Creating a Light Rail Transit Authority, Vesting the Same With Authority to Construct and Operate the Light Rail Transit (LRT) Project and Providing Funds Therefor

Case Overview and Summary

Summary of Executive Order No. 603

Declaration of Policy and Creation of the Light Rail Transit Authority (Sec. 1-3)
- Declares the policy to promote efficient transportation system and create the Light Rail Transit Authority (LRTA) as a corporate body.
- LRTA is primarily responsible for construction, operation, maintenance, and lease of light rail transit systems in the Philippines.
- Powers and functions vested in the Board of Directors composed of government officials and one private sector representative.

Corporate Powers (Sec. 4-5)
- LRTA has general corporate powers including:
• Continuous succession, adopt seal, sue and be sued, enter contracts, borrow funds, acquire property, carry on business, exercise eminent domain, prescribe rules and regulations, determine fares, establish branches, determine organizational structure, and exercise powers under Corporation Law. (Sec. 4)
- LRTA has specific powers including:
• Provide policy guidance, formulate plans for LRT system, borrow money, issue bonds, invest funds, cooperate with other agencies, provide expertise, issue orders, appoint personnel, recommend establishment of LRT systems in other areas, report annually to the President, and perform necessary acts. (Sec. 5)

Borrowing Authority (Sec. 6-7)
- LRTA can incur domestic indebtedness by contracting loans or issuing bonds, subject to approval and terms set by the Board and the President. (Sec. 6)
- LRTA can contract foreign loans up to P300 million or equivalent, subject to terms set by the Board and guaranteed by the Philippine government. (Sec. 7)

Tax and Duty Exemptions (Sec. 8)
- Importation of equipment, machinery, spare parts, and materials used directly in LRT operations are exempted from taxes, duties, fees, and other charges. (Sec. 8)

Organization and Management (Sec. 9-14)
- Management headed by an Administrator and two Deputy Administrators appointed by the President. (Sec. 9)
- Powers and duties of the Administrator defined. (Sec. 10)
- Competitive public bidding required for purchases and contracts, except for emergencies and small amounts. (Sec. 11)
- LRTA can establish necessary departments, with a separate legal counsel office. (Sec. 12)
- Auditor appointed by the Commission on Audit to audit LRTA. (Sec. 13)
- Certain officials can administer oaths for official business. (Sec. 14)

Capitalization and Financing (Sec. 15-16)
- Authorized capital of P500 million, fully subscribed by the Philippine government and other government entities. (Sec. 15)
- LRTA indebted to the government for expenditures advanced for LRT system planning and construction. (Sec. 16)

Penalties (Sec. 17)
- Penalties for willfully giving false or misleading information in LRTA proceedings, according to existing penal laws. (Sec. 17)