Congressional franchise sought for airline, railway operators

MANILA, Philippines - Private companies operating railway and airport facilities need to obtain franchises from Congress, Speaker Pantaleon Alvarez said yesterday.

Pantaleon said these firms are considered public utilities like power distributors and airlines, and are required by the Constitution to seek congressional franchises.

He said the Department of Transportation (DOTr), which awards contracts to these companies, should advise them to comply with the constitutional requirement.

Asked if the House would ask the Supreme Court to make a ruling should these private entities refuse to follow the requirement, Alvarez said: “No, that is their problem and of DOTr.”

“DOTr officials will be asked to account for such refusal or failure during budget deliberations and House investigations,” he said.

According to Transportation Undersecretary Raoul Creencia, the legal basis for hiring private companies to build or operate infrastructure projects like railways and airports is the build-operate-transfer (BOT) law.

Creencia said the law does not require these firms to obtain franchises from Congress.

All the law requires, he said, is for these entities to seek concession agreements from the appropriate government agencies.

Alvarez questioned the DOTr’s plan to privatize at least five international airports in the provinces.

He said the planned duration of the contracts, which ranges from 30 years to 35 years, is too long.

“The government builds these airports and we are giving them to private corporations on a silver platter. The private companies will just do some improvements,” he said.

Creencia said in the case of the controversial Terminal 3 project of the Ninoy Aquino International Airport, the proponent invested in and built the entire complex.