Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session
1761

House Bill No.

Introduced by Hon. Joseph F. Violago

EXPLANATORY NOTE

The Philippine National Railways used to operate in 479 kilometers of route from La
Union up to the Bicol region. However, due to neglect and mismanagement, PNR's coverage was
greatly reduced. On the North Main Line, it served the provinces of Bulacan, Pampanga, Tarlac,
Nueva Ecija, Pangasinan and La Union and on the South Main Line, Batangas. Due to its decline,
buses became the most favorable mode of transport.

It was reported many times before that the North Main Line will be partly replaced
under the current Northrail Project, but due to the numerous problems-legai, technical and
administrative— as well as unresolved funding controversies and anomalies hounding the
project, we could not expect any swift resolution of these complexities and an effective start of
this project in the years to come.

Hence, this project is proposed.

It is of common knowledge that all vehicles coming from Northern Luzon going to the
National Capital Region and vice-versa either passes at McArthur Highway in the western board
or at Maharlika Highway, formally known as Pan-Philippine Highway in the east.

These strategic highways cover the provinces of Tarlac and Nueva Ecija-—no goods and
passenger reach Manila without having to pass either route.

Yet, despite its strategic locations in facilitating economic development, the full potentials
of Central Luzon is not realized. True, they are considered the powerhouses in grain production,
alongside its sister provinces and one of the biggest contributors to the nation's economy, but its
industrial progress still remains distant as it lacks the necessary nexus and. infrastructure
development that could propel it to be one powerful industrial center while at the same time
contributing to the rapid development of tourism in the provinces of Northern Luzon.

Verily, this proposed railway network will immensely benefit the region's populace in
terms of faster and safer transport services, but will also accelerate trade and commercial
activities and enhance the productivity of the people not just in the region but also in all of the
northern provinces of Luzon.

Just imagine its potentials when connecting trains from Pangasinan leading to La Union
in the years ahead will link up with this proposed railway system of Central Luzon could
complete an ideal rail transport network that would certainly usher in a booming agricultural
development and industrialization. With a simultaneous rehabilitation and revitalization of the
Bicol railway network, the country would have achieved an integrated modern and efficient
railway network leading to all of Luzon's airports and seaports, carrying thousands of people


and goods everyday, with Central Luzon serving as the primary dynamo and model for the such
goal and vision.

One-stop central depots for grains and other agricultural products could also be
developed in both Tarlac City, San Jose City and Clark, Angeles City which will reduce
considerably the cost of transporting goods to Manila and which will help ease traffic congestion
in Metro Manila. The mobility of those going to the North Luzon will also be improved.

In view of the myriad and optimal benefits to socio-economic development that this
proposed bill seeks to attain, the passage of this measure is earnestly requested.

ye
CX a4
HON. JOSEPH F, VIOLAGO

Representative
2e4 District, Nueva Ecija


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session
176

House Bill No.

Introduced by Hon. Joseph Gilbert F. Violago

AN ACT
CREATING THE CENTRAL LUZON RAILWAYS CORPORATION, PRESCRIBING ITS
POWERS, FUNCTIONS AND DUTIES, AND PROVIDING FUNDS THEREFOR,

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

SECTION 1. Name, Duration and Domicile. - A corporation to serve as the
instrumentality of the Government of the Philippines in providing a railroad and the
transportation system for Central Luzon is hereby created, to be known as the Central Luzon
Railways Corporation, and hereafter referred to as the Corporation. The Corporation shall exist
for a term of fifty (50) years from the date of the approval of this Act. It shall have its main office
in San Jose City and shall have branches in Tarlac City and Angeles City. The construction of the
railway network shall consists of two phases within a period of ten (10) years: Phase 1 shall
include all the necessary construction works in San Jose City, Municipality of Muioz,
Municipality of Guimba, all in the Province of Nueva Ecija and the municipality of Victoria and
Tarlac City, all in the Province of Tarlac; Phase II shall cover all needed works from Tarlac City
to the Municipality of Capas, Tarlac leading to its last station in Clark, Angeles City, Pampanga.

SEC. 2. Purposes and Specific Powers. - The Corporation shall have the following
purposes and specific powers:

(a) To own or operate railroads, tramways, and other kinds of land transportation,
vessels and pipelines, for the purpose of transporting for consideration, passengers,
mails and property from San Jose City to Tarlac City up to Clark, Pampanga.

(b) As an auxiliary to its main purpose, to own and/or manufacture rolling stocks,
equipment, tools and other appliances and to construct and operate in connection
with its railroad lines, toll viaducts, toll tunnels and the like.

SEC. 3. Authorized Capital Stock of Central Luzon Railways Corporation, - The
Authorized Capital Stock of the Central Luzon Railways Corporation shall be One Billion Pesos
(P1,000,000,000.00) divided into Ten Million (P10,000,000,00) shares at par value shares of one
hundred pesos each (P100.00) which shall be fully subscribed by the Philippine Government,
forty percent (40%) of which or Four Hundred million pesos (P400,000,000.00) shall be initially
paid-up and the balance shall be paid from a continuing annual appropriation of not less than
two hundred million pesos (P200,000,000) which is hereby appropriated from any funds in the
National Treasury not otherwise appropriated. The said amount shall be programmed and
released by the Department of Budget and Management (DBM) in accordance with the schedule
of cash requirements to be prepared and submitted by the Corporation.


Provided, That this continuing annual appropriation of Two Hundred million pesos
(P200,000,000.00) and the programming and release thereof shall remain in force until the
authorized capital subscribed by the Government shall have been paid in full.

Provided, further, that five (5%) from the proceeds of value-added tax shall be allocated
for ten (10) years starting from the passage of this Act to start the needed groundwork for its
expansion to cover the provinces of Bataan, Zambales and Bulacan and which allocation shall be
administered by the Department of Transportation and Communication (DOTC).

SEC. 4. General Powers. - The Corporation shalll have the following general powers:

(a) To do all such other things and to transact all such business directly or indirectly
necessary, incidental or conducive to the attainment of the purpose of the
corporation; and

(b) To exercise all powers of a railroad corporation under the Corporation Law.

SEC. 5. Board of Directors, Composition and Appointment. - The corporate powers of
the corporation shall be vested in and exercised by a Board of Directors of not more than seven
and not less than three members as may be fixed by the President of the Philippines, consisting
of chairman, vice-chairman, and other members appointed by the President of the Philippines.
‘The members of the Board need not be stockholders of the Corporation, The first members of the
Board shall serve as designated by the President in their appointments for terms of one, two, and
three years, respectively, from the date they qualify and assume office; but their successors shall
be appointed for terms of three, except that any person chosen to fill a vacancy shall serve only
for the unexpired term of the member whom he succeeds.

The Chairman and all the members of the Board must be residents of Central Luzon for at
least ten (10) years prior to the appointments.

SEC. 6. Powers and Duties of the Board of Directors. - The Board of Directors shall have
the following powers and duties:

(a) To prescribe, amend and repeal the by-laws, rules and regulations governing the
manner in which the general business of corporation may be exercised, including
provisions for the formation of such committee or committees as the Board of the
Directors may deem necessary to facilitate its business.

(b) To appoint and fix the compensation of the General Manager, subject to the approval
of the President of the Philippines, and to appoint and fix the compensation of the
other officers of the Corporation. The Board by a majority vote of all the members
may, for cause, suspend and/or remove the General Manager.

() To approve the annual and/or such supplemental budgets of the Corporation which
may be submitted to it by the General Manager from time to time.

SEC. 7. Suspension and Removal of Directors. - Any member of the Board of Directors
may, for cause, be suspended or removed by the President of the Philippines.

SEC. 8. Prohibition for Board Members. - No Chairman or member of the Board of
Directors of the Corporation shall at the same time serve in the Corporation in any capacity
whatsoever other than as Chairman or member thereof, unless otherwise authorized by the
President of the Philippines or existing law.


SEC. 9. Management. - The management of the Corporation shall be vested in the

General Manager.

SEC. 10. Powers and Duties of the General Manager. - The General Manager shall have
the following powers and duties:

(a)

(b)

©)

(a)

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To direct and manage the affairs and business of the Corporation on behalf of the
Board of Directors, and subject to its control and supervision;

To sit in all meetings of the Board of Directors, as Vice-chairman, and participates in
its deliberations, with the right to vote, and to preside any meetings for or in the
absence of the Chairman;

To submit within sixty (60) days after the close of each fiscal year an annual report,
through the Board of Directors, to the office of the President of the Philippines;

To appoint and fix the number and salaries, with the approval of the Board of
Directors, to remove, suspend, or otherwise discipline, for cause, any subordinate
employee of the Corporation; and

To perform such other duties as may be assigned to him by the Board of Directors
from time to time.

SEC. 11. Appointment and Promotion, - In the appointment and promotion of officers
and employees, merit and efficiency shall serve as basis, and no political test or qualification
shall be prescribed and considered for such appointments or promotions. Said officers and
employees shall be subject to the Civil Service Law, rules and regulations.

SEC. 12. Exemption from Taxes and Duties and Port Charges. - The Corporation is
hereby exempt from payment of all taxes of every name and nature-- municipal, city, provincial
or national—upon its capital stock, franchises, right of way, earnings, and all other property
owned or operated by it and all duties on all railways materials, supplies and equipment
imported in the Philippines for and/or by the said Corporation.

SEC. 13. Audit Personnel and Report. -

(a)

()

Personnel - The Commission on Audit shall appoint a representative who shall be
the Auditor of the Corporation, and the necessary personnel to assist said
representative in the performance of his/her duties.

Report ~ The financial transaction of the Corporation shall be audited in accordance
with law, administrative regulations and the principles and procedures applicable to
commercial corporate transactions. A report of audit for each fiscal year, by the
representative of the Commission on Audit, through the latter, to the Board of
directors of the Corporation, and copies thereof shall be furnished the President of
the Philippines, and the Chairmen of the Senate Committee on Public Services and
the House Committee on Transportation. The report shalll set forth the scope of the
audit and shall include a statement of assets and liabilities, capital and surplus or
deficit; a statement and surplus or deficit analysis; statement of income arid
expenses; a statement of sources and application of funds; and such
recommendations and information as may be necessary, together with such
recommendations with respect thereto as may be advisable, including a report of any
impairment of capital noted in the audit. The report also shows specifically any
program, expenditures or other financial transaction or undertaking observed in the


course of audit, which in the opinion of the Auditor, has been carried on or made
without authority of law.

SEC. 14. Legal Counsel. ~ The Corporation shall have its own Legal department, the chief
and members of which shall be appointed by the Board of Directors.

SEC. 15. Exemption from the Land Transportation Commission Act. - The Corporation
shalll not be subject to the authority and supervision of the Land Transportation Office and the
Philippine National Railways.

SEC. 16. Liquidation. - When its term or period of existence has expired in accordance
with the provision of this Act, the Corporation shall nevertheless continue as a body corporate
for three (3) years after the time of its dissolution for the purpose of prosecuting and defending
suits by or against it and of enabling it gradually to settle and close its affairs, to dispose of and
convey its properties, but not for the purpose of continuing the business for which it was
established. In order to carry out its liquidation, upon the dissolution of the Corporation, a Board
of Liquidators shall be appointed by the President to take charge of winding up its corporate
affairs and effecting its liquidation.

SEC. 17. Strikes During National Emergency. ~ The provisions of law to the contrary
notwithstanding, in cases of national emergency, or when in the opinion of the President of the
Philippines, the national security or interest is in imminent danger, employees and laborers of
the Corporation shall not strike for the purpose of securing changes or modification in their
terms and conditions of employment during said period of emergency.

SEC. 18. Reversion of General Funds. - All funds resulting from dissolution and
liquidation of the Corporation as herein provided shall revert to the general funds of the
Government.

SEC. 19. Applicability of the Corporation Law. ~ The provisions of the Corporation Law
which are not inconsistent with the provisions of this Act, shall be applicable to the corporation
created hereby.

SEC. 20. Repealing Clause. - The provisions of Republic Act No. 4156, as amended,
creating the Philippine National Railways and all acts, executive orders, administrative orders"
and proclamations or parts thereof inconsistent with any of the provision of this Act, are hereby
repealed or modified accordingly.

SEC. 21. Separabilitv Clause. - If any part or provision of this Act is declared invalid or
unconstitutional, the remaining parts or provisions not affected thereby, shall remain in full force
and effect.

SEC. 22. Effectivity Clause. ~ This Act shall take effect upon its approval.

Approved,