Republic of the PI
HOUSE OF REPRESE!
Quezon City

TAGIVES

Seventeenth Congress
First Regular Session

HOUSE BILL No.3909

Introduced by Representative Manuel F. Zu

EXPLANATORY NOTE

With his unprecedented election as the very first President from Mindanao. President
Rodrigo Roa Duterte has identified as one of the main comerstones of his Presidency. the
Widespread development of public infrastructure in the entire Mindanao Region. Long neglected
in past administrations, Mindanao’s true potential as pethap~ the richest and most progressive
region of the country can only be realized if there is a more rational and focused approgeh in
public investments, most especially through the introduction of a mass railway system that will
encompass the Mindanao region's 106,000 square kilometre area.

The Constitution mandates in Section 21, Art. I! Declaration of Principles and State
Policies that the State shall promote comprehensive rural development, The Constitution, also
guarantees the basic human right to travel!. Recognizing the primacy of these Constitutional
mandates. Republic Act No. 4156 paved the way for the creation and implementation of the
Mindanao Railways Project (“MRP”).

Most recently. the NEDA has initiated the steps to finally put out a Feasibility Study, the
results of which will be vital to the implementation of this Act. The Terms of Reference of the
NEDA for the MRP declares, as follows?:

"The proposed railway transport service will play a major role towards
improvement of Mindanao’s intra island accessibility, linkages and seamless
multimodal transport networks, The island is strategically located and has
potential ax a major transshipment point and center of trade in the Brunei
Darussalam-Indonesia-Malaysia-Philippines Fast ASEAN Growth Area (BIMP-
EAGA) region,

Enhanced interconnectivity and linkages through passenger and freight
railway transport development will further boost tourism, trade and commerce in
the island: bring opportunities for the acceleration of local area development: and
expansion of local markets for more efficient movement of goods and people to
promote productivity and trade competitiveness.”

With the proper and soonest implementation of the MRP. it is hoped that a true and
lasting solution to the decades-long unrest within the region can finally be attained by having the
fruits of national development and economic progress reach all throughout the whole of
Mindanao. With the introduction of a region-wide railway. the safe and efficient movement of

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people and goods can only bring region-wide prosperity to the proud peoples of Mindanao.
Without diminishing the vital importance of the resulting political and security benefits that a
region-wide railways system in Mindanao would bring about, the most compelling reason for
MRP is the socio-economic upliftment of the lives of the more than 22 million Mindanao
residents. Clearly, lasting peace, stability and security are the necessary consequences of a well-
planned and properly-executed economic development scheme,

‘The critical role played by the successful introduction of the Mindanao Railways System
in bringing the Mindanao Region into the 21st Century cannot be emphasized enough. For this
reason. this proposed measure secks to create the Mindanao Railways Authority (“MRA”), ‘The
MRA shall be a national government agency under the Office of the President, which shall be
separate and distinet from the Philippine National Railways (*PNR”). It shall have as its primary
purpose the successful planning and implementation of the Mindanao Railways Project
(MRP"), Considering that the PNR*s herculean mandate for the upgrade and expansion of the
existing PNR railway’ system would most certainly divert most of its time and attention away
from the MRP, only the singular focus afforded by a single agency devoted to the MRP can
ensure the project’s success,

In view of the foregoing, the Authority to be created hefeunder shall be subject w the
required legislative and regulatory measures to ensure transparency and public accountability. It
will be under the lens of the Commission on Audit and will undergo the monitoring tools of the
National Economic Developnyent Authority such as Value Engineering and Value Analysis.
That the MRA shall be undey the Office of the President would ensure close coordination with
the him as well as riment of Budget and Management to ensure that funding for the
MRP would receive top priffity and be approved with dispatch,

With the successtyl and prompt implementation of the MRP, the dreams of a unified
country and peoples may finally be realized.

In view Othe fofebeing, the prompt

pproval of this Bill is earnestly sought,

MANUEL ANTO!
Represenlative
Bukidifon

OF. ZUBIRI



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

eventeenth Congress
irst Regular Session

3909

House Bill No.

Introduced by Representative Manuel F. Zubiri

AN ACT
CREATING THE MINDANAO RAILWAYS AUTHORITY (MRA), PRESCRIBING ITS.
POWERS, FUNC rHE PURPOSE REPUBLIC
ACT NO, 4156 F
RAILWAYS,

BY R. A. NO. 6366, APPROPRIATING FUNDS THEREFOR,
AND FOR OTHER PURPOSE:

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

CHAPTER I
TITLE, POLICY AND OBJECTIVE

SECTION 1. Short Title. -- This Act shall be known as the "Mindanao Railways
Development Act of 2016".

". 2. Declaration of Policy. -- \t is hereby declared the policy of the State to attain

inclusive growth and reduce poverty through infrastructure development aiming to improve the

sectoral performance of tourism. agriculture and industries: improve goods and mprove

the quality of the environment: and increase resilience to climate change and natural disasters,
through the establishment of a sustainable transport system that is safe, efficient, and

competitive.

ive rural development and assure the human

Further, in order to promote comprehe!

right to travel in Mindanao, the State shall (1) create a national government ageney to achieve its

development goals: and (2) provide appropriations for the construction, operation and

maintenance of the railways system and the operative budget of the national government agency



SEC. 3. Creation and Objectives. — There shall be created the Mindanao Railways
Authority. hereinafter called the Authority. which is a national government agency attached to

the Office of the President, with the followii

z immediate objectives:
a) To provide for the railways system in Mindanao connecting as vast an area as deemed

feasible in consideration of the Mindanao Railways Project (MRP) as mandated under the

Philippine National Railways Charter or Republic Act No. 4156, and, the MRP Feasibility Study
as an undertaking of the National Economic and Development Authority (NEDA) as Executing
Agency and the Department of Transportation and Communication (DOTC) as Implementing
Ageney and funded under the General Appropriations Act of FY 2014:

b) To initiate the provisions of An Act Facilitating The ‘Acquisition Of Right-Of Way
Site Or Location For National Government Infrastructure Projects or R. A. No. 10752 upon
effectivity of this Act: and

©) To call upon all concerned National Government Agencies and Local Government

Units to render technical and administrative

Support for the implementation of the provisions of
this Act.

CHAPTER IL
NATURE, SPECIFIC AND GENERAL POWER:

. 4. Name and Domicile. -- Yo carry out the foregoing

nsportation policy. the
Mindanao Railways Authority, shall be primarily responsible for the construction, operation and

maintenance of a railways transportation system in Mindanao. It shall have its main office in the

City of Davao. and shall have such branches and agencies vthin or outside the Philippines as

may be necessary for the proper conduct of its business.

SE

Purposes and Specific Powers. The Mindanao Railways Authority shall have

the following purposes and specifie powers:

4) To hold the assets of the Philippine National Railways, and to succeed to, or acquire,
maintain and operate such grants. concessions and franchises as are now held and enjoyed by the

PNR but limited only to those located in Mindanao among the aforementioned:


IE CEES 8 FOE
b) To own or operate railroads. tramways. and other kinds of land transportation. vessels
and pipelines, for the purpose of transporting, for consideration, passengers, mail and property
between any points in Mindanao: and
©) As an auxiliary to its main purpose. to own and/or operate powerhouses. hotels.

restaurant

s, terminals and warehouses: to manufacture rolling stock. equipment, tools and other
appliances: and, 10 construct and operate toll viaducts and toll tunnels. in connection with its
railroad lines.

SEC. 6. General Powers. The Authority shall have the following general power

a) To have conti

uous succession under its corporate name, until otherwise provided by

b) prescribe. amend,

¢) To adopt and use a seal and alter it a

d) To sue and be sued:

e) To contract any obligation or enter into, assign or accept the assignment of, and vary or

scind any agreement, contraet or obligation necessary or incidental to the proper management

of the Authority

1) To borrow funds from any source, private or public. foreign or domestic, and to issue

bonds and other evidence of indebtedness. the payment of which shall be guaranteed by the

National

Jovernment, subject to pertinent borrowing laws;

x) To acquire. receive. take and hold by bequest, devise, gift, purchase or lease, either

absolutely or in trust for any of its purposes, from foreign and domestic sources, any assets, grant
oF property. real or personal, subject to such limitations as are provided in existing laws; to
convey or dispose of such assets. grants. or properties. movable and immovable; and invest
and/or reinvest such proceeds and deal with and expand its assets and income in such a manner
as will best promote its objectives:

h) To improve. develop or alter any property held by it:

i) To cary on any business. either alone or in partnership with any other person or

persons:


j) To employ an agent or contractor or perform such things as the Authority may perform:

k) To exercise the it of eminent domaii

whenever the Authority deems it necess

for the attainment of its objectives:
1) To prescribe rules and regulations in the conduct of its general business as well as to

fix and implement the terms and conditions of its related activities:

m) To determine the fares payable by persons travelling on the rail system, in

nd the N

consultation with the Department of Transportati A:
n) To establish. operate, and maintain branches or field offices when required by the

of its business;

enigencie:

©) To determine its organizational structure and the number, positions and salaries of its

ww; and

personnel, subject to pertinent organization and compensati

p) To exercise such powers and perform such duties as may be necessary to carry out the

business and purposes for which the Authority was established or which, from time to time. may

be declared by the Board of Directors to be necessary, useful, incidental or auxiliary to

and generally, to exercis

pmplish such purpose all powers of any Authority under the

Corporation Law that are not inconsistent with the provisions of this Act, or with orders

pertaining to government corporate budgeting, organization, borrowing, or compensation.

CHAPTER TIL
THE MRA BOARD OF DIRECTORS

Sec. 7. The MRA Board of Directors. -- To carry out the purposes of this Act, the MRA
shall be directed and controlled by a Board of Directors. It shall be composed of the following
members:

a) Secretary of Transportation. as Chairperson:

b) MRA Administrator. as Vice-Chairperson:

€) Secretary of Finance:
d) Secretary of Economic Planning, Director General of the NEDA:
e) Secretary of Public Works and Highways: and

f) Two representative

from the private sector who shall each be selected from the

members of the Philippine Institute of Civil Engineers (PICE) and the Philippine Society of
6


Mechanical Engineers (PSME), to be appointed by the President of the Philippines who shall

select from three (3) nominees submitted separately by the PICE and PSME. They shall serve a
non-extendible single term of three (3) years.

The officials next in rank to. or such officials duly designated by, the regular members
shall serve as alternate members. except that, in the absence of the Chairman, the Board shall
clect a temporary presiding officer. The alternate members shall attend meetings of the Board
and committees assigned to them by their principals and receive the corresponding per diems.
whenever their principals are absent or said positions are vacant.

SEC. 8. Per Diem. -- The members of the Board shall not receive any compensation but
shall be provided with per diem at rates allowed under existing rules and regulations.

SEC. 9. Powers and Duties of the Board of Direc —The Board of Directors shall

ind du

have the following powers
a) To prescribe, amend and repeal, with the approval of the Administrator, the by-laws,
rules and regulations governing the manner in which the general business of the Authority may

be exercised. including provisions for the formation of such committee, or committees as the

Board of Directors may deem necessary to facilitate its business;

tion of the Adm:

trator and of the other officers of

+) To appoint and fix the compens

the Authority. with the approval of the President and the Director General of NEDA. The Board

by a majority vote of all the members. may. for cause, and with the approval of the President of

the Philippines. suspend and or remove the Administrator: and

©) To approve the annual and such supplemental budgets of the Authority which may be

submitted to it by the Administrator from time to time
SEC. 10. Suspension and Removal of Directors. - Any member of the Board of

Directors may be suspended or removed by the President of the Philippines.

EC. 11. Prohibition for Board Members. -- No chairman or member of the Board of
Directors shall at the same time serve in the Authority in any capacity whatsoever other than as
Chairman or member thereof, unless otherwise authorized by the President of the Philippines or

any existing law


CHAPTER IV
THE ADMINISTRATOR

SEC. 12. The Administrator. ~The management of the Authority shall be vested in the
Administrator.

SEC. 13. Powers and Duties of the Administrator. -- The Administrator shall have the
following powers and duties:

a) To direct and manage the affairs and business of the Authority on behalf of the Board
of Directors. and subject to its control and supervision:

+b) To sit in all meetings of the Board of Directors. as Vice-Chairman, and participate in
its deliberation, with the right to vote, and to preside any meetings for or in the absence of the

Chairman:

¢) To submit within cal year an annual report, through

y days after the close of each fi
the Board of Directors. to the Office of the President of the Philippines and the Congress of the
Philippines:

d) To appoint and fix the number and salaries, with the approval of the Board of

Directors. of such subordinate personnel as may be necessary for the proper discharge of the

duties and functions of the Authority, and with the approval of the Board of Directors, 10

remove, suspend, or otherwise discipline, for cause, any subordinate employee of the Authority:
and

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

SEC. 14. 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 Ser

¢ Law, rules and regulations.


CHAPTER V
MANDATED APPROPRIATIONS
SEC. 15. Appropriation. — Yo carry out the purposes of this Act. the amount of one
billion pesos (PhP1,000,000,000.00) is hereby authorized to be appropriated for the initial
operation of the Mindanao Railway Authority. Thereafter, the annual expenditures including

capital outlays of the Authority shall be provided in the General Appropriations Act.

CHAPTER VI

DUTIES AND CHARGES
SEC. 16. Exemption from taxes, duties, customs bonds and port charges.—The
Authority: is hereby exempt from payment of all nationel and local taxes upon its capital,

franchises. rights of way. earings, and all other property owned or operated by it and of all

duties on all railways materials, supplies and equipment imported into the Philippines for and by

the Authority, This exemption shall extend to port charges upon vessels whose entire cargo
consists of materials for the construction or equipment of the Authority, and, on other vessels to
such proportion of the prescribed port charges as the tonnage of materials for such constructions
or equipment may bear to the tonnage of the entire cargo of the vessel; and such exemption shall
further extend to the filing of general importer's and general documentary bonds and warehouse
bonds for the operation of its warehouses. whether general bonded warehouses or general order

store.

SEC. 17. 1

cempt loans. -- The project and program loans to be obtained by the

National Government for the purposes of this Act shall be exempt from the payment of all
national and local taxes.

CHAPTER VIL
AUDIT AND REPORTS

SEC. 18. Audit Personnel and Reports. — Vhe Authority shall be subject to the
Commission on Audit (COA) which shall have the power. authority, and duty to examine. audit,
and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of

funds and property of the Authority.


4) Personnel, -- The Chairman of the COA shall appoint a representative who shall be

the Auditor of the Authority, and the necessary personnel to assist said representative in the

performance of such duties. The number and salaries of the Auditor and said personnel shall be
determined by the the COA Chairman, subject to appropriation by the Board of Directors. In
case of disagreement. the matter shall be submitted to the President of the Philippines whose
decision shall be final. Said salaries and all other expenses of maintaining the Auditor's office

shall be paid by the Authority

+) Report. -- The financial transactions of the Authority 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 COA

Chairman, through the latter, to the Board of Directors of the vuthority, and copies thereof shall

be furnished the President of the Philippines, the Secretary of Economic Planning, the Senate

President and the Speaker of the House of Representatives. The report shall 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 analysi a statement of

statement of income and expense:

sources and application of funds: and such comments 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 shall also show 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 out or made without auth

rity of law.
SEC. 19. Legal Department. -- ‘The Authority shal! have its own legal department, the
chief and members of which shall be appointed by the Administrator with the approval of the
Board of Directors.
SEC. 20. Exemption from the LTFRB Law. -- The Authority shall not be subject to the

authority. supervision and control of the Land Transportation Franchisin

and Regulatory Board

(LTFRB). created under Executive Order No. 202, Series of 1987.

SEC. 21. Strikes during national emergency. —~ The prov

ions of law to the contrary

notwithstanding. in eases of national emergency. or when in the opinion of the President of the

10


Philippines, the national security or interest is in imminent danger, employees and laborers of the

ges or modification in their terms and

Authority shall not strike for the purpose of securing chat
conditions of employment during said period of emergency. Provided, however. That during the
implementation of this Act. management and labor should always strive to maintain industrial
peace by availing of and exhausting all methods of resolving all labor disputes to ensure the
continuous. effective and successful establishment of the Mindano Railways: Provided, further,

That the Authority may enter into collective ba

ining agreements, one for personnel of

supervisory rank and the other for personnel of non-supervisory rank regardless of the number of

recognized unions which may be or mi n organized therein

2C. 22. Applicability of the Corporation Law. ~~ The provisions of the Corporation

Law which are not inconsistent with the provision

of tms Act, shall be applicable to the

Authority

SEC. 23. Implementing Rules and Regulations, -- The Department of Transportation, in

consultation with concemed government agencies and stakeholders. shall promulgate the

implementing rules and regulations of this Act, within sixty (60) days from the effeetivity of this

Act.
SEC. 24. Congressional Oversight - The Congressional Oversight Committee on

Economic Affairs shall exercise oversight on the implementation of this Act

25, Separability Clause. ~ \t any portion of this Act is declared unconstitutional or

invalid. the portions or provisions which are not affe ied shell continue to be in full force and
effect,

SEC. 26. Repeating Clause.-- All laws, decrees. executive orders and rules and

regulations or parts thereof which are inconsistent with this Act are hereby repealed or modified

accord

. 27. Effectivity. - This Act shall take effect fifteen (15) days after its complete
publication in at least two (2) newspapers of general circulation and the Official Gazette

Approved.

cE