Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

1236

House Bill No.

Introduced by Representative MICAELA S. 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—
legal, 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 m 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 modem and efficient railway network leading to all of Luzon's
airports and seaports, carrying thousands of people and goods every day, with
Central Luzon serving as the primary dynamo and model for 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
ICAELA S. wo


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No.__1236_

Introduced by Representative MICAELA S. VIOLAGO

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

Be it enacted by the Senate and 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 Mufioz, 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) shalll 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,

SEC. 4. General Powers. - The Corporation shall 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 shalll 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.

(c) 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
m 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) 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;

(b) 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;

(d) 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

(e) 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.

(b) 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 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 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 shall 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. - \f 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,