Palace orders NorthRail Corp. abolished after assessment

Malacañang has issued a memorandum directing the abolition of the North Luzon Railways Corp. (NorthRail) effective immediately.

Executive Secretary Lucas Bersamin–who signed Memorandum Order (MO) 17 on Oct. 19 by authority of President Ferdinand Marcos, Jr.–said NorthRail has been ordered abolished after an assessment by the Governance Commission for Government-Owned and-Controlled Corporations (GCG).

According to MO 17, which was made public on Saturday, the GCG found that NorthRail is “not producing the desired outcomes; no longer achieving the objectives and purposes for which it was designed and created; and not cost efficient and does not generate the level of social, physical and economic returns vis-a-vis the resource inputs.”

“Pursuant to Section 5(a) of Republic Act No. 10149 or the GOCC Governance Act of 2011, the GCG has determined that NorthRail has met the standards for abolition,” the order read.

The Board of Directors of the Bases Conversion and Development Authority (BCDA) will serve as administrator and liquidator of NorthRail.

The BCDA is tasked to settle NorthRail’s liabilities, including the payment of separation incentive pay to affected officials and personnel; formulate a Change Management Plan for affected stakeholders; and conduct an inventory of all pending cases brought by and against the abolished corporation.

The separation pay will be charged against the available corporate funds of NorthRail, subject to existing budgeting, accounting, and auditing laws, rules and regulations.

The BCDA is also mandated to undertake the necessary steps in the liquidation of NorthRail’s assets and assist in the winding-up of its corporate affairs; conduct an inventory of all its assets and liabilities; and surrender to the Commission on Audit the original copies of its corporate books of account and financial records.

It is likewise designated to determine all NorthRail’s existing programs and projects that are to be terminated or transferred to concerned government agencies, subject to existing laws, rules and regulations.

The GCG is directed to monitor the implementation of MO 17, while the Securities and Exchange Commission (SEC) is tasked to