plant in strategic areas in the country.

ARTICLE XX
TRANSFER OF RAILWAY TECHNOLOGY

Sec. 70. Railway Engineering Course. ~ A four (4) year baccalaureate course on
Railway Engineering Management and other related courses shall be established in the
University of the Philippines or the Polytechnic University of the Philippines and shall
receive an annual budgetary support which shall be provided in the Annual General
Appropriations Act.

See. 71. Railway Training Center. ~ A Railway Training Center shall be established
by the Authority to equip the railway manpower resource with the necessary skills and
expertise in the development and implementation of railway projects and programs, and in
the operation of railway systems.

See. 72. Manufacturing of Railway Equipment, ~The Authority shal] endeavor to
establish the necessary mechanisms for the manufacturing of railway equipment to ensure the
expansion and sustainability of a National Railway System herein envisioned.

ARTICLE XXI
TRAIN DRIVERS

Sec. 73. Train Drivers. ~ To promote proficiency and to ensure the safety of the
general railway riding public, all train drivers must be physically and mentally fit and pass all
the tests and qualifications to be prescribed by the Authority. They shall also undergo
constant and continuing training to improve their level of skills.

See 74. Train Driver's License. — The Railway Training Center shall conduct the
for train drivers for a duration that it may determine and thereafter issue the
necessary Train Driver's License (TDL) for those who will pass the training according to its
standards, tests and measurements.

ARTICLE XXII
CAPITALIZATION AND TRUST FUND

Sec. 75. Capitalization, ~ The Authority shall have a capitalization of Five Hundred

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Billion (P500,000,000,000.00) divided into shares at One Thousand Pesos per share (P1,000
00). This capitalization may consist of the assets of the existing railway offices and agencies
that the Authority shall absorb under this Act, including the amount of One Hundred Billion
Pesos which shall be provided in the General Appropriations Act for a period of Five (5)
years starting on the year following the passage of this Act.

Sec. 76. Establishment of the Railway Trust Fund. — A Railway Trust Fund is hereby
established that shall be solely used to finance railway projects and the operations of railway
systems,

Sec. 77. Sources. ~ The Railway Trust Fund consists of 3% increase in the real
property tax, 2% share of the sin taxes and 5% share of the road user’s tax.

Sec. 78. Fund Administrator. - The Trust Fund shall be administered by any
recognized government depository bank and shall only be spent and withdrawn by a 2/3 vote
of the members of the Board of the Authority for the purposes for which it is created.

ARTICLE XXII
EXEMPTION FROM TAXES A

Sec. 79. Exemption from Real Property Tax. ~ All rail properties in the form of land,
right-of-way, depot, stations, tracks, office buildings, and terminals are exempted from the
payment of real property tax and those which have already been due to the government shall
be deemed condoned entirely.

Sec. 80. Exemption from Income Tax. ~ The incomes of the Authority that are derived
from the operations of its railway systems shall be exempted from the payment of income tax.

Sec. 81. Exemption from Payment of Customs, Duties and Charges. — Any
importation of goods and/or equipment for the building of railway systems and for the
maintenance and operation of railway systems shall be free from the payment of customs,
duties, and other forms of fees and charges.

ARTICLE XXIV
REVENUES

Sec. 82. Rail Revenues. ~ Rail revenues shall consist of all incomes derived from the
ridership, freight and trackage fees. ’

Sec. 83. Non-Rail Revenues. — Non-rail revenues shall consist of all incomes
generated from commercial, advertisement and real estate development programs.
ARTICLE XXV
INSURANCE COVERAGE

Sec. 84. Rail Systems Insurance Coverage. ~ All rail systems shall be covered by
insurance from natural and man-made disaster either by the Government Service Insurance

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System (GSIS) or by a self-insurance system in the form of a Common Trust Fund that the
Authority may establish for the purpose for all public railway operators.

Sec, 85. Passenger's Insurance Coverage. ~ Each and every rail passenger shall be »
covered by accident insurance by the rail operators, government or private, in the amount of
One Hundred Thousand Pesos (100,000.00) in case of death and not more than Fifty
Thousand Pesos (P50,000.00) in case of an injury exclusive of medical and hospitalization
expense.

Sec. 86. Premiums. — After five (5) years from the date of the establishment of the
Common Trust Fund and every three (3) years thereafter, a portion of the trust fund may be
used for rail projects and programs by 2/3 votes of the members of the Board of Directors of
the Philippine National Railway Authority.

Sec. 87. Fund Administrator. — The Common Trust Fund authorized under this
Article may be administered by a group of financial experts when, in the judgment of the
Board, the need for it arises, otherwise, the Authority shall administer and manage such fund.

ARTICLE XXVI
ACCOUNTABILITY

Sec. 88. 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 the
Commission may promulgate from time to time pursuant to its constitutional mandate.

Sec. 89, Transparency. — The Authority and its subsidiaries shall be transparent in all
its affairs and financial transactions.

ARTICLE XXVI
PUNISHABLE ACTS AND ADMINISTRATIVE PENALTIES

Sec. 90. Intrusion. — The entry, intrusion, occupation, settlement, possession and
construction on the properties described in Section 43 Article XI hereof shall be considered a
crime against property and punishable by imprisonment ranging from six (6) months and one
(1) day to wo (2) years and or fined in an amount not lower than Ten Thousand Pesos
(P10,000. 00) as maybe determined by the court.

Sec. 91. Obstruction. — Any person who obstructs or impedes the construction,
operation, repair, maintenance and removal of any track, rolling stock or railway facilities
shall be criminally liable and the punishment by imprisonment ranging from two (2) years 9
and one (1) day to three (3) years.

Sec. 92. Theft of Railway Property. — Any person who is found to have stolen any part
of a track or rolling stock shall be punished by imprisonment of six (6) years and one (1) day
to twelve (12) years and a fine of One Hundred Thousand Pesos (P100, 000. 00) Pesos, or
both at the direction of the Court.


Sec. 93. Administrative Penalties. ‘The Authority may impose a fine or penalty or

both, against the operator and/or its agents who commits any or all of the following acts of
violations:

a.

Exceeding the authorized speed limit of his rolling stock shall be punished with: (1) a
fine of One Hundred Thousand Pesos P 100,000.00) for the first offense; (2) a fine of
Three Hundred Thousand Pesos (P300,000.00) for the second offense; and (3) a fine
of Five Hundred Thousand Pesos (P500,000.00) for the third offense;

. Failure to properly maintain the system resulting to service interruption shall be

fined: (1) Fifty Thousand Pesos (P50,000.00) to One Hundred Thousand Pesos
(P100,000.00) for the first offense; (2) One Hundred Thousand Pesos (P 100,000.00)
to Two Hundred Thousand Pesos (P200,000.00) for the second offense; and (3) Two
Hundred Thousand Pesos (P200,000.00) to Three Hundred Thousand Pesos
(P300,000.00) for the third offense;

. Failure to secure Annual Passengers Insurance Coverage shall be fined Ten Million

Pesos (P10,000,000.00);

|. Failure to operate shall be fined with One Million Pesos (P1,000,000.00) for every

day of non-operation, and cancellation of its franchise or authority after thirty (30)
days of non-operation, except when caused by force majeure or fortuitous event;

Failure to comply with safety and security regulations resulting to injury or loss of
life and damage to property shall be fined with Fifty Thousand Pesos (P50,000.00)
for injury and Three Hundred Thousand Pesos (P300,000.00) for every loss of
human life;

’
Failure to maintain adequate spare parts inventory shall be fined with an amount
equivalent to the cost of the required spare parts;

- Failure to maintain a maintenance and accident record shall be fined with: (1) One

Hundred Thousand Pesos (P100,000.00) for the first offense;( 2) Two Hundred
Thousand Pesos (P200,000.00) for the second offense; and (3) Three Hundred
Thousand Pesos (P300,000.00);

|. Failure to comply with regulations on cleanliness and sanitation shall be fined with:

(1) One Hundred Thousand Pesos (P100,000.00) for the first offense;(2) Two
Hundred Thousand Pesos (P200,000.00) for the second offense; and (3) Three
Hundred Thousand Pesos P300,000.00) for the third offense; and

‘ailure to comply with orders, decisions and similar issuances of the Authority shall
be fined with One Hundred Thousand Pesos (P100,000.00) for every day of non-
compliance.

ARTICLE XXVIII

BUDGETARY SUPPORT '

Sec. 94. Initial Funding Support. - The Amount of Five Hundred Million Pesos

(P500,000,000. 00) and Fifty Million Pesos (PS50,000,000.00) shall be allocated to the

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Authority and the Regulatory Board respectively, out of the unprogrammed fund in the
General Appropriation as initial funding support to these two (2) bodies.

Sec. 95. Annual Budgetary Support, ~The annual budgetary requirements of the
Authority and the Regulatory Board and other raifway institutions created under this Act shall
be provided in the Annual General Appropriations Act.

ARTICLE XXIX
APPLICABILITY OF THIS ACT

Sec. 96. Applicability of this Act. This Act shall apply to the development and}
implementation of railway projects and the operations of railway systems in the country, both
public and private.

ARTICLE XXX
APPLICABILITY OF EXISTING LAWS AND REGULATIONS

Sec. 97. Applicability. — In so far as they are not inconsistent with this Act, the
provisions of the Corporation Code and Republic Act 6957 otherwise known as “An Act
Authorizing the Financing, Construction, Operations and Maintenance of Infrastructure
Projects by the Private Sector and For Other Purposes” shall be applicable to the operation of
the Authority.

ARTICLE XXXI
CONSOLIDATION OF EXISTING RAIL.
OFFICES AND AGENCIES

See. 98. Consolidation. ~ Upon the approval of this Act, The Philippine Nationaly
Railways (PNR), the Light Rail Transit Authority (LRTA), the Panay Railways,
Incorporated, the North Luzon Railway Corporation (NORTHRAIL) and all other rail offices
and agencies shall be deemed abolished upon the approval of this Act and their functions,
projects, assets and liabilities shall be assumed, absorbed and transferred to the Authority.
‘The Authority shall be given a transition period of six (6) months to one (1) year to carry out
this provision of this Act.

Sec. 99. ~ The assets and liabilities of the EDSA Light Rail Transit of the Department
of Transportation and Communications in so far as its existing Build-Lease Transfer Contract
with the Metro Rail Transit Corporation (MRTC) are likewise deemed transferred to, and
assumed by, the Authority.

Sec. 100. Valuation. - The assets of the existing railway offices and agencies
mentioned in Section 100 hereof shall be valued by the Commission on Audit, and their
respective liabilities determined by the Commission on Audit and Department of Finance.

Sec. 101. — The plantilla personnel of the existing rail offices and agencies holding
either permanent or contractual positions may be absorbed by the Authority or retired from

’
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the service, subject to existing laws, rules and regulations and the guidelines that the
Department of Budget and Management may issue for this purpose.

ARTICLE XXXII
CONGRESSIONAL OVERSIGHT COMMITTEE

Sec. 102. — Congressional Oversight Committee. A Congressional Oversight

Committez is hereby created composed of the Chairpersons of the Committee on Public

Services of the Senate and the Committee ov Transportation and Communications of the

House of the Representatives as Chairpersons and four (4) members from each House as

Members, 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

ARTICLE XXXUI
SEPARABILITY AND REPEALING CLAUSES

Sec. 103. _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. 104. Repealing Clause. — The provisions of Republic Act No. 1156, as amended
and Executive Order No. 603, as amended, 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.

ARTICLE XXXIV
EFFECTIVITY

See. 105, Effectivity. - This Act shall take effect fifteen (15) days following its
publication in at least two (2) newspapers of general circulation.

Approved,