SC asked to reconsider ruling on SLEX toll hike

MANILA, Philippines - The Supreme Court (SC) is being asked to reconsider its recent ruling that paved the way for sharp increases in toll fees in the South Luzon Expressway (SLEX).

Lawyer Ernesto Francisco Jr. asked the High Court to reverse its Oct. 19 decision upholding the legality of a toll increase as contained in various Supplemental Toll Operation Agreements (STOA) between the Toll Regulatory Board (TRB) and the South Luzon Tollways Corp. (SLTC).

In a 96-page motion for reconsideration, Francisco insisted that the STOA on SLEX violated the Constitution.

He again assailed Section 3 of Marcos-era Presidential Decree 1112 for unduly vesting in the TRB the exclusive power of Congress to grant franchises to public utilities. The board invoked this authority when it extended the 30-year franchise of the Philippine National Construction Corp. (PNCC) through a toll operation certificate.

He said this was “an encroachment on the legislative power of Congress and violative of Article VI Section 1 of the Philippine Constitution.”

He also argued that allowing TRB to sign the STOA for the construction, operation and maintenance of toll facilities while also having the power to adjudicate and approve or disapprove petitions for the increase in toll rates is “violative of the due process clause of the Constitution.”

“The TRB, being a party to the tollway contracts, is bound by the stipulated initial toll rates and periodic toll rate increases provided in the said contracts. Consequently, the TRB cannot be a fair and impartial tribunal to hear petitions for initial toll rates and toll rate adjustments,” he stressed.

“Under the STOA, the government will be in default if the initial toll rates or any periodic toll rate adjustment is not implemented for any reason whatsoever. Thus, any public hearing conducted before the TRB would be a ‘moro-moro (farce),’ so to speak, because the TRB, which is the agency mandated by law to conduct such public hearing, is a party and signatory to the STOA and bound by the same,” he explained.

“The tollway contracts should have undergone public bidding. However, there was no public bidding, no direct negotiation, and no unsolicited proposal before the TRB. The investors did not even undergo the process of pre-qualification before the TRB,” he said, adding, “The original investors in the tollway contracts were just handpicked.”

“The increased toll rates are simply too much and outright confiscatory. The foreign investors in the tollway contracts will make a killing so to speak, at the expense of the Filipino motorists,” he said. “The SLEX toll rates will increase by 250 percent over the current rates.”

Francisco cited a declaration by Malaysian investor MTD Capital Berhad’s president and chief executive officer Datuk Azmil Khalid that the entire project would cost P11.8 billion with the expected payback period in six years.

“This means that the Malaysian investor will be able to recoup its investment in six years and for the remaining 24 years of its STOA, not to mention a 30-year extension to which it is entitled, the Malaysian investor will just be raking in profits,” he added.

The STOA, according to Francisco, passes on to the motorists and not to investors the burden of financing the completion of the tollway projects.

In its ruling last month penned by Associate Justice Presbitero Velasco Jr., the SC upheld TRB’s authority to grant “administrative franchise” for toll facility projects.

The SC in its decision said that “any suggestion that only Congress has the authority to grant a public utility franchise is less than accurate.”

The Court reiterated its ruling in Albano vs Reyes that there was nothing in the 1987 Constitution indicating the necessity of a congressional franchise before “each and every public utility may operate.”

“In such a case, therefore, a special franchise directly emanating from Congress is not necessary if the law already specifically authorizes an administrative body to grant a franchise or to award a contract,” it said.

The SC, however, remanded to the TRB the task of determining whether the proposed 250-percent increase in SLEX fees is proper or if the toll contractor is entitled to the collections from toll fees.

This means that the toll hike will not be immediately implemented as the TRB still has to review the new rates.

The government, through the TRB, entered into the STOA deal with SLTC in February 2006.

It involves rehabilitation and expansion of SLEX by the SLTC, a joint venture among the PNCC, MTD Capital Berhad and the Manila Toll Expressway Systems Inc.

Motorists driving Class 1 vehicles or cars, vans, and other small vehicles through Alabang in Muntinlupa City to Calamba, Laguna will have to pay P77 from the current P21 once the new rate is implemented.

Class 2 vehicles or light trucks and buses will be charged P155 from P43, and Class 3 vehicles or heavy and multi-wheeler trucks, P232 from P65.