Republic of the Philippines

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HOUSE OF REPRESENTATIVES Re,
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SEVENTEENTH CONGRESS Some, 20 OCT 2016
First Regular Session

House Btli no. 4182

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Introduced by HON. GUS S. TAMBUNTING

EXPLANATORY NOTE

An affective and systematic mass transportation program provides a
significant positive economic impact. It creates transit investment on jobs and
business revenues and affirms a variety of broader indirect benefits.

On June 20 1964, Republic act No. 4156 entitled, "An Act creating the
Philippine National Railways, prescribing its powers, functions and duties, and
providing for the necessary funds for its operation" was approved. The said law
described PNR as a corporation to serve as the instrumentality of the Government of
the Philippines in providing a nation-wide railroad and transportation system.

This bill seeks to amend certain provisions of Republic Act No. 4156 in order
to adopt with the country’s present circumstances by institutionalizing the
revitalization, rehabilitation and modernization of the Philippines National Railways.

Republic Act 10638 was approved, the law provides for the extension of PNR's
corporate existence for another 50 years.

However, despite of the abovementioned grant of extension on its corporate
life, the PNR is said to run a "loss leader” operation, which means, the more trips the
train runs, the more losses it incur. This condition can be charged to its purely
manual operations as well as its aged and obsolete train system equipment and
facilities resulting to a poor operating potentials and high leakage rate.

Having said that, by continuing the operation of the PNR, without its charter
being amended, so as to adopt with the present condition of the economy, would
probably result to an end of PNR, which is believed to be one of the country's viable
solutions to curtail massive congestion economic in the country.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4182

Introduced by HON. GUS S. TAMBUNTING

AN ACT
PROMOTING THE REVITALIZATION, REHABIITATION AND
MODERNIZATION OF THE PHILIPPINE NATIONAL RAILWAYS, AMENDING
FOR THE PURPOSE CERTAIN PROVISIONS OF R.A. NO. 4156 ENTITLED
"AN ACT CREATING THE PHILIPPINE NATIONAL RAILWAYS,
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. Section 3 of Republic Act Four Thousand One Hundred Fifty Six,
as amended by Republic Act Six Thousand Six Hundred Sixty Six and Presidential
Decree Seven Hundred Forty One is hereby replaced to read as follow:

"SEC. 3. AUTHIRIZED CAPITAL STOCK OF THE PHILIPPINE NATIONAL
RAILWAYS. THE AUTHORIZED CAPITAL STOCK OF THE PHILIPPINE
NATIONAL RAILWAYS SHALL BE FIFTY BILLION PESOS DIVIDED INTO
THREE MILLION ONE HUNDRED THIRTEEN THOUSAND COMMON
SHARES ALL WITH PAR VALUE OF TWO HUNDRED PESOS EACH, WHICH
SHALL INCLUDE THE PRESENT AUTHORIZED CAPITALIZATION OF THE
PHILIPPINE NATIONAL RAILWAYS: PROVIDED, THAT THE INCREASE IN
THE AUTHORIZED CAPITAL SHALL BE FULLY SUBSCRIBED BY THE
GOVERNMENT: PROVIDED FURTHER, THAT ALL EXISTING LONG TERM
OBLIGATIONS OF THE PHILIPPINE NATIONAL RAILWAYS TO THE
GOVERNMENT OF THE PHILIPPINES INCLUDING ITS AGENCIES OR
INSTRUMENTALITIES AS WELL AS ITS TAX OBLIGATION TO ANY LOCAL
GOVERNMENT UNIT SHALL BE CONVERTED INTO CAPITAL STOCKS OF
THE PHILIPPINE NATIONAL RAILWAYS AND MADE PART OF THE
SUBSCRIPTION: PROVIDED, STILL FURTHER, THAT THE INCREASE IN
AUTHORIZED CAPITAL STOCK HEREIN PROVIDED IS DISTINCT AND
SHALL NOT PREJUDICE THE ANNUAL APPROPRIATION PROVIDED IN THE
YEARLY GAA. THE AMOUNT RAISE BY VIRTUE OF THE INCREASE IN THE
AUTHORIZED CAPITAL STOCK, IN ADDITION TO THE EXISTING SINKING
FUND OF THE PNR ESTABLISHED FROM ITS EXISTENCE, SHALL BE USED


FOR THE CONSTRUCTION OF NEW RAILROAD LINE AND WHENEVER
ECONOMICALLY AND TECHNICALLY FEASIBLE, THE REHABILITATION
AND/OR MODERNALIZATION OF MOST OF THE ENTIRE RAILWAY
SYSTEM OF PNR THROUGHOUT THE COUNTRY.

SECTION 2. A new subsection, Section 2-£, shall be inserted to read as
follows:

"SEC. 2-E. THE PHILIPPINE NATIONAL RAILWAYS SHALL BE ALLOWED
TO ENTER INTO A JOINT VENTURE WITH A QUALIFIED PRIVATE SECTOR
PARTNER, PARTICULARLY AND EXCLUSIVELY FOR THE PURPOSE OF
OPERATIONS AND MAINTENANCE SUBJECT TO THE APPROVAL OF THE
BOARD, WITH AT LEAST TWO-THIRDS (2/3) VOTE, IN A MEETING
CALLED FOR THE PURPOSE. PROVIDED, THAT SUCH PLANS
AND/PROGRAMS OF ENTERING TO A JOINT VENTURE WERE
CONSISTENT WITH THE OVERALL OBJECTIVES OF THE CORPORATION
AS ROCOMMENDED BY THE GENERAL MANAGER, PROVIDED FINALLY,
THAT THE PROCUREMENT PROCEDURE SHALL COMPLY WITH THE
EXISTING GOVERNMENT PROCUREMENT LAW. IN ANY EVENT THAT THE
INCREASE IN FARE RESULTED BY REASON OF THE PRIVATIZATION OF
PNR'S OPERATIONS AND MAINTENANCE, THE INCREMENTAL INCREASE
IN VALUE BETWEEN THE REAL FARE AND NOMINAL FARE SHALL BE
SUBSIDIZED AND PAID FOR BY THE PHILIPPINE GOVERNMENT AND
SHALL BE COVERED BY YEARLY AUTOMATIC APPROPRIATIONS
PROVIDED IN THE GENERAL APPROPRIATIONS ACT."

SECTION 3. A new subsection, Section 2-F, shall be inserted to read as
follows:

"SEC. 2-F. TO DEPUTIZE AND/OR OBLIGATE LGU'S TO ENFORCE AND
IMPLEMENT, IN COLLABORATION WITH THE GOVERNMENT CORPORATE
COUNCIL (GCC), THE RESTORATION OF PNR'S RIGHT-OF-WAY SO AS TO.
RETURN THE LAND AROUND THE STATIONS AND RESTORATION OF
PNR'S RIGHTS TO USE. IN PROCESS, REWARDING THE LGU'S FOR THEIR
EFFORT AND PENALIZING LGU'S FOR THEIR REFUSAL OR INABILITY TO
IMPLEMENT THE RESTORATION OF PNR'S RIGHTFUL USE AND
POSSESSION OF LAND ON THE RIGHT-OF-WAY AND AROUND
STATTIONS SHALL BE THE BASIC POLICY FOR ENFORCEMENT.

SECTION 4. A new subsection, Section 2-G, shall be inserted to read as
follows:

"SEC. 2-G. TO PENALIZE CRIMINALLY AND/OR CIVILLY ANY PERSON(S)’
INTERFERENCE WITH THE FREE FLOW, UNHAMPERED USE, AND
PASSAGE OF PNR TRAINS ALONG THEIR LEGAL RIGHT OF WAY (TRACKS,
BRIDGES, TURNOUTS, INTERCONNECTIONS, AND ALL ASSOCIATED
LINKAGES). SUCH AS DISREGARDING SIGNALS AND TRAIN CROSSINGS
DANGEROUSLY ON THE PATH OF ONCOMING TRAINS, PLACING DEAD


BODIES ALONG OR ON TOP OF THE TRACKS AND ITS LINKAGES,
WHETHER AS A CONSEQUENCE OF A CRIME OR NOT, SLEEPING,
PLAYING ON, IDLING ON RAILROAD TRACKS AND ITS LINKAGES,
PLACING BOULDERS OR OBJECTS THAT OBSTRUCT, THROWING
OBJECTS AT PASSING TAINS, AND SIMILAR ACTS OF DESTRUCTION AND
OBSTRUCTION. COMMITING OR ATTEMPTING TO COMMIT SUISIDE
ALONG THE RAILROAD TRACKS AND ITS LINKAGES, BUILDING
STRUCTURES-PERMANENT OR OTHERWISE ALONG THE PNR LEGAL
RIGHT-OF-WAY AND/OR REFUSING TO VACATE THE SAME UPON
DEMAND.

IF SUCH ACT(S) CAUSES OR HAS POTENTIAL TO CAUSE, OR
RESULT IN DEATH OR INJURY TO PERSONS AND/OR DAMAGE TO
PROPERTY/IES SUCH PARTY/IES WHO, WITH INTENT TO CAUSE, OR
ACTUALLY CAUSED SUCH INTERFERENCE, OBSTRUCTION, WHETHER OR
NOT RESULTING IN INJURY OR DEATH, DAMAGE TO PNR TRAINS,
TRACKS, LINKAGES, AND/OR PNR PROPERTY, SHALL BE HELD
CRIMINALLY AND CIVILLY LIABLE BY PNR. DEVOID OF ANY EVIDENCE
TO THE CONTRARY, PNR IS PRESUMPTIVELY ABSOLVED FROM
CRIMINAL AND CIVIL LIABILITY."

SECTION 5. Section 3-A of Republic Act Four Thousand One Hundred Fifty
Six, as amended is hereby amended to read as follows:

Sec. 3-A. Foreign Loans. The Philippine National Railways
[Corporation] is hereby authorized to contract loans, credits and
indebtedness IN DOMESTIC CURRENCY OR in any convertible foreign
currency, or capital goods from foreign governments, their agencies
instrumentalities of financial institutions or any governmental national or
international financial institutions or firms extending supplier's credit,
deferred payment arrangements or other funds sources, or to issue
bonds, [the total outstanding amounts of which, exclusive of interests,
shall not exceed two hundred million United States dollars or the
equivalent thereof and other currencies,] on such terms and conditions as
it deem appropriate for the accomplishment of its purposes and to enter
into and execute agreements 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 name and no behalf of
the Republic of the Philippines, the payment of the loans, credits,
indebtedness and bonds 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 subsection and
the payment of the principal, interest and other charges thereon, as well
as the importation of machinery, equipment, materials, supplies, 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. Section 9 of Republic Act Numbered Four Thousand One
Hundred and Fifty-six as amended by Republic Act Numbered Sixty-Three Hundred
and Sixty-Six and PD 741 is hereby amended to read as follows:

"Sec. 9. Managing Head. The Management of the Corporation shall be
vested in the General Manager who shall be appointed by the President of
the Philippines. He shall posses technical competence in management
preferably in railroad transport management, have demonstrated
executive ability, and be of good moral character. He shall hold office for
term of SIX (6) [eight (8)] years.

In the performance of his functions, he shall be assisted by Assistant
General Managers who shall be appointed by him with the approval of the
Board of Directors and the President.

SECION 7. Section 12 of Republic Act Four Thousand One Hundred Fifty Six,
as amended is hereby amended to read as follows:

Sec. 12. Exemption from taxes, duties, [and] port charges or duties AND
customs bonds [and port charges]. The PHILIPPINE NATIONAL RAILWAYS.
[Corporation] is hereby exempt from payment of all taxes of any kind
[every name] and nature. INCLUDING THOSE IMPOSED BY municipal,
city, provincial or national upon its capital stock, franchise, right of way,
earnings, and all property owned or operated by it and all import duties
on all railway materials, rolling stocks, spare parts, supplies and
equipment imported in the Philippines for and/or by the said corporation,
and this exemption shall extend to wharfage 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 and rehabilitation
of its lines, facilities and to proportion 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 filing of general importer's and
general documentary bonds and warehouse bonds for the operation of its
warehouses, whether general bonded warehouses or genera order store.


NOTWITHSTANDING THE PROVISIONS OF ANY OTHER LAWS TO THE
CONTRARY, THE EXEMPTION FROM TAXES, DUTIES AND PORT CHARGES
OR DUES, CUSTOMS BONDS PORT CHARGES ENJOYED BY THE
PHILIPPINE NATIONAL RAILWAYS AS PROVIDED FOR IN SECTION 12 OF
REPUBLIC ACT FOUR THOUSAND ONE HUNDRED FIFTY SIX AS AMENDED
BY RA 6366 AND 741 IS HEREBY REAFFIRMED

SECTION 8. Separability Clause. — If any portion or provision of this Act is
declared unconstitutional or invalid, the other provisions hereof not affected thereby
shall remain valid and effective.

SECTION 9. Repealing Clause. — All laws, executive orders, presidential
decrees, presidential proclamations, rules and regulations or parts thereof
inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

SECTION 10. Effectivity. — This Act shall take effect fifteen (15) days after
its publication in the Official Gazette and in a newspaper of general circulation.

Approved,