Marcos abolishes Northrail Corp.

President Ferdinand “Bongbong” Marcos Jr. ordered the abolition of the North Luzon Railways Corp. (Northrail) as the government-owned firm no longer served its purpose.

The government abolished Northrail Corp. through Memorandum Order No. 17, issued on October 19, 2023, and signed by Executive Secretary Lucas Bersamin by authority of the President.

The memorandum said the Governance Commission for Government-owned and -controlled Corporations (GCG) had determined that Northrail Corp. was “not producing desired outcomes,” “no longer achieving the objectives and purpose for which it was designed and created,” and “is not cost efficient and does not generate the level of social, physical and economic returns vis-a-vis the resource inputs.”

Northrail Corp., registered with the Securities and Exchange Commission in 1995, was created as a wholly owned subsidiary of the Bases Conversion and Development Authority (BCDA) to develop, construct, operate, and manage a railroad system to serve Metro Manila, Central Luzon, and Northern Luzon.

The state-owned firm was created to implement the Northrail project, a railroad connecting Caloocan City to Malolos, Bulacan.

The project, however, failed following the termination of contracts that the firm entered into due to several issues, such as raising necessary funds.

The National Economic and Development Authority Board approved the North-South Commuter Railway Project in 2015. It was to be financed through official development assistance from Japan, effectively rendering the Northrail project terminated.

In ordering the abolition of Northrail Corp., Marcos directed the BCDA, as administrator and liquidator of the abolished state-run firm, to settle its liabilities, including the payment of separation incentive pay to affected officials and personnel.

The GCG, on the other hand, was tasked to monitor the abolition of Northrail while the Department of Transportation, as the supervising agency, was to continue to oversee the programs and activities relative to the liquidations and winding-up of the abolished GOCC’s affairs. — DVM/KG, GMA Integrated News