SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No. 8055

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez Jr.

EXPLANATORY NOTE

This bill seeks to create the Mindanao Railways Corporation as a means of
hastening the development of the island.

The experience of Japan, Canada, the United States and most of Europe
shows how their railr vad networks have sped up the national development. In these
nations, railroads opened up vast land areas, thereby making it possible for
tremendous numbers of people to settle and huge volumes of goods to be
transported there at the lowest cost. The influx of people into areas previously
unsettled and the easy availability of goods needed for civilized life means higher
productivity of the land

A railroad network crisscrossing Mindanao will considerably shorten the
distance, for example, between Zamboanga and Cagayan de Oro or Davao and
Cagayan de Oro. That will, in turn, mean a shortening of the travel time of the people
of the goods whose end destination is the Visayas or Luzon or beyond our northern
shores or vice versa

We must benefit from the experience of other lands whose railway systems up
to today provide people and goods the cheapest and fastest way of moving in volume

overland.
Wa
RUF Os
MAXIMO B. RODRIGUE:

Approval of this bill is thus, requested

JR.



SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No. 3055

Introduced by Representative Maximo B. Rodriguez Jr. and
Representative Rufus B. Rodriguez

AN ACT
CREATING THE MINDANAO RAILWAYS CORPORATION PRESCRIBING ITS
POWERS, FUNCTIONS AND DUTIES, AND PROVIDING FOR THE NECESSARY
FUNDS FOR ITS OPERATION

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
transportation system for the whole island of Mindanao is hereby created, to be
known as the Mindanao Railways Corporation, which for purposes of this Act shall be
called the Corporation. The Corporation shall exist for a term of fifty (50) years from
the date of approval of this Act. It shall have its main office in Cagayan de Oro City
and shall have such branches and agencies within or outside the Philippines as may
be necessary for the proper conduct of its business.

SECTION 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 between any point in Mindanao; and

b) As an auxiliary to its main purpose, to own and/or operate powerhouses,
hotels, restaurants, terminals, warehouses, timber concessions, coal mines, iron and
other mineral properties and to manufacture roiling stocks, equipment, tools and
other appliances, to construct and operate in connection with its railroad lines, toll
viaducts, toll tunnels and the like.

SECTION 3. 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) Generally, to exercise all powers of a corporation under the Corporation
Law.

It shall also have the power of eminent domain.

SECTION 4. Authorized Capital Stock of the Corporation. — The

authorized capital stock of the Corporation shall be One Billion (P1,000,000,000.00)
Pesos divided into Ten Million (10,000,000) shares at par value shares of One
Hundred (P100,00) Pesos each, which shall be fully subscribed by the Philippine
Government, twenty percent of which or Two Hundred Million (P200,000,000.00)
Pesos shall be initially paid-up and the balance shall be paid from a continuing

annual appropriation of nat less than Two Hundred Million (P200,000,000.00) Pesos


which is hereby appropriated, out of any funds in the National Treasury not otherwise
appropriated. The said amount shall be programmed and released by the Budget
Commission in accordance with the schedule of cash requirements to be prepared
and submitted by the Mindanao Railways Corporation; Provided, that this continuing
annual appropriation of Two Hundred Million (R200,000,000.00) Pesos and the
programming and release thereof shall remain in force until the authorized capital
subscribed by the Government shall have been paid in full.

SECTION 5. Loans. - The Corporation is hereby authorized to contract
loans, credits and indebtedness in any domestic or convertible foreign currency, or
capital goods, from foreign governments, their agéncies, instrumentalities or financial
institutions, or any non-governmental national or international financial institutions or
firms extending suppliers credit deferred payment arrangement or other fund
sources, or to issue bonds, the total outstanding amount of which, exclusive of
interests, shall not exceed Five Hundred Million ($500,000,000.00) United States
dollars or the equivalent thereof in other currencies; on such terms and conditions as
it shall deem appropriate for the accomplishment of its purpose and to enter into and
execute documents and other documents specifying such terms and conditions.

The President of the Philippines, through the Secretary of Finance, is hereby
authorized to guarantee, absolutely and unconditionally as primary obligor and not as
surety merely, in the fiari’aiid.on Behalf of the Republic of the Philippines, the
payment of the loans, credits, indebtedness and bond issued up to the amount herein
authorized which shall be over and above the amount which the President of the

Philippines is authorized to guarantee under Republic Act Numbered Sixty-One


Hundred and Forty-Two as amended, as well as the performance of all or any of the
obligations undertaken by the Corporation in the territory of the Republic of the
Philippines pursuant to loan agreements entered into with foreign governments or

any international financial institutions or fund sources.

The loans, credits and indebtedness contracted under this section and the
payment of the principal, interest and other charges thereon, as well as the
importation of machinery, equipment, materials, supplies and services, by the
Corporation, paid from the proceeds of any loan, credit or indebtedness incurred
under this Act, shall also be exempted from all charges and restrictions previously
and presently imposed and to be imposed by the Republic of the Philippines, or any

of its agencies and political subdivisions.

SECTION 6. Board of Directors, Composition and Appointment. - The

corporate powers of the Corporation shall be vested in and exercised by the Board of
Directors consisting of a Chairman, vice-chairman and nine members who shall be
appointed by the President of the Philippines with the consent of the Commission on
Appointments. The members of the Board shall serve as designated by the President
in their appointments for terms of six years from the date they qualify and assume
office except that any person chosen to fill a vacancy shall serve only for the
unexpired term of the member whom he succeeds. For actual attendance of Board
Meetings, each such members shall receive a per diem of One Thousand

(P1,000.00) Pesos. The Board meetings may not exceed four times a month.


SECTION 7. Qualifications of Officials. — The Chairman, Vice-Chairman.

members of the Board of Directors and the General Manager of the Corporation shall
be Filipino citizens, at least 35 years of age at the time of their appointments and
holders of degrees in the field of engineering, economics, business management and
related courses. In addition, a masteral degree in the same field and/or experience in
railway management and operations for at least five (5) years is preferable. All such
officials must be residents of Mindanao for at least five (5) years prior to the

appointments

SECTION 8. 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 by laws, rules and regulations governing
the manner in which the general business and corporation 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.

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 members may, for cause, suspend and/or remove the General Manager.

¢) To approve, the annual and/or such supplemental budgets of the

Corporations which may be submitted to it by the General Manager from time to time.


SECTION 9. 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.

SECTION 10. 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 law.

SECTION 11. Managing Head. — The management of the Corporation shall

be vested in the General Manager.

SECTION 12. 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
participate 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 and to the Congress of the Philippines:


d) To appoint and fix the number and the 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 Corporation, and 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.

SECTION 13. Appointment _and Promotion of Personnel. — In the

appointment and promotion of officers and employees of the MRC merit and
efficiency shall serve as basis, and no political test or qualification shall be prescribed

and considered for such appointments or promotions.

SECTION 14. Exemption from Taxes, 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 and this exemption shall extend to port charges upon vessels whose
entire cargo consists of materials for the construction of the prescribed port charges
on other vessels as the tonnage of materials for such constructions or equipment

may bear to the tonnage of the entire cargo of the vessel

SECTION 15. 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 duties. The number and salaries of the
Auditor and said personnel shall be determined by the Commission on Audit, subject
to appropriation by the Board of Directors. In _ 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

Corporation

b) Report - The financial transactions 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 of each fiscal year,
by the representative of the Commission on Audit, through the latter, to be Board of
Directors of the Corporation, and copies thereof shall be furnished the President of
the Philippines, the Secretary of Transportation and Communications and the
Presiding Officers of the two Houses of Congress. 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
and expenses; a statement of 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 also shows specifically any program, expenditures or


other financial transaction or undertaking observed in the course of the audit, which

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

SECTION 16. Legal Counsel. - The Corporation shall have its own legal
department, the chief and members of which shall be appointed by the Board of

Directors.

SECTION 17. Exemption from the Land Transportation Commission Act.

— The Corporation shall not be subject to the authority and supervision of the Land

Transportation Commission.

SECTION 18. 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 years after the time o 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 any 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.

SECTION 19. 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 in its

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.

SECTION 20. 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.

SECTION 21. 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.

SECTION 22. Repeal or Modifications. ~ The provisions of Republic Act No.
4156, as amended, creating the Philippine National Railways and all Acts, Executive
Orders, and Proclamations or parts thereof inconsistent with any of the provisions of

this Act, are hereby repealed or modified accordingly

SECTION 23. Separability Clause. — \n the event any provision of this act or
the application of such provision to any person or circumstances is declared
unconstitutional, the remainder of this Act or the application of said provision to other

persons or circumstances shall not be affected thereby.
SECTION 24. Effectivity.— This Act shall take effect upon its approval.

Approved,