Law Summary

Introduction

Presidential Decree No. 1005, issued on September 22, 1976, formally repeals Republic Act No. 3741, which authorized the construction of self-liquidating public improvements by private individuals under the Private Financing Law.

Repeal of Republic Act No. 3741

• Legal Principle: The decree nullifies the provisions of Republic Act No. 3741, which allowed private financing for public works projects.
• Key Definitions:
  • Self-liquidating projects: Projects that were intended to generate enough revenue to cover their costs.
• Important Details:
  • The repeal is effective immediately.
  • Existing toll collection practices for public works projects may continue under existing laws.

Continuation of Private Sector Participation

• Legal Principle: Despite the repeal, participation of the private sector in public works is still permitted.
• Key Requirements:
  • The private sector can continue to engage in the construction, operation, and maintenance of public works projects in accordance with existing laws.
• Important Details:
  • The existing contracts between the government and private contractors will still hold until they are liquidated.

Implementation and Liquidation Procedures

• Legal Principle: The decree authorizes specific government officials to create rules for the orderly liquidation of contracts made under the repealed law.
• Key Definitions:
  • Liquidation: The process of settling obligations and returning project control to the government.
• Important Procedures:
  • The Secretary of Finance, Secretary of Public Works, Transportation and Communications, and Secretary of Public Highways are tasked with promulgating the rules.
  • Reasonable compensation must be determined for contractors based on tolls and fees.
• Relevant Timeframes:
  • Contractors are allowed to collect tolls or fees during the liquidation period.

Toll Collection and Contractor Rights

• Legal Principle: Contractors retain rights to collect tolls during the transition.
• Key Requirements:
  • Contractors must continue to collect reasonable tolls or fees for the use of public works until the liquidation process is complete.
• Important Details:
  • Compensation includes the return of capital plus interest.

Conclusion

Presidential Decree No. 1005 effectively repeals the Private Financing Law while ensuring an orderly transition concerning existing contracts and toll collections.

Key Takeaways

• The repeal of Republic Act No. 3741 is immediate and affects all associated private financing projects.
• The private sector can still participate in public infrastructure projects under existing laws.
• The decree mandates the creation of rules for the liquidation of existing government contracts.
• Contractors are entitled to collect tolls during the liquidation period, ensuring their financial interests are protected.