Establishment and Regulation of Toll Facilities

It is known as the “Toll Operation Decree.” It authorizes the establishment of toll facilities on public improvements and provides for the regulation of toll operations.

The Toll Regulatory Board is composed of: (1) the Minister of Transportation and Communications (Chairman); (2) the Deputy Director-General for Program and Projects of NEDA; (3) the Deputy Minister of Public Highways; (4) the Deputy Minister of Finance; and (5) a private-sector representative (preferably a lawyer or economist with adequate experience in public utilities regulation) appointed by the President.

Subject to approval of the President, the Board may enter into contracts for the construction, operation, and maintenance of toll facilities on behalf of the Republic.

The Board may determine the kind/type/nature of public improvement that will be constructed and/or operated as toll facilities, including national highways, roads, bridges, and public thoroughfares.

The Board may condemn private property for public use, subject to the provisions of existing law.

The Board issues/approves rates. It may issue or modify rates and, upon notice and hearing, approve or disapprove petitions for toll rate increases.

Decisions on petitions for increased toll rates may be appealed to the Office of the President within ten (10) days from promulgation. The appeal does not suspend imposition of the new rates.

The petitioner must deposit in a trust fund amounts necessary to reimburse toll payers affected in case of reversal of the decision.

It is the necessary authorization to operate a toll facility, granted by the Board subject to conditions imposed by the Board.

Examples: (1) Operator must desist from collecting toll upon expiration of the certificate; (2) entire facility (including related operation and maintenance equipment) must be turned over to the government upon expiration; (3) operator cannot lease/transfer/grant usufruct/sell/assign rights without prior Presidential approval; (4) in war/rebellion/public peril/emergency/calamity/disaster/disturbance of peace and order, President may close facility or order government takeover with just compensation; (5) no government guarantees/certificates of indebtedness/collateral/securities/bonds for the operator’s financing under the certificate.

The President may cause total or partial closing of the toll facility or order government takeover without prejudice to payment of just compensation.

The operator cannot lease, transfer, grant usufruct, sell, or assign rights/privileges under the certificate, nor merge with another entity for the same purpose, without prior Presidential approval. A valid transfer subjects the transferee to all conditions as if granted to the original grantee.

The toll operation certificate may be amended, modified, or revoked whenever the public interest so requires.

No new rates shall be collected unless published in a newspaper of general publication at least once a week for three consecutive weeks.

Yes. Government vehicles on official business are exempted under procedures and circumstances promulgated by the Board.

It sets aside P300,000.00 each year for the first three years from fees or other obligations due from toll operators of existing toll facilities to defray operational expenses of the Board.

All laws, decrees, and orders inconsistent with PD 1112 are repealed and/or modified accordingly.

It takes effect immediately.