Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FOURTEENTH CONGRESS
First Regular Session

2614

House Bill No.

Introduced by Hon. Joseph Emilio A. 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
toads is concemed. 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 can't 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 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 econoniy 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 eamestly
sought.

REP. 'H EMILIC AYA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon city

FOURTEENTH CONGRESS
First Regular Session

House BillNo.__ 26.14

Introduced by Hon. Joseph Emilio A. 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 2010”.

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 shail 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 shail 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;


(ii) To adopt, alter, and use a corporate seal which shail 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;

(vy) 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;

(vii) 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;

(x) 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;

(xii) 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
comprehensive 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 government
agency or corporation in the development of any foreshore area:

(iv) 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 shail consist of the following:

() 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;

(ii) 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 director of the Board. They shall hold office for a period of 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), (ii) to (v) shall be ex-officio
members of the Board of Directors; Provided, that, in their absence the Directors
concerned 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 shail 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 shall
have the following powers, functions and duties:

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

(li) To manage the day to day affairs of the Authority, and ensure the
operational efficiency of al 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 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;

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

(vi) 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 shail be responsible to the Administrator of the Authority
and shail have the following general powers, functions and duties:

(i) 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;

(ili) 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:

(i) 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 a 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.

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 of the Authority up to the amount herein authorized.

e) All interests paid or payable by the Authority on its loans or other 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 shail 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.

SECTION 11. Auditor - a) The Commission on Audit (COA) shail 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 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 shal!
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 16. Effectivity - This Act shall take effect upon its publication
in at least two (2) newspaper of general circulation.

Approved.