FRANCISCO, JR. & HIZON v.
TOLL
REGULATORY BOARD, ET AL.
G.R. NO. 166810 OCTOBER 19,201
Topic: REGULATION OF PUBLIC UTILITIES – AUTHORITY TO OPERATE
Janela B. Cabungcal
FACTS OF THE CASE
President Marcos issued P.D. 1112 in which it created the Toll Regulatory Board and vested it with the power to
enter into contracts for the construction, maintenance and operation tollways, grant authority to operate toll
facility, issue therefor the necessary Toll Operation Certificate ("TOC") and fix initial toll rates, and, from time to
time, adjust the same after due notice and hearing.
PD 1113 was issued which granted the Philippine National Construction Corporation (PNCC), a franchise to
operate toll facilities in the North Luzon and South Luzon Expressways, with the right to collect toll fees at such
rates as TRB may authorize.
PD 1894 was issued, granting PNCC a franchise over the MMEX, and the expanded NLEX and SLEX. PNCC was
granted the "right, privilege and authority to construct, maintain and operate any and all such extensions,
together with the toll facilities in any part of NLEX & SLEX and to divert routes as may be approved by the TRB.
FACTS OF THE CASE
Government Corporate Counsel (GCC), on PNCC‘s request, issued an Opinion, later affirmed by the Secretary of
Justice, holding that PNCC may enter into a joint venture (JV) agreement (JVA) with private entities without going
into public bidding.
In 1994, DPWH, TRB, PNCC, and other private and govt entities executed a Memorandum of Understanding
(MOU)
executed Supplemental Toll Operation Agreements (STOA) to implement the TOA
PNCC entered into JVAs with private entities.
FACTS OF THE CASE
Petitioners (as taxpayers and expressway users) seek to nullify the STOAs and the corresponding TRB resolutions
fixing initial rates and approving toll rate adjustments.
They argue that the STOAs and the toll rate-fixing resolutions violate the Constitution because they impose on the
public the burden of financing tollways by way of exorbitant fees and thus deprive the public of property without
due process.
Petitioners assail the constitutionality of some sections of PD 1112 because they vested the TRB, on one hand, toll
operation awarding power while, on the other hand, granting it also the power to issue, modify and promulgate toll
rate charges.
ISSUE(S)
Whether or not Toll Regulatory Board (TRB) is vested with the power
and authority to grant what amounts to franchise over tollway
facilities.
Whether or not Toll Regulatory Board (TRB) is
RULING vested with the power and authority to grant what
amounts to franchise over tollway facilities.
The power to authorize and control a public
utility is admittedly a prerogative that stems
from the Legislature.
Albano v. Reyes Ruling However, there is nothing in the Constitution
Constitution provides x x x that the issuance of a franchise,
remotely indicating the necessity of a
certificate or other form of authorization for the operation of
congressional franchise before "each and every
a public utility shall be subject to amendment, alteration or
public utility may operate‖
repeal by Congress does not necessarily imply x x x that a special franchise directly emanating from
only Congress has the power to grant such authorization. Congress is not necessary if the law already
Our statute books are replete with laws granting specified specifically authorizes an administrative body to
agencies in the Executive Branch the power to issue such grant a franchise or to award a contract
authorization for certain classes of public utilities.
Whether or not Toll Regulatory Board (TRB) is
RULING vested with the power and authority to grant what
amounts to franchise over tollway facilities.
TRB with power to grant a qualified person or
entity with authority to construct, maintain, and
operate a toll facility and to issue the toll
operating permit or TOC.
TRB was given the power to grant
administrative franchise for toll facility projects
Secs 3 (a) and (e) of PD 1112 in relation to Section 4 of PD
1894
Whether or not Toll Regulatory Board (TRB) is
RULING vested with the power and authority to grant what
amounts to franchise over tollway facilities.
Its charter empowered the TRB to authorize the
PNCC to operate toll facilities so it may be stated as a
corollary that the TRB, subject to certain
qualifications, can alter the conditions of such
Secs 3 of PD authorization.
"[t]his [PNCC] franchise is granted subject to such
A legislative franchise cannot be modified or
conditions as may be imposed by the [TRB] in an appropriate amended by an administrative body with general
contract to be executed for this purpose, and with the delegated powers to grant authorities or franchises.
understanding and upon the condition that it shall be subject However, in the this case, the law granting a direct
to amendment, alteration or repeal when public interest so franchise to PNCC specifically conferred upon the
requires." TRB the power to impose conditions in an
appropriate contract
END OF CASE
