Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
‘Second Regular Session

6959

R. SY-ALVARADO

HOUSE BILL NO.

EXPLANATORY NOTE

The establishment of a national railway system is the solution to the congestion and
pollution of the metropolitan areas and the traffic problem in the major urban centers all over the
country. It will provide cheaper, faster, safer and reliable mass transport system; facilitate the
movement of people, goods and services; decongest the metropolis; depollute the metropolitan
areas; enhance agricultural productivity; encourage investments and accelerate industrialization;
enhance tourism in the countryside; promote inter-regional trade and commerce; decentralize
development to the rural areas; reduce national dependence on oil imports; reduce the
importation of vehicles; reduce the cost of road maintenance; facilitate the collection and
transportation of garbage; and generate job opportunities.

The national railway system is essential to the development of a country. An efficient,
reliable and convenient railway system provides the necessary mobility and efficiency to its
passengers. It also facilitates the movement and trade of goods and services. Although the
Philippines has operating railways — in terms of tracks covered in kilometers, the number of
working trains coaches, and the areas reached by the railway system — the country falls far
behind in contrast to its neighbors. Further, the deficiency is made worse by the fact that there is
regulatory chaos since there is no central authority regulating the Philippine railway system.

It is high time for the Filipino people to reap the foregoing benefits that they have been
long denied of. A national railway industry in the Philippines will accelerate national progress
and prosperity and ensure our country’s global competitiveness. The enactment of a National
Railway Act has been over-due long before the food and fuel crisis that many countries of the
whole world now suffer. The Act will ensure an efficient and effective mass transport system
nationwide that will facilitate the movement of people, goods and services around the country,

In view of the foregoing, the early passage of this bill is earnestly sought.

4KUYA” JOSB/ANTONIO R. SY-ALVARADO
Representative
First District of Bulacan


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 6359
Introduced by: “KUYA” JOSE ANTONIO R. SY-ALVARADO

AN ACT
RESTRUCTURING THE PHILIPPINE NATIONAL RAILWAY SYSTEM, CREATING
THE PHILIPPINE RAILWAY AUTHORITY, THE PHILIPPINE RAILWAY
CORPORATIONS, APPROPRIATING FUNDS THEREFOR AND FOR OTHER
PURPOSES

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

ARTICLE I
GENERAL PROVISIONS

SEC. 1. Title. This Act shall be known as the “Philippine National Railway
Restructuring Act of 2017”.

SEC. 2. Declaration of Policy — It is the policy of the State to utilize railway systems as
an instrument for national progress and prosperity. Toward this end, it shall be established a
nationwide railway system that is cost-effective, safe, reliable, efficient, state-of-the-art,
accessible, sustainable and compliant with international standards.

ARTICLE I
PHILIPPINE NATIONAL RAILWAY DEVELOPMENT AUTHORITY

SEC. 3. Creation of the Philippine National Railway Authority. ~ There is hereby created
a body corporate to be known as the Philippine National Railway Authority (“PNRA”),
hereinafter referred to as the Authority which shall have the attribute of perpetual succession and
shall be vested with the powers of a corporation. It shall establish its principal office in
Metropolitan Manila, unless otherwise provided by the Authority, and may put up branches as
may be necessary.

SEC. 4. Mandate. — The Authority shall regulate all aspects of the operations of the
Railway Corporations, presently operating, those created under this Act, as well as such other
railway corporations which may be established in the future. Said mandate of the Authority shall
apply to railway entities owned and/or operated either by government or by the private sector.

SEC. 5. Powers of the Authority. — As a corporate body, the Authority shall have the
following powers, duties and functions:

(a) To succeed in its corporate name, to sue and be sued in such corporate name and to
adopt, alter and use a corporate seal which shalll be judicially noticed;

(b) To adopt, amend, and repeal its By-Laws;


(c) To enter into, make perform and carry out contracts of every class and description which
are necessary and incidental to the realization of its purposes with any person, firm or
corporation, private or public;

(d) To acquire, own, hold, administer and lease such real and personal properties as it deems
necessary or convenient in governing its affairs and to encumber, lease, mortgage, sell,
alienate or otherwise dispose of the same except its right-of-way;

(c) To enter into any obligation, assign or accept the assignment of and rescind any
agreement or contract necessary or incidental to the proper functioning of the Authority;

(f) To prescribe, fix and regulate the scheduled, frequency and route of railway services;

(g) To privatize any part or all of the railway system or any sub-system under the supervision
‘and regulation of the Authority, with the prior approval of Congress, and to permit the
party that acquires the system an authority to operate the same subject first to the grant of
a congressional franchise;

(h) To formulate and adopt a master plan for a modern national railway system with
ecological and environmental standards;

(i) To order the cessation of operations or any and all activities related to the railway system
upon the recommendation of the concerned railway safety/security officer;

(j) To call upon any government agency or instrumentality for such assistance as maybe
necessary in the discharge of its duties and functions;

(k) To promulgate such rules and regulations as may be necessary to carry out the objectives
of this Act;

(1) To perform such other powers as may be necessary to carry out the purpose of this Act.

ARTICLE Ut
RAILWAY STANDARDS

SEC. 6. Standards. — In order to sustain the development of the railway industry, enhance
the operations of railway systems and ensure the safety and security of the railway riding public,
and protect them from any form of natural calamities and man-made disasters, the Board shall set
the necessary routes, fares, and standards on safety and security, and facilities for the easy access
by persons with disabilities (PWD) and senior citizens, to be observed by all railway operators,
be they public or private. The fare and standards on safety and security must be compliant with
international standards and best practices.

SEC. 7. Rules and Regulations. — The Board shall formulate rules and regulations on the
following

(a) Uniform standards and specifications with respect to rolling stock, track and structural
facilities and other railway equipment and apparatus;


(b) Construction, maintenance, repair and removal of track and structural facilities;

(c) Permanent and temporary fencing of right-of-way and structural facilities including the
apportionment of costs in relation thereto;

(4) Track crossing and its usages;

(©) Installation and use of signage, warning signals, barriers, operating signals and other
similar apparatus;

(£) Qualifications of persons operating rolling stock and of persons carrying out functions
regarding the operation of track and of other equipment and matters ancillary to the
operation of rolling stock;

(g) Materials, equipment and technology to be used for the building and construction of the
railway systems;

(h) Tariff, rates and other fees and charges;

(i) Railway security and safety; and

(i) Imposition of fines and penalties.

ARTICLE IV
BOARD OF DIRECTORS

SEC. 8. Board of Directors; Composition. — The powers and functions of the Authority
shall be exercised through a Board of Directors, hereinafter referred to as the Board, to be
composed of five (5) members: the secretary of the Department of Transportation as the
Chairman, the three (3) general managers of the railway corporation, and one (1) member from
the private sector appointed by the President of the Philippines, for a term, or terms, in
accordance to Republic Act (RA) 10149.

Members of the Board shall receive a per diem of not more than ten thousand pesos (Php
10,000.00), or as otherwise set by the Department of Budget and Management, for every board
meeting; Provided, however, that the per diem collected per month does not exceed the
equivalent four (4) meetings.

SEC. 9. Functions, Meetings, Quorum and Reports of the Board. ~ The Board of Directors
shall be the policy-making body of the Authority and shall perform the following powers and
functions:

(a) Determine the organizational structure of the Authority, define the duties and
responsibilities of all officials and employees and adopt a compensation and benefit
scheme that shall be subject to the approval of the Governance Commission on
Government-Owned and Controlled Corporations (GCG),


(b) Appoint all officials down to the third level and authorize the Administrator of the
Authority to appoint all others.

(c) Formulate policies, rules and regulations, plans and projects and programs;

(d) Establish financial and operations targets for management as the basis for evaluating and
monitoring corporate performance;

(©) Authorize such expenditures for the effective and efficient administration and operations
of the Authority; and

(f) Submit an annual report of the operation of the Authority, through the Secretary of the
DOTr, to the President of the Philippines, Senate President of the Philippines, and
Speaker of the House of Representatives;

(g) Meetings of the Board — The Board shall meet regularly once every month at its principal
office. There must be notice to all members of the Board, sent through electronic or
traditional means, at least three (3) days before said meeting. The Board may also
conduct special meetings whenever necessary.

‘A majority of the members shall constitute a quorum for the transaction of corporate
business, and every decision of at least a majority of the members present, at which there
is a quorum, shall be valid as a corporate act, except for the election of officers which
shall require the vote of a majority of all the members of the board.

ARTICLE V
ADMINISTRATION OF THE AUTHORITY

SEC. 10. The Administrator. ~ The general conduct of the operations and management of
the Authority shall be vested in an Administrator with the rank and privileges of an
Undersecretary who shall serve as Chief Executive Officer of the Authority. He shall be
primarily responsible for carrying out the projects and programs of the Authority as well as for
the implementation of its policies, rules and regulations, including the faithful execution of the
decisions of the Board.

SEC. 11. Qualifications. ~ The Administrator must be a citizen of the Philippines, at least
thirty-five (35) years of age on the day of his/her appointment, of good moral character and with
recognized executive ability and competence in the field of transportation, business
administration, management, finance or law. He shall be appointed by the President of the
Republic of the Philippines for a term or terms, in accordance with RA 10149.

SEC. 12. Duties and Responsibilites of the Administrator. - The Administrator of the
Authority shall have the following duties and responsibilities;

(a) Execute, administer and implement the policies and measures approved by the Board;

(b) Direct and supervise the operations and administration of the Authority insofar as
regulating the operation of railways;


(c) Direct and supervise the preparation of the agenda for the meeting of the Board, and to
submit for the consideration of the Board such measures as he believes necessary to carry
out the purposes and objectives of the Act;

(d) Represent the Authority in all its transactions with other offices, agencies and
instrumentalities of the government and to deal with any persons and entities, public or
private, domestic or foreign, on matters related to the mandate of the Authority;

(e) Prepare the annual and supplemental budgets of the Authority; and

(f) Exercise such other powers and perform such other duties and function as the Board may
assign or authorize.

ARTICLE VI
RAILWAY CORPORATIONS

SEC. 13. Railway Corporations: Name, Duration, and Domicile. — There is hereby
created three (3) separate and distinct government corporations which shall operate railways in
the islands of Luzon, Visayas, and Mindanao, to be known, respectively as, Luzon Railway
Corporation (“LRC”), the Visayas Railway Corporation (“VRC”), and the Mindanao Railway
Corporation (“MRC”). Said Corporations shall exist for a term of fifty (50) years from the date
of approval of this Act, renewable for another fifty (50) years upon the approval of the President
of the Philippines.

The LRC shall have its main office in Clark, Pampanga, the VRC in Panay Island, and the
MRC in Tagum City, Davao, and shall have such branches within their respective areas of
jurisdiction as may be necessary for the proper conduct of their business.

SEC. 14. Powers of the Railway Corporation. ~ The Railway Corporations herein created
shall have the following powers

(a) To exercise the right of eminent domain whenever necessary for the attainment of its
objectives;

(b) To borrow money and contract loans, credits, or indebtedness from domestic or foreign
sources for the furtherance of its goals and objectives;

(c) 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

(d) Generally, to exercise all powers of a corporation under Batas Pambansa Blg. 68
otherwise known as the “The Corporation Code of the Philippines,” as amended

(e) To construct, own lease, operate and maintain public utilities, infrastructure facilities and
such auxiliary support services needed to develop and regulate a nationwide railway
system;


() To design, construct, maintain and operate by itself or by delegation to, or through
contractual arrangement such auxiliary infrastructure support facilities such as, but not
limited to, parking structures above or below the ground, including the means of access;

(g) To own or operate railroad trainways and subways for the purpose of transporting, for
consideration, passengers, mails, and property between any point in their respective areas
of operation through the use of railways; and

(h) 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 rolling stocks, equipment, tools, and other
appliances; to construct and operate in connection with its railroad lines, toll viaducts, toll
tunnels, and the like.

Further, the assets, liabilities, powers, and functions of public railway entities, which are
‘owned by the government, shall, upon effectivity of this Act, be transferred and absorbed by the
appropriate railway corporation, and all such public railway entities shall be deemed abolished.

SEC. 15. Authorized Capital Stock of the Railway Corporation. — The authorized capital
stock of each Railway Corporation shall be Thirty Billion Pesos (Php 30,000,000,000.00)
divided into Fifteen Million Pesos (Php 15,000,000.00) common shares with a par value of Two
Thousand Pesos (Php 2,000.00) each, which shall be fully subscribed by the National
Government and other government institutions, corporations, instrumentalities, and agencies,
whether national or local, within the framework of their respective charters, twenty percent
(20%) of which or Six Billion Pesos (Php 6,000,000,000.00) shall be initially paid-up and the
balance shall be paid from a continuing annual appropriation of not less than Two Billion Pesos
(Php 2,000,000,000.00), which is hereby 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 each Railway Corporation;
Provided, that this continuing annual appropriation of Two Billion Pesos (Php 2,000,000,000.00)
and the programming and release thereof shall remain in force until the authorized capital
subscribed by the Government shall have been paid in full.

SEC. 16. Board of Directors, Composition, and Appointment. ~ The corporate powers of
each Railway Corporation shall be vested in the Board composed of seven (7) Directors. The
Undersecretary from the DOTr shall be the Chairperson and the Secretary of Finance shall be the
Co-Chair, both acting in their ex-officio capacity. The remaining five (5) members shall be
appointed by the President for a term, or terms, in accordance with RA 10149.

Members of the Board shall receive a per diem of not more than ten thousand pesos (Php
10,000.00), or as otherwise decided by the DBM, for every board meeting: Provided, however,
that the per diem collected per month does not exceed the equivalent four (4) meetings.

SEC. 17. Qualifications of Appointive Members of the Board. ~ The appointive members
of the Board of Directors shall be Filipino citizens, at least thirty-five (35) years of age at the
time of their apointments, and holders of degrees in the fields of transport planning, engineering,
economics, management, finance, marketing, law, or related course, with preference for those
with masteral degrees in such fields or work experience in railway management and operations
for at least five (5) years. All such official must be residents of the place where the respective
corporations they work for hold their primary office for business, at least one (1) year prior to
their respective appointments. Further, they shall be persons of good moral character, competent,
and experienced in one or more of the following fields: transport planning, engineering,
economics, management, finance, corporate law, or marketing.


SEC. 18. Powers and Duties of the Board of Directors. ~ The Board of Directors shall
have the following powers and duties:

a) To prescribe, amend, or repeal by-laws, rules and regulations, or policies governing the
manner in which the general business of the Railway Corporation may be exercised;

b)

To fix the compensation of the General Manager and Assistant General Managers,
subject to the approval of the Government Commission on Government-Owned and
Controlled Corporations (GCG), and to appoint and fix the compensation of the other
officers of the Corporation;

©

To approve, the annual and/or such annual supplemental budgets of the Corporation;

d)

By a two-thirds (2/3) vote of all members, to recommend to the President the suspension
or removal for cause of the General Manager or Assistant General Manager(s);

a

Upon the recommendation of the General Manager, to approve the appointment of all
officials of the Corporation from the rank of division head and above;

f) Subject to the provisions of applicable laws and regulations, and upon recommendation
of the General Manager, to reorganize the Railway Corporation, determine its staffing
pattern, or define the functions and duties of organization units and personnel; and

8)

To expropriate, with rightful compensation, in accordance with RA 10752, the necessary
right of way needed by the Corporation to acquire, maintain, and/or expand its track
lines.

SEC. 19. General Manager of the Railway Corporation. — The management and day-to-day
operations of each Railway Corporation shall be vested in the General Manager who shall be
appointed by the President of the Republic of the Philippines, upon the recommendation of the
Board of Directors of said Railway Corporation. The General Manager shall possess technical
competence in management, preferably in railroad transport management, have demonstrated
executive ability, and be of good moral character. The General Manager shall hold office for a
term of eight (8) years.

SEC. 20. 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 Railway Corporation on behalf of
the Board of Directors, subject to the policies, rules, and regulations established by the
latter;

1)

To sit in all meeting of the Board as a resource person, and to participate in its
deliberations, with no right to vote, and to preside in any meeting for or in the absence of
the Chairman;

°)

To recommend to the Board short-and-long range plans and programs consistent with the
overall objectives of the Railway Corporation;


d) To submit and recommend consolidated annual budget and propose capital and other
supplemental budgets to the Board;

6

To appoint officials and employees below the rank of a division head and to suspend or
otherwise discipline for cause, all subordinate officials and employees of the Corporation;
Provided, however, that in the case of removal for cause, approval of the Board shall be
necessary.

f) To recommend to the Board such changes in the organizational structure and staffing
patterns of the Corporation as may be necessary to carry out its functions effectively;

To submit to the President of the Philippines, the Senate President, and the Speaker of the
House of Representatives, within sixty (60) days after the close of each fiscal year, an
annual report on the operations of the Railway Corporation or such other reports as may
be required; and

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

SEC. 21. Exemption from Taxes, Duties, Port Charges or Dues, and Customs Bonds. — The
Railway Corporations hereby created shall be exempt from the payment of all taxes of any kind
and nature such as those imposed by the municipal, city, provincial, or national government
including the Value-Added Tax (VAT), upon its capital stock, franchise, right of way, earning,
and all other property owned or operated by it in relation to its principal and auxiliary purposes,
and all import duties on all railway materials, rolling stocks, spare parts, supplies and equipment
imported in the Philippines for and/or by the Railway Corporation: Provided, That this
exemption shall extend to wharfare dues, storage charges, arrastre, and shipside charges, and
special duties on such importations, and other port charges upon the carrying vessels whose
entire cargo consists of materials for the construction of its projects or rehabilitation of its lines,
facilities, and to such proportion of the prescribed port charges on other vessels as the tonnage of
materials for such construction or equipment may bear to the tonnage of the entire cargo of the
vessel: Provided, further, that such exemption shall further extend to the filling 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. 22. Audit Personnel and Report. —

a) Personnel —- The Commission on Audit (“COA”) shall appoint an Auditor for each of the
Railway Corporations, and the necessary personnel to assist said representative/s in the
performance of their respective duties. The number and salaries of the Auditor’s and said
personnel shall be determined and paid by the COA.

b) Report — The report of audit of each fiscal year, by the Auditor of the Railway
Corporations he assigned to, to the Board of Directors of the Railway Corporation, and
copies thereof shall be furnished the President of the Republic of the Philippines, the
Secretary of Transportation, Senate President of the Philippines, and 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 of 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 shall also show 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 or law.

SEC. 23. Liquidation. - When its term of existence has expired in accordance with the
provisions of this Act, the Railway 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 any
and convey its properties, but not for the purpose of continuing the business for which it was
established.

ARTICLE VII
CONSTRUCTION OF RAILWAYS

SEC. 24. Construction of Railways and Highway Crossing Track. - Construction of any
form and kind of railway track such as track crossing, intersections, joints, or connections that
unites with any existing railway track or structural facilities for purposes of developing a railway
shall not be allowed without prior approval of the Authority. Construction on, across, over or
under a highway without prior approval of the Authority shall likewise not be allowed.

SEC. 25. Structural Change. ~ No change or replacement of any existing railway structure or
methodology shall be allowed without prior approval of the Authority.

SEC. 26. Right of Entry and Disturbance Fee. — A railway operator or his authorized agent,
including the Railway Corporation herein created, bringing in equipment and materials to a piece
of land may gain access to such land to construct or maintain a rail system or to repair a rolling
stock, track or structural facilities of a public railway, subject to the payment of a disturbance fee
in such amounts as may be determined by the Authority.

SEC. 27. Highway Crossing. - When the construction is carried out to lay track on, across,
‘over or under a highway, the person carrying out the construction shall allow vehicles using the
highway adequate passages, and on the completion of the construction restore the highway to its
acceptable passable condition.

SEC. 28. Crossing Construction. ~ Subject to the approval of the Authority, the owner of a
private road may be allowed to construct and maintain at his own cost, either an underpass or
overpass crossing across the right-of-way that already existed prior to the construction of his
private road. However, if the private road was in existence before the rail right-of-way was
established, the railway owner/operator is responsible for the cost of constructing and
maintaining the crossing,

SEC. 29. Crossing of Landowners. ~ Any proponent of a railway project shall provide an
access road in between lands cut crossed by the project when public interest so demands.

SEC. 30, Cost. ~ When a railway operator is unable to agree with the road authority as to the
cost apportionment associated with the construction of projects under this article, the parties may
Tesort to arbitration.

SEC. 31. Fencing of Railway Track. — The operators of railway systems when public safety
demands as may be determined by the Authority, shall provide the necessary fences along
railway tracks.

SEC. 32. Drainage. — In the construction of railways, the Authority shall ensure that
appropriate and adequate drainage and sanitary facilities are provided. No construction of
railways shall be allowed by the Authority without such facilities.



SEC. 33. Fire Prevention. ~ All railway operators shall provide their railway systems all the
necessary fire-fighting equipment and adopt ways and means to protect their systems and
‘commuters from fire or damages arising there from.

SEC. 34. Soppage. ~ When the construction or work poses danger to person or property, the
Safety Officer may immediately order the stoppage of the construction or work unless
constrained by the Authority.

ARTICLE VIII
RIGHT-OF-WAY

SEC. 35. Right-of-Way. ~ The Authority, upon consultation with the Railway Corporations
herein created, shall identify and establish within three (3) years after the approval of this Act,
the alignment of a National Railway System and once established and the right-of-way is
acquired, the same shall not be the object of any sale, lease or other forms of disposition.

SEC. 36. Intrusion into the Right-of-Way. — Any intrusion into the right-of-way by any
person shall be punishable by imprisonment as provided under Section 92, Article XVII hereof.

ARTICLE IX
EXPROPRIATION AND OVERRIDING
OBJECTIVE OF CONSTRUCTION

SEC. 37. Expropriation. — The Railway Corporations herein created may initiate the
necessary expropriation proceedings to carry out the objectives of this Act.

SEC. 38. Ejection. — Any person or group of persons who enter, intrude, occupy, settle,
possess, construct into the railway alignment or right-of-way or any property owned by any
railway office or controlled corporations, or local government units (LGUs) agency shall be
considered as nuisance per se and shall be summarily ejected from the premises such entry,
intrusion, occupation, settlement, possession and construction shall be considered as a criminal
act and therefore punishable under Section 73, Article XXI hereof.

SEC. 39, Suspension. — When the construction or work in a railway project is not being
carried out in accordance of the approved specifications relative to design and product standards,
the Safety Officer may order the suspension of the construction or work until after correction
shall have been made by the contractor or its resumption is ordered by the Authority.

SEC. 40. Prohibiion Against Issuance of Restraining Orders and Preliminary Injunctions or
Preliminary Mandatory Injunctions. — No court in the Philippines, except the Supreme Court,
shall have the jurisdiction to issue any restraining order, preliminary injunction, or preliminary
mandatory injunction in any case, dispute, or controversy involving any contract or project being
implemented by the Authority, to prohibit any person or persons, or entity or government official
from proceeding with, or continuing the execution or implementation of such contract or project,
or pursuing any lawful activity necessary for the execution, implementation or operation of such
railway project/system.

ARTICLE X
RAILWAY OPERATIONS

SEC. 41. Operations. - The operator of a railway, including the Railway Corporations herein
created, shall ensure that the track and other railway facilities are constructed, operated and
maintained in accordance with this Act, pertinent rules and regulations implementing the same
and policies that may be promulgated by the Authority and the Railway Regulatory Board and
that the rolling stock is maintained and operated in accordance with applicable rules and
regulations promulgated by the Authority and the Regulatory Board


SEC. 42. Suspension and Termination. ~ Any operator of a public or industrial railway,
including the Railway Corporations herein created, who intend to suspend or terminate its
operation shall, within six (6) months, prior to the suspension or termination, give notice thereof
to the Authority and to the public.

ARTICLE XI
SAFETY AND SECURITY OFFICERS

SEC. 43. Safety Officer. - The Railway Corporations shall have Safety Officers with the
following duties and functions:

a. Administer and foster faithful compliance with railway safety legislations, approvals and
operating rules and regulations;

b. Ensure the safety at all times of rolling stocks, railway tracks, signaling and
communication systems and other facilities

c. Conduct regularly safety audit of railway system including a check on inventory levels of
essential spare parts; and

. Ensure the safety of the general riding public and of persons employed by or acting on
behalf of operator of railways;

SEC. 44. Qualifications. - No one shall be appointed as a Safety Officer unless he is a
graduate of a course related to railway safety and passes the examination given by the
Professional Regulatory Commission for the purpose.

SEC. 45. Security Officer. ~ There shall be created positions of Security Officers with the
following duties and functions:

a. Administer and foster faithful compliance .with railway security legislations, approvals
and operating rules and regulations;

b. Ensure the security of the general riding public and of persons employed by or acting on
behalf of operators of railways; and

c. Ensure the installation of the state of the art surveillance and tracking equipment for
passengers and cargo.

SEC. 46. Qualifications, ~ No one shall be appointed as a Security Officer unless he is a
graduate of a course related to security and passes the examination given by the Professional
Regulatory Commission for the purpose.

ARTICLE XI
MAINTENANCE

SEC. 47. Proper Maintenance. — There shall be created a Maintenance Group headed by a
Maintenance Engineer, in every railway line with the following duties and functions:

a. Ensure that the economic lifespan of the system is attained through rehabilitation,
refurbishment and overhauling;

b. Ensure continuous and efficient operation of the system;


c. Ensure a continued availability of spare parts in the inventory;

d. Ensure the repair and maintenance of the rolling stock, track or structural facilities.

ARTICLE XI
COMPLIANCE, ACCIDENTS AND ADMINISTRATIVE PENALTIES

SEC. 48. Inspection of Railways. ~The Authority shall also have a Railway Safety or
Security Officer who shall carry out inspections of the following:

a. Rolling stock, trade, goods, and other facilities; and

b. Record, document, object or thing that relates to the operations of railway.

SEC. 49, Access. — A Railway Safety or Security Officer, in carrying out an inspection
may do one or more of the following:

a. Enter any track, structural facility, rolling stock, building or any other property
associated with railways;

b. Make inquiries with any person who is employed by or who carries out any duties or
functions for or in behalf of the railway operator; and

c. Perform or caused to be performed tests and examinations of anything related to the
inspection.

SEC. 50. Production of Documents. ~ In the course of safety and security inspection, the
officer conducting the inspection may require the production of any documents, records or things
relative thereto.

Any person who is the subject of an inspection shall, when requested to do so by a
railway Safety Officer, produce for inspection, within reasonable period of time, any record,
document, object or thing that relates to the matter under inspection. A railway Safety Officer
may request copies or take photographs of the record, document, object or thing under inspection
and immediately thereafter return the same.

When conducting an inspection of a record, document, object or thing and a railway
Safety or Security Officer is of the opinion that he must retain possession of the record,
document, object or thing under inspection for a longer period of time, he may do so but shall be
no longer than three (3) days after receipt thereof.

SEC. 51. Directions of Railway Safety Officer. - When a railway safety officer carries
out an inspection, he may do one or more of the following:

a. Recommend the cessation of the operation of any railway system or any activity
related thereto when in his expert opinion, there are reasonable grounds to believe
that the continuing operation of the railway system and any related activity, may
endanger the safety of the riding public and the employees of the railway or cause
damage to property;


b. Order the removal of a rolling stock or any equipment or any person on board, when
the railway safety officer is of the opinion that the operation or presence of the same
poses danger to the safety of the public or persons employed by or acting on behalf of
the operator unless restrained by the National Railway Authority; and

c. Issue orders to stop the over-speeding of a train when violations are being committed
related to the speed of the rolling stock.

SEC. 52. Accidents. — The railway operator shall keep a record of every accident
involving a person or the railway system and shall forthwith report to the Authority.

SEC. 53. Investigation. — The Authority shall conduct an investigation on accidents
provided for in the immediate preceding section, and for this purpose, the investigating officer
shall have full access to the place and attributes of the accident.

SEC. 54, Liability. — The operator and his agent shall be jointly and solidarily liable for
the fines and penalties provided under this Article.

SEC. 55. Execution. — When the operator and/or agent fails to pay the administrative
penalty in accordance with this Article, the Authority shall take all the necessary legal actions to
compel the payment of the administrative legal penalties and fines against the operator and his
agent.

ARTICLE XIV
REVIEW

SEC. 56. Review/Appeal. ~ Any order issued by a Safety or Security Officer may be
appealed for review by the affected person to the Authority within Fifteen (15) working days
from notice thereof whose decision shall be final and executor.

SEC. 57. Motion for Reconsideration. — Any person affected by an order or decision of
the Authority may file a motion for reconsideration within Fifteen (15) working days from
receipt of thereof. No second motion for reconsideration shall be entertained.

ARTICLE XV
RAILWAY ENERGY PLANT

SEC. 58. Power Plant. — In order to ensure a continuous and uninterrupted operation of
railway systems in the Philippines, the Corporations herein created may establish a power plant
for any of its rail systems: Provided, that before it can put up a power plant, the Authority shall
undertake a cost-benefit analysis on this matter in order to determine its cost-effectiveness,
viability and whether it is going to be advantageous to the government.

SEC. 59. Waste-to-Energy Plant. ~ The Authority shall establish in cooperation with
LGUs and/or private sector, waste-to-energy plant in strategic areas in the country.

ARTICLE XVI
TRANSFER OF RAILWAY TECHNOLOGY

SEC. 60. Railway Engineering Course. — A four (4)-year baccalaureate course in
Railway Engineering Management and other related courses shall be established in the
University of the Philippines and/or the Polytechnic University of the Philippines and shall


receive an annual budgetary support which shall be provided in the Annual General
Appropriations Act.

SEC. 61. Railway Training Center. ~ A Railway Training Center shall be established by
the Authority to equip the railway manpower resource with the necessary skills and expertise in
the development and implementation of railway projects and program, and in the operation of
railway systems.

SEC. 62. Manufacturing of Railway Equipment. - The Authority may endeavor to
establish the necessary mechanisms for the manufacturing of railway equipment to ensure the
expansion and sustainability of a National Railway System herein envisioned.

ARTICLE XVIL
TRAIN DRIVERS

SEC. 63. Train Drivers. — To promote proficiency and to ensure the safety of the general
railway riding public, all train drivers must be physically and mentally fit and pass all the tests
and qualifications to be prescribed by the Authority. They shall also undergo constant and
continuing training to improve their level of skills, with annual certification examinations to test
the same.

SEC. 64, Train Driver's License. — The Railway Training Center shall conduct the
training for train drivers for a duration that it may determine and thereafter issue the necessary
Train Driver’s License (TDL) for those who will pass the training according to its standards,
tests and measurements.

ARTICLE XVIII
INSURANCE COVERAGE

SEC. 65. Rail Systems Insurance Coverage. — All rail systems shall be covered by
insurance from natural and man-made disaster by the Government Service Insurance System
(GSIS). In the event the management and/or operation of the railway system or any part thereof
with a private entity, the insurance shall be covered by an insurance corporation which attained
the lowest, most responsive bid after a competitive bidding process, taking into consideration the
provisions of this Article.

SEC. 66. Passenger’s Insurance Coverage. - Each and every rail passenger shall be
covered by accident insurance by the rail operators, government or private, in the amount of Two
Hundred Thousand Pesos (Php 200,000.00) in case of death and not more than One Hundred
Thousand Pesos (Php 100,00.00) in case of an injury exclusive of medical and hospitalization
expense, and these amounts shall be adjusted once every five (5) years based on inflation as
determined by the National Economic Development Authority (“NEDA”).

ARTICLE XIX
ACOUNTABILITY

SEC. 67. Accountability. — To ensure public accountability, the Authority shall be subject
to the audit of the Commission on Audit (COA) and shall comply with all the generally accepted
accounting and auditing rules and regulations and those which the Commission may promulgate
from time to time pursuant to its constitutional mandate.


ARTICLE XX
LEGISLATIVE FRANCHISE

SEC. 68, Legislative Franchise. — All railway operators are required to secure a franchise
from the Congress of the Philippines. Entities already operating with an existing franchise shall
have one (1) year during which it must renew the same.

Any entity from the private sector may own, construct, maintain and operate a railway
system, Provided that it shall be a holder of the appropriate legislative franchise prior to the
construction, maintenance and/or operation of a railway system, and Provided, further, that such
railway system shall not conflict with that already being operated, managed and maintained by
the Railway Corporations herein created.

SEC. 69. Violation of Legislative Franchise. — Any person holding a legislative franchise
which commits a violation of said franchise shall be subject to the review of the Congress of the
Philippines, which may amend, modify, revoke or cancel its franchise, whichever is applicable,
and without prejudice to the other punishable act and imposable penalties under this Article, if
any.

ARTICLE XXI
PENALTIES

SEC. 70. Intrusion. — The entry, intrusion, occupation, settlement, possession and
construction on the properties described in Section 43, Article XI hereof shall be considered a
crime against property and punishable by imprisonment ranging from six (6) months and one (1)
day to two (2) years and or fined in an amount not lower than Ten Thousand Pesos (Php
10,000.00) as may be determined by the court.

SEC. 71. Obstruction. — Any person who obstructs or impedes the construction,
operation, repair, maintenance and removal of any track, rolling stock or railway facilities shall
be criminally liable and the punishment by imprisonment ranging from two (2) years and one (1)
day to three (3) years.

SEC. 72. Theft of Railway Property. — Any person who is found to have stolen any part
of a track or rolling stock shall be punished by imprisonment of six (6) years and one day to
twelve (12) years and a fine of One Million Pesos (Php 1,000,000.00), or both at the direction of
the Court.

SEC. 73. Administrative Penalties. — The Authority may impose a fine or penalty or both,
against the operator and/or its agents who commits any or all of the following acts of violations:

a. Exceeding the authorized speed limit of his rolling stock shall be punished with: (1) a
fine of One Hundred Thousand Pesos (Php 100,00.00) for the first offense; (2) a fine of
Three Hundred Thousand Pesos (Php 300,000.00) for the second offense; and (3) a fine
of Five Hundred Thousand Pesos (Php 500,000.00) for the third offense;

b. Failure to properly maintain the system resulting to service interruption shalll be fined: (1)
One Hundred Thousand Pesos (Php 100,000.00) to Two Hundred Thousand Pesos (Php
200,000.00) for the first offense; (2) Two Hundred Thousand Pesos (Php 200,000.00) to
Three Hundred Thousand Pesos (Php 300,000.00) for the second offense; and (3) Three
Hundred Thousand Pesos (Php 300,000.00) to Five Hundred Thousand Pesos (Php
500,000.00) for the third offense;

c. Failure to secure Annual Passengers Insurance Coverage shall be fined Ten Million Pesos
(Php 10,000,000.00);


d. Failure to operate shall be fined with One Million Pesos (Php 1,000,000.00) for every day
of non-operation, and cancellation of its franchise or authority after thirty (30) days of
non-operation, except when caused by force majeuere or fortuitous event;

e. Failure to comply with safety and security regulations resulting to injury or loss of life
and damage to property shall be fined with One Hundred Thousand Pesos (Php
100,000.00) for injury and Five Hundred Thousand Pesos (Php 500,000.00) for every loss
of human life.

f Failure to maintain adequate spare parts inventory shall be fined with an amount
equivalent to the cost of the required spare parts;

g. Failure to maintain a maintenance and accident record shall be fined with: (1) One
Hundred Thousand Pesos (Php 100,000.00) for the first offense; (2) Two Hundred
Thousand Pesos (Php 200,000.00) for the second offense; and (3) Three Hundred
Thousand Pesos (Php 300,000.00);

h. Failure to comply with regulations on cleanliness and sanitation shall be fined with: (1)
One Hundred Thousand Pesos (Php 100,000.00) for the first offense; (2) Two Hundred
Thousand Pesos (Php 200,000.00) for the second offense; and (3) Three Hundred
Thousand Pesos (Php 300,000.00) for the third offense; and

i. Failure to comply with orders, decisions and similar issuances of the Authority shall be
fined with One Hundred Thousand Pesos (Php 100,000.00) for every day of non-
compliance.

ARTICLE XXII
CONSOLIDATION OF EXISTING RAIL OFFICES AND AGENCIES

SEC. 74. Consolidation. — Upon the effectivity of this Act, the Philippine National
Railways (PNR), the Light Rail Transit Authority (LRTA), the Panay Railways Incorporated,
the North Luzon Railway Corporation (NORTHRAIL), and all other rail offices and agencies
shall be deemed abolished and their functions, projects, assets and liabilities shall be assumed,
absorbed and transferred to the appropriate Railway Corporation, as the case may be. The
Railway Corporations herein created shall be given a transition period of six (6) months to one
(1) year to carry out the provision of this Act.

SEC. 75. — The assets and liabilities of the EDSA Light Rail Transit of the Department of
‘Transportation in so far as its existing Build-Lease Transfer Contract with the Metro Rail Transit
Corporation (MRTC) are likewise deemed transferred to, and assumed by, the Luzon Railway
Corporation.

SEC. 76. Valuation. ~ The assets of the existing railway offices and agencies mentioned
in Section 100 hereof shall be valued by the Commission on Audit, and their respective liabilities
determined by the Commission on Audit and Department of Finance.

SEC. 77. Personnel. ~ All affected Officers and Personnel who are qualified to receive
retirement benefits under RA 1616 and RA 660 shall be entitled to an additional one (1) month
salary for every year of service. Any Officers or Personnel may avail of the same benefits as
provided by the immediately preceding paragraph; provided that they voluntarily separate or


retire from the service. Provided, further, that they are qualified to receive retirement benefits
under RA 1616 and RA 660.

Affected Officers and Personnel shall be all Officers and Employees who are
involuntarily removed or separated from the service due to the abolition of their respective
agencies by this Act.

ARTICLE XXII
CONGRESSIONAL OVERSIGHT COMMITTEE

SEC. 78. Congressional Oversight Committee ~ A Congressional Oversight Committee
is hereby created composed of the Chairpersons of the Committee on Public Services of the
Senate and the Committee on Transportation of the House of Representatives as Chairpersons
and four (4) members from each House as Member, to be designated by the Senate President and
the Speaker of the House of Representatives, respectively. The Oversight Committee, shall
among others, monitor and ensure the effective implementation of this Act.

ARTICLE XXIV
SEPARABILITY AND REPEALING CLAUSES

SEC. 79. Separability Clause — If any provisions of this Act is declared invalid, the
provisions thereof not affected by such declaration shall remain in force and effect.

SEC. 80. Repealing Clause - The provisions of Republic Act No. 1156, as amended and
Executive Order No. 603, as amended, are hereby repealed.

ARTICLE XV
EFFECTIVITY

SEC. 81. Effectivity — Act shall take effect fifteen (15) days following its publication
in at least two (2) newspapess’6f general circulation.

Approved,