Northrail is being closed due to allegations of overpricing

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Manila, Philippines — The Presidential Office of Malacaang has issued the final order for the dissolution of the North Luzon Railways Corp. (Northrail), a state-run organization entrusted with monitoring a railway plan initially intended to be funded by China. This bold approach comes amid claims of overpricing and questions about the corporation's efficiency.

This development is explained in Memorandum Order No. 17, issued by the President's Office on October 19. The Governance Commission for Government-Owned or Controlled Corporations (GCG) was instrumental 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 provide the expected social, physical, and economic returns for the resources committed.

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

The BCDA is tasked with several essential responsibilities, including settling Northrail's liabilities, providing separation incentive pay to affected officials and personnel, disposing of Northrail's assets, and assisting in the orderly closure of its corporate affairs. Furthermore, an inventory of existing programs and initiatives will be done, focusing on either termination or transfer to relevant government bodies per existing legal provisions.

In addition to these responsibilities, the BCDA board is tasked with evaluating 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 unanswered Northrail issues, including any contingent obligations resulting from legal battles, is also one of the BCDA's responsibilities.

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

Malacañang is requesting various government agencies to lend their help to the BCDA as they begin the process of dismantling Northrail. The BCDA, as administrator and liquidator, will be expected to provide the GCG with quarterly progress updates.

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

Also, the Securities and Exchange Commission has been hired to assist the BCDA in ensuring that the corporation's dissolution complies with all applicable laws.

During the dissolution and closing down procedure, the BCDA will receive critical legal assistance from the Office of the Government Corporate Counsel.

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