Malacañang announced on Saturday that President Ferdinand Marcos Jr. has ordered the abolition of the North Luzon Railways Corp. (Northrail) as it is no longer cost-efficient and producing the desired outcomes.
Memorandum Order 17 was signed by Executive Secretary Lucas Bersamin on 19 October.
In 2015, the National Economic and Development Authority Board approved the North-South Commuter Railway Project, which was financed through official development assistance from Japan, effectively rendering the Chuina-funded Northrail project terminated.
The rail contract was suspended in March 2010 and the contract dropped in 2012 after the Chinese contractor Sinomach called off the loan for the project.
The Governance Commission for GOCCs determined that Northrail has met the standards for abolition for failing to achieve its objectives and purposes for which it was designed and created; not being cost-efficient; and missing the level of social, physical and economic returns.
In ordering its abolition, Marcos tasked the Bases Conversion and Development Authority board to act as the administrator and liquidator of Northrail.
BCDA to shoulder liabilities
The BCDA should settle the Northrail liabilities, including the payment of separation incentive pay to affective officials and personnel as well as undertake the necessary steps in liquidating Northrail’s assets and assist in the winding up of its corporate affairs.
The BCDA directors shall also conduct an inventory of all of Northrail’s existing programs and projects and either terminate or transfer them to concerned government agencies.
The inventory also includes the list of Northrail’s assets and liabilities and how to dispose of or settle them.
The BCDA is also tasked to formulate a Change Management Plan for affected stakeholders of Northrail.
It shall likewise conduct an inventory of all pending cases brought by and against Northrail and formulate the appropriate actions to resolve the cases.
The original copies of Northrail’s corporate books and account and financial records will be surrendered to the Commission on Audit by the BCDA board of directors.
The Palace said the Office of the Government Corporate Counsel, or GCG, shall provide the necessary legal assistance to the BCDA in this endeavor.
The GCG shall monitor the implementation of the abolition of the Northrail.
The Department of Transportation, as the supervising agency of the Northrail, shall continue to oversee the programs and activities relative to liquidation and winding-up of the affairs by the Northrail.