Northrail is being decommissioned by the president because of allegations to overpricing

 

Manila, Philippines — The Presidential Office of Malacaang has issued a definitive decision dissolving the North Luzon Railways Corp. (Northrail), a state-run organization tasked with overseeing a railway venture initially intended to be funded by China. This audacious approach comes amid claims of price gouging and questions about the corporation's effectiveness.

Photo: RTVMalacanang YoutTube Channel

This situation is described in detail in Memorandum Order No. 17, issued by the President's Office on October 19. The Governance Commission for Government-Owned or Controlled Corporations (GCG) played a key part in this decision, claiming that Northrail had failed to meet its objectives and was no longer delivering the promised results. Furthermore, the GCG stated that Northrail was inefficient and did not produce the anticipated social, physical, and economic results in comparison to the resources invested.

The memorandum, signed by Executive Secretary Lucas Bersamin on behalf of President Marcos, states unequivocally, "The Northrail is hereby abolished." The responsibility for administering and liquidating Northrail has been entrusted to the board of directors of the Bases Conversion and Development Authority (BCDA).

The BCDA is responsible for a number of key tasks, including settling Northrail's liabilities, giving separation incentive pay to impacted officials and people, disposing of Northrail's assets, and assisting in the orderly end of its corporate affairs. Furthermore, in accordance with existing legal provisions, an inventory of existing programs and initiatives will be done, with a focus on either termination or transfer to relevant government bodies.

In addition to these responsibilities, the BCDA board is tasked with assessing Northrail's assets and liabilities, developing a thorough action plan for their disposition and settlement, and developing a change management strategy for parties affected by this decision. Resolving pending Northrail issues, including any contingent responsibilities related to legal battles, is also part of the BCDA's accountability.

Moreover, the memorandum requires the BCDA to give the Commission on Audit original copies of Northrail's corporate financial records and books of account. This criteria emphasizes the commitment to transparency and accountability in the dissolution process.

Malacañang has asked various government agencies to provide their cooperation to the BCDA as they begin the process of decommissioning Northrail. The BCDA, as administrator and liquidator, will be obligated to submit quarterly progress reports to the GCG.

Northrail's supervising agency, the Department of Transportation, will maintain oversight of the programs and activities linked to the liquidation and closing up of Northrail's business.

On top of this, the Securities and Exchange Commission has been asked to assist the BCDA in ensuring that the corporation's dissolution complies with all applicable laws.

The Office of Government Corporate Counsel will provide critical legal assistance to the BCDA during the dissolution and winding-up process.

The memorandum further states that impacted Northrail executives and personnel are eligible for separation benefits, the costs of which will be deducted from Northrail's available corporate funds, according to existing guidelines.