Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

g2
House Bill No. 2624

Introduced by Rep. Herrnilando |. Mandanas
Second District, Batangas

EXPLANATORY NOTE

This bill seeks to amend Presidential Decree (PD) No 1113 (Granting the
Construction and Development Corporation of the Philippines (CDCP) a Franchise to
Operate, Construct and Maintain Toll Facilities in the North and South Luzon Toil
Expressways and for Other Purposes), by requiting CDCP’s successor entity, the
Philippine National Construction Corporation (PNCC) to turn over to the Government all
physical assets and facilities, including improvements thereon, together with equipment
and appurtenances directly related to the operations of the South Luzon Expressway,
without any cost or obligation to the Government

PD No 1112 created the Toll Regulatory Board (TRB), which was empowered to
(a) enter into contracts for the construction, operation and maintenance of toll facilities:
(b) issue, modify and promulgate rates of toll for use of toll facilities; and (c) grant
authority to operate a toll facility and issue the necessary Toll Operation Certificate. To
accomplish its purposes, TRB entered into a Toll Agreement with then CDCP, which
was granted a franchise to operate, construct and maintain toil facilities in the North and
South Luzon Expressways

PD No. 1113 granted CDCP a franchise with a term of thirty (30) years or until 1
May 2007, covering the expressway from Balintawak to Carmen, Rosales, Pangasinan,
and from Nichols, Pasay City to Lucena City, Quezon, including the right to collect toll
fees at such rates as may be fixed and/or authorized by the TRB for the use of
expressways.

In consideration of the franchise, Section 2, PD No 1113 provided that CDCP
shall: (a) pay a scheduled annual concession fees to cover the expenditure of
government for the construction of the North and South Luzon Expressways; (b)
construct at its own expense expansions of the expressways from Angeles City to
Rosales, Pangasinan, and from Calamba, Laguna to Lucena City; (c) reimburse the
Government for the construction and improvements from Burol, Balagtas, Bulacan, to
Angeles City; and (4) turn over the toll facilities and all equipment related thereto to the
government upon expiration of the franchise period without cost or obligation on the part
of the later. Meanwhile, CDCP was taken over by various government financial
institutions in 1983 and renamed as PNCC, which assumed the franchise rights of
CDCP over the expressways.

TRB reported to the House of Representatives in various committee hearings
during the Fourteenth Congress that PNCC has failed regularly to pay the scheduled
annual concession fees agreed upon with TRB, now reaching a total of more than P2
billion. PNCC also failed to extend the NLEX and SLEX as obligated under the
franchise.


In the ensuing years, PNCC's franchise under PD Nes. 1113 and 1864, expired
‘on 1 May 2007 without Congress renewing said franchise.

Section 9, PD No. 1113 provides that upon termination of the franchise period,
the physical assets and facilities including improvements thereon together with
equipment and appurtenances directly related {o their operations of the North and South
Luzon Expressways, turned over to CDCP (now PNCC) by the Government, shall be
transferred to the latter. Since PNCCs franchise expired without renewal thereat by
Congress, it follows that PNCC is bound to restore said physical assets and facilities

Accordingly, this bill seeks to amend PD No 1113, by requiring PNCC to restore
to the Government the aforesaid physical assets and facilities.

In view thereof approval of this bill is earnestly sought.

Lk p+
IERMILANDO I. MANDANAS



Republic of the Philippines

1
2 HOUSE OF REPRESENTATIVES
3 Quezon City
4
5 FIFTEENTH CONGRESS
6
7 First Regular Session
8 26
9 House BillNo, 2824
10
I
2D Introduced by Rep. Herrnilando |. Mandanas
13 Second District, Batangas
4
1S
16
7 AN ACT AMENDING PRESIDENTIAL DECREE NO. 1113,
18 REQUIRING PHILIPPINE NATIONAL CONSTRUCTION CORPORATION
19 TO TURN OVER ALL PHYSICAL ASSETS AND FACILITIES,
20 INCLUDING IMPROVEMENTS THEREON,
21 DIRECTLY RELATED TO THE OPERATIONS
2 OF THE NORTH AND SOUTH LUZON EXPRESSWAYS

TO THE GOVERNMENT THROUGH THE TOLL REGULATORY BOARD,
AT NO COST TO THE GOVERNMENT

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

SECTION 1. Section 9, Presidential Decree (PD) No 1113 is hereby amended to
read as follows

“Section 9. [For the purposes of this franchise, the Government,
shall turn over to the GRANTEE not later than April 30, 1977 all physical
assets and facilities including all equipment and appurtenances directly
related to the operations of the North and South Toll Expressways:
Provided, That, the extensions of such Expressways shall also be turned
over to GRANTEE upon completion of their construction or of functional
sections thereof: Provided, However, That upon termination of the
franchise period, said} IN VIEW OF THE EXPIRATION OF ITS
FRANCHISE ON 1 MAY 2007, AND THE NON-EXTENSION OF SAID
TERM BY CONGRESS, THE PHILIPPINE NATIONAL CONSTRUCTION
CORPORATION (PNCC) SHALL TURN OVER TO THE GOVERNMENT,
THROUGH THE TOLL REGULATORY BOARD (TRB), NOT LATER
THAN SIX (6) MONTHS UPON ENACTMENT HEREOF, all physical
assets and facilities including improvements thereon, together with
equipment and appurtenances directly related to their operations, shall be
turned over to the Government without any cost or obligation on the part of
the latter.

SEC. 2. All acts, decrees, orders, executive orders, instructions, rules and
regulations or parts thereof inconsistent with the provisions cf this Act are repealed or
modified accordingly.

SEC. 3. This Act shall take effect thirty (30) days after its approval and publication
in the Official Gazette or in two (2) newspapers of general circulation

APPROVED.