Case Digest (G.R. No. 114222)
Facts:
In G.R. No. 114222 decided on April 6, 1995 under the 1987 Constitution, Petitioners Senators Francisco S. Tatad, John H. Osmeña and Rodolfo G. Biazon, acting as public officials and taxpayers, sought a writ of prohibition under Rule 65 of the Revised Rules of Court to enjoin the Department of Transportation and Communications (DOTC) Secretary Jesus B. Garcia, Jr. and EDSA LRT Corporation, Ltd. (a Hongkong‐incorporated entity) from enforcing two contracts: the “Revised and Restated Agreement to Build, Lease and Transfer a Light Rail Transit System for EDSA” (April 22, 1992) and its “Supplemental Agreement” (May 6, 1993). The litigation arose from the DOTC’s 1989 plan to construct EDSA LRT III on a Build–Operate–Transfer (BOT) Law basis (Republic Act No. 6957). A Prequalification Bids and Awards Committee shortlisted only one bidder: the EDSA LRT Consortium (later substituted by EDSA LRT Corporation, Ltd.). Negotiations began in July 1991 and an initial BOT contract was executed;Case Digest (G.R. No. 114222)
Facts:
- Parties and Petition
- Petitioners – Senators Francisco S. Tatad, John H. Osmena and Rodolfo G. Biazon, suing as legislators and taxpayers.
- Respondents – Hon. Jesus B. Garcia, Jr., DOTC Secretary; EDSA LRT Corporation, Ltd., a Hong Kong corporation.
- EDSA LRT III Project Initiation
- 1989: DOTC plans 17.8-km light rail transit along EDSA to ease Metro Manila congestion.
- March 1990: Letter of intent from Eli Levin Enterprises proposing a BOT scheme; July 1990: Republic Act No. 6957 (BOT Law) enacted.
- Prequalification and Award Process
- Jan–Mar 1991: DOTC forms PBAC and Technical Committee; publishes prequalification notice (Feb 21–Apr 1, 1991).
- Five groups apply; PBAC (May 9, 1991) finds only EDSA LRT Consortium compliant (82-point passing mark).
- July–Nov 1991: DOTC negotiates and executes initial “Agreement to Build, Lease and Transfer…” (later revised).
- Renegotiation and Presidential Actions
- Mar 1992: Executive Secretary Drilon disapproves award for lack of public bidding and other defects.
- Apr 22, 1992: Parties enter into Revised and Restated Agreement; May 6, 1993: Supplemental Agreement clarifying rights.
- May 1993: President Ramos approves both Agreements.
- Principal Contract Terms
- Private respondent to finance, construct and deliver rail system with 54 vehicles, 13 stations, depot, power plant.
- DOTC to lease system for 25 years, pay monthly rentals via irrevocable letter of credit; title transfers for US $1.
- Private respondent granted exclusive 25-year development rights over station airspace and depot, with guaranteed revenues.
- Subsequent Legislation
- May 5, 1994: Republic Act No. 7718 amends RA 6957, formally recognizing the BLT scheme and allowing direct negotiation.
- RA 7718 published May 12 and effective May 28, 1994.
- Petitioners’ Allegations and Respondents’ Defenses
- Petitioners assert the agreements violate: constitutional nationality rules; BOT Law/IRR; EO 380; public bidding; and are disadvantageous.
- Respondents counter: petitioners lack standing; BLT is a form of BOT/BT; negotiated award valid; presidential approval secured; contract not detrimental.
Issues:
- Constitutional Nationality Requirement
- Does awarding ownership of a public utility’s facilities to a foreign corporation violate Section 11, Article XII of the Constitution?
- Recognition of Build-Lease-Transfer (BLT) Scheme
- Is the BLT arrangement authorized under RA 6957 or its Implementing Rules and Regulations?
- Mode of Contract Award
- Does negotiated award without public bidding violate RA 6957, its IRR and PD 1594?
- Compliance with Implementing Rules
- Did the award to EDSA LRT Corporation, Ltd. contravene IRR’s prequalification and bidding criteria?
- Presidential Approval under EO 380
- Does the absence of express presidential approval render the agreements void or ineffective?
- Advantageousness to Government
- Are the rental schedules and exclusive development rights grossly disadvantageous to the State?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)