Question & AnswerQ&A (Act No. 1497)
The Philippine Railway Company is granted authority to locate, construct, furnish, maintain, and operate railways on the Islands of Panay, Negros, and Cebu, under the terms of the concessionary contract.
The railway concession covers the Islands of Panay, Negros, and Cebu in the Philippine Archipelago.
The Governor-General of the Philippine Islands has the power to fix and determine the final routes and approve any branch lines to be constructed by the grantee.
The grant includes a right of way of one hundred feet in width where the railway may pass through public domain lands.
With the written approval of the Governor-General, the grantee may open and work quarries and gravel pits and take earth, stone, timber, and other materials from public lands available for homestead or sale under the Public Land Act.
The grantee and its contractors must give preference to local labor along the railway lines and employment is at all times under the reasonable direction of the Governor-General.
The government guarantees the due and punctual payment of interest at 4% per annum on first-lien bonds issued by the grantee in an amount up to 95% of the actual cost of construction and equipment, for a period of thirty years.
The grantee has the right to construct and operate such lines over the railway right of way for railway operations and with consent, for public and commercial purposes, subject to regulation and rights reserved to the government.
For the first thirty years, the grantee pays annually one-half of one percent of gross earnings; for the subsequent fifty years, one and one-half percent; and thereafter the amount is fixed by the government.
If the grantee breaches its obligations relating to construction and allows it to continue for more than four months after notice, the government may perform necessary acts at the grantee’s expense, which become a debt secured by a lien.
No stock or bonds shall be issued except in exchange for actual cash or property at fair valuation; the grantee shall not declare stock or bond dividends.
All railway tracks shall be of the gauge of three feet six inches, subject to modification with Governor-General approval.
The railways must be operated as commercial railways and common carriers for freight, passengers, express, and mail, giving preference to government business when demanded by the Governor-General.
The railway lines are declared post routes and military roads, subject to government use for postal, military, naval, and other purposes under reasonable regulation of charges.