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

SEVENTEENTH CONGRESS.
1st Regular Session

REGISTRATION UNIT

House Bill No.__ 919 BILLS AND INDEX SERVICI:

Introduced by Hon. 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 road 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 loans or borrow funds can
undertake the construction or rehabilitation of an 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 cannot the Government do it? Indeed the Government,
whose only motivation is “service,” as contrasted to the private investor's “profit” is
believed more acceptable and beneficial in undertakings like this. Given the same
amount of financing, the Government can definitely construct more kilometres 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.

FRancis GERALD AGUIN ‘ABAYA

Representative, First rict, Cavite


eIrAaunrun

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 919

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 House of Representatives of the Philippines in Congress
assembled

SECTION 1. Title. - This Act shall be known as the “Road Development Act of
2016"

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 Metro 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:

() To succeed in its corporate name;

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

(iii) 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;


10
il
12
13
14
15
16
17
18
19

PeRRRY
RRBRE

Ww)

(vi)

(vii)

(vii)

(x)

&

(xi)

(xii)

(xi)

To make or enter contracts of any kind or nature to enable it to discharge its
functions under this Act;

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

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

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

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;

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

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;

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;

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:

0)

ii)

(ii)

(iv)

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

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;

To coordinate with the Bureau of Lands or any other government agency or
corporation in the developments of any foreshore area;

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 5. 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 a term of six (6)
years, unless sooner 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;

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

(iv) The Secretary of Transportation and Communications;

(v) The Secretary of Finance;

(vi) Two (2) other persons who shall be appointed by the President of the
Philippines, representing the private sector, who by reason of their knowledge
or experience are, in the opinion of the President, fit and proper persons to be
the director of the Board. They shall hold office for a period three (3) years
from the date of their appointment and shall be eligible for reappointment
upon the completion of such period;

b.) The Directors listed under sub-sections a), (ji) to (v) shall be ex-officio members of the
Board of Directors; Provided, that, in their 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;

c.) The members of the Board or their respective alternates shall receive a per diem of not
more than Five thousand Pesos (P5,000.00) 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

3


other government-owned and controlled 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 shall have the following powers, functions and duties:

0)

(ii)

(ii)

(iv)

Ww)

(vi)

b.) General

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

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

To sign contracts, to approve expenditures and payments within the budget
provisions, and generally to do alll acts for the proper and efficient operations
of the Authority;

To undertake research, studies, investigations and other activities and
projects to support the preparation of plans for the infrastructure projects that
has to be undertaken and submit the same for the information and approval of
the Board;

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

To perform such other duties as the Board may assign from time to time
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:

10)

(ii)

(ii)

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;

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

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 (P 200, 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 9. 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 as a prohibition or restriction on
the power of the Authority to create pledges, mortgages and other voluntary liens or
encumbrances or any property of the Authority;

c.) 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 shall be
exempt from taxes or 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 commercial system of accounting;

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

c.) 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 it relates.


wv

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;

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

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

4.) 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 it may appear necessary
to him/her.

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 fifteen (15) days following its
publication in the Official Gazette or in a newspaper of general circulation

Approved,