the Government's developmental goals have been assisted by the
construction, maintenance and operation of infrastructure toll
facilities as envisioned by Presidential Decree No. 1112 and 1113;
WHEREAS, the Philippine National Construction Corporation (formerly the
Construction and Development Corporation of the Philippines) is
presently substantially owned by various Government financial
institutions and has played a major role in the success of its endeavor
through its efficient construction, maintenance and operation of the
toll facilities in the North Luzon and South Luzon expressways as
mandated by Presidential Decree Nos. 112 and 113 and its Toll Operation
Agreement with the Toll Regulatory Board;
WHEREAS, for the continued efficiency and viability of the toll
facilities in the North Luzon and South Luzon Expressways, it is
essential that the Philippine National Construction Corporation be
granted such powers and authority necessary to enable it to promote the
convenience of the monitoring public in the expressways;
WHEREAS, there is an urgent need to link the North Luzon and North
Luzon Expressways through the construction, maintenance and operation
of the Metro Manila Expressway which will serve as an additional route
and thereby decongest traffic and facilitate the department of trade
and commerce in and around Metro Manila.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, hereby order
Section 1. Any provision of law to the contrary
notwithstanding, there is hereby granted to the Philippine National
Construction Corporation, a corporation duly organized and existing
under by the virtue of Philippine laws (hereinafter called the
"GRANTEE"), the right, privilege and authority to construct, maintain
and operate the following expressways (hereinafter collectively called
"the Expressways"), together with the toll facilities appurtenant
(a) the North Luzon Expressway from Balintawak
(Station 9 + 563) to Carmen, Rosales, Pangasinan;
(b) the South Luzon Expressway from Nichols, Pasay
City (Station 10 + 540) to Lucena, Quezon;
(c) the Metro Manila Expressway, from Bicutan,
Parañaque, Metro Manila (Station 18 +720) to Meycauayan, Bulacan
(approximate Station 63 + 290) with an approximate length of 44.570
km., to serve as an artery in the transportation of trade and commerce
in the Metropolitan Manila area.
The GRANTEE is hereby further granted the right, privilege and
authority to construct, maintain and operate any and all such
extensions, linkages or stretches, together with the toll facilities
appurtenant thereto, from any part of the North Luzon Expressway, South
Luzon Expressway and/or Metro Manila Expressway and/or to divert the
original route and change the original end-points of the North Luzon
Expressway and/or South Luzon Expressway as may be approved by the Toll
Regulatory Board (any and all such extensions, linkages, stretches and
diversions hereinafter deemed included in the term "Expressways").
Sec. 2. The term of the franchise provided under
Presidential Decree No. 1113 for the North Luzon Expressway and the
South Luzon Expressway which is thirty (30) years from 1 May 1977 shall
remain the same; provided that, the franchise granted for the Metro
Manila Expressway and all extensions linkages, stretches and diversions
that may be constructed after the date of approval of this decree shall
likewise have a term of thirty (30) years commencing from the date of
completion of the project.
Sec. 3. Subject to the limitations and procedure
prescribed by law, the GRANTEE is empowered and authorized to exercise
the right of eminent domain insofar as may be reasonably necessary for,
in furtherance of, the right, privilege and authority granted under its
franchise; provided, however, that it shall continue to be the
litigation of the Toll Regulatory Board to acquire the necessary land
and/or rights of way pursuant to its power under Presidential Decree
No. 1112 and cede the same to the GRANTEE at no cost.
Sec. 4. The Toll Regulatory Board is hereby given
jurisdiction and supervision over the GRANTEE with respect to the
Expressways, the toll facilities necessarily appurtenant thereto and,
subject to the provisions of Sec. 8 and 9 hereof, the toll that the
GRANTEE will charge the users thereof.
Sec. 5. In consideration of this franchise, the
(a) Construct, operate and maintain at its own
expense the Expressways; and
(b) Turn over, without cost, the toll facilities and
all equipment, directly related thereto to the Government upon
expiration of the franchise period.
Sec. 6. This franchise is granted subject to such
conditions, consistent with the provisions of this Decree, as may be
imposed by the Toll Regulatory Board in the Toll Operation Agreement
and such other modification or amendments that may be made thereto, and
with the understanding and upon the condition that it shall be subject
to amendment of alteration when public interest so dictates.
Sec. 7. In cases of force majeure rendering
Expressways totally or partially inoperable, the annual concession fee
due the government shall be proportionately reduced or the authorized
toll rate increased to the extent determined by the Toll Regulatory
Board in order to allow the GRANTEE to recover such losses in revenue
incurred due to such calamities.
In cases of force majeure attributable to acts of Government or man,
such as but not limited to, war, rebellion, insurrection, government
shall have the right to cause the closing of the Expressways subject to
the payment of just compensation to the GRANTEE.
Sec. 8. (a) For the North Luzon Expressway and
South Luzon Expressway, the GRANTEE shall collect toll at such rates as
are currently in effect, subject to the provisions of Sec. 9.
(b) For the Metro Manila Expressway and such
extensions, linkages, stretches and diversions of the Expressways which
may henceforth be constructed, maintained and operated by the GRANTEE,
the GRANTEE shall collect toll at such rates as shall initially be
approved by the Toll Regulatory Board. The Toll Regulatory Board shall
have the authority to approve such initial toll rates without the
necessity of any notice and hearing, except as provided in the
immediately succeeding paragraph of this Section. For such purpose, the
GRANTEE shall submit for the approval of the Toll Regulatory Board the
toll proposed to be charged the users. After approval of the toll
rate(s) by the Toll Regulatory Board and publication thereof by the
GRANTEE once in a newspaper of general circulation, the toll shall
immediately be enforceable and collectible upon opening of the
expressway to traffic use.
Any interested Expressways users shall have the right to file, within a
period of ninety (90) days after the date of publication of the initial
toll rate, a petition with the Toll Regulatory Board for a review of
the initial toll rate; provided, however, that the filing of such
petition and the pendency of the resolution thereof shall not suspend
the enforceability and collection of the toll in question. The Toll
Regulatory Board, at a public hearing called for the purpose after due
notice, shall then conduct a review of the initial toll shall be
appealable to the Office of the President within ten (10) days from the
promulgation thereof. The GRANTEE may be required to post a bond in
such amount and from such surety or sureties and under such terms and
conditions as the Toll Regulatory Board shall fix in case of any
petition for review of, or appeal from, decisions of the Toll
In case it is finally determined, after a review by the Toll Regulatory
Board or appeal therefrom, that the GRANTEE is not entitled, in whole
or in part, to the initial toll, the GRANTEE shall deposit in the
escrow account the amount collected under the approved initial toll fee
and such amount shall be refunded to Expressways users who had paid
said toll in accordance with the procedure as may be prescribed or
promulgated by the Toll Regulatory Board.
Sec. 9. The GRANTEE shall have the right and
authority to adjust any existing toll being charged the users of the
Expressways under the following guidelines:
a) Adjustments may be made not more than once a year.
b) Adjustments shall be made solely on the basis of
the following formula, which is subject to amendment, modification or
repeal as may from time to time be agreed upon between the GRANTEE and
the Toll Regulatory Board:
R = K x Ro I I
Where K = .60 (a___ L + a'___ F E) C = .30 L +
Eo Co Lo
R = Adjusted Toll Rate
Ro = Current Toll Rate
L = Prevailing Manila Reference Rate Plus Bankers' Association of
the Philippines (BAP) Intermediation Index plus the going spread as
quoted by the major Commercial banks, or any other index rate which may
be more reflective of the prevailing conditions in the local financial
Lo = Prevailing local interest rate (averaged as above) when
current toll rate is approved.
F = Prevailing foreign interest rate at time of adjustment
which shall be the rate is approved.
Fo = Prevailing foreign interest rate (averaged as above) when
current toll rate approved.
a = Ratio of local debt to total debt.
a' = Ratio of foreign debt to total debt.
E = CB foreign exchange ($ to P) rate (selling rate at time
Eo = CB foreign exchange ($ to P) rate (selling rate when current
toll rate is approved).
L = Consumer price index for Metro Manila at time of
Lo = Consumer price index for Metro Manila when current toll rate
C = Construction Materials Price Index at the time of
adjustment computed as the sum of the unit prices of cement, asphalt
concrete, reinforcing bars and diesel as authorized by government price
control authority and if not controlled, as quoted in the open market.
Co = Construction Material Price Index when last toll rate was
approved computed as the sum of the unit prices of cement, asphalt
concrete, reinforcing bars and diesel as authorized by government price
control authority and if not controlled, as quoted in the open market.
The procedure to be followed for any adjustment is as
(a) On or before the 30th day of September of each
year, the GRANTEE shall submit to the Toll Regulatory Board a written
report/statement on the then current application of the formula.
(b) Any adjustment in the then current toll rate(s)
resulting from the application of the formula and indicated in the
aforesaid written statement shall (i) be published once by the GRANTEE
in a newspaper of general circulation not later than November 30 of
each year and (ii) be enforceable and collected by the GRANTEE
effective on the first day of January of the immediately succeeding
(c) Any interested Expressway user shall have the
right to file, within a period of ninety (90) days after the date of
publication of the adjusted toll rate(s), a petition with the Toll
Regulatory Board for a review of the adjusted toll rate (s); provided,
however, that, notwithstanding the filing of such petition and the
pendency of the resolution thereof, the adjusted toll shall be
enforceable and collectible by the GRANTEE effective on the first day
of January in accordance with the immediately preceding paragraph.
d) The Toll Regulatory Board, at a public hearing
called for the purpose after due notice, shall then conduct a review of
the adjusted toll to determine the propriety thereof based on the
authorized formula provided in Sec. 9 (b) hereof. The Toll
Regulatory Board shall render and promulgate its decision not later
than 120 days from date of receipt of the petition.
e) Decisions of the Toll Regulatory Board on
petitions for review of adjusted toll shall be appealable to the Office
of the President within ten (10) days from the promulgation thereof.
f) The GRANTEE may be required to post a bond in such
amount from such surety or sureties and under such terms and conditions
as the Toll Regulatory Board shall fix in case of any petition for
review of, or appeal from, decisions of the Toll Regulatory Board.
g) In case it is finally determined, after a review
by the Toll Regulatory Board or appeal therefrom, that the GRANTEE is
not entitled, in whole or in part, to the adjustment, the GRANTEE shall
deposit in an escrow account the excess amount collected under the
adjustment and such amount shall be refunded to Expressway users who
not paid the toll adjustment in accordance with the procedure as may be
prescribed or promulgated by the Toll Regulatory Board.
Section 10. For the purpose of carrying out the right
and privilege granted herein, the GRANTEE may undertake the
construction of improvement projects on public infrastructure abutting
or crossing the expressways as may be necessary to ensure the smooth
flow of traffic in the Expressways including the construction of
additional or expanded toll pass bridges in the interchanges as may be
identified by the GRANTEE and approved by the Toll Regulatory Board.
The GRANTEE shall advance the costs of said construction and deduct the
same from the concession fee due to the Government.
Section 11. For the smooth merger of traffic in the
Expressway with local traffic and thus ensure traffic mobility and
congestion in areas around the vicinity of the interchanges, the
GRANTEE shall have jurisdiction, supervision and traffic control over
all immediate areas of influence of the interchanges, including the
service roads along the Expressways as may be identified by the GRANTEE
and approved by the Toll Regulatory Board. The appropriate personnel of
the GRANTEE shall be deputized as traffic officers for this purpose.
Section 12. The GRANTEE shall hold harmless the
municipal, provincial and national Government of the Philippines, from
all claims, demands or actions arising out of accidents or injuries,
whether to property or to persons, occasioned by the exercise of the
GRANTEE'S right and privilege under this franchise.
Section 13. The GRANTEE shall not lease, transfer,
grant the usufruct of, sell or assign this franchise nor the rights or
privileges required hereby, to any person, firm, company, corporation
or other legal entity, nor merge with any other company or corporation
without the prior approval of the President of the Philippines.
In the event that this franchise is sold, transferred or assigned, the
transferee shall be subject to all the conditions, terms, restrictions
and limitations of this Decree as fully and completely and to the same
extent as if the franchise has been granted to the said person, firm,
company, corporation or other legal entity.
Section 14. The provisions of existing laws to the
contrary notwithstanding, no tax, charges or fees of any kind, nature
or descriptions now or in the future imposed or levied by any
municipal, city, provincial or national authority shall be imposed,
levied or assessed on or be collected from the GRANTEE in connection
with its exercise of the right and privilege under this franchise
and/or in connection with its activities pursued in accordance with and
pursuant to this Decree, other than taxes on its income and real
property in conformity with existing laws.
Section 15. The ongoing construction, maintenance and
operation by the GRANTEE of the existing North Luzon Expressway and
South Luzon Expressway shall be deemed to constitute acceptance by the
GRANTEE of this franchise and all the terms hereof;
Section 16. If any of the provisions of this Decree
is, or becomes, invalid or illegal, such invalidity or illegality shall
not invalidate the entire Decree but it shall be construed as if not
pertaining the particular provision or provisions held invalid or
illegal and the rights and obligations of the Government and the
GRANTEE shall be construed and enforced accordingly.
Section 17. All laws, decrees, orders, rules and
regulations as well as agreements, inconsistent with the provisions of
this Decree, are hereby repealed or modified accordingly. Provisions of
Presidential Decree Nos. 1112 and 1113 and in the Toll Operation
agreement not inconsistent with this Decree shall remain in full force
Section 18. This Decree shall take effect
DONE in the City of Manila,
this 22nd day of December, in the year of Our Lord, nineteen hundred