Legal points

Late last month, the Supreme Court, deciding en banc, upheld the legality of the P65-billion Light Rail Transit (LRT) Line 1 Extension project from Baclaran to Bacoor, Cavite.

- MARY ANN LL. REYES

The SC denied a petition filed by Bagong Alyansang Makabayan, et al., questioning the legality of the concession agreement for the Manila LRT-1 Extension project.

On Sept. 12, 2014, the then Department of Transportation and Communications (DOTC) and Light Rail Transit Authority (LRTA) executed the assailed concession agreement with the Light Rail Manila Consortium (LRMC), composed of the Metro Pacific Rail Corp., Ayala Corp.'s AC Infrastructure Holdings Corp. and the Philippine Investment Alliance for Infrastructure's Macquarie Infrastructure Holdings Pte Ltd., to construct the LRT Line 1 extension and operate and maintain it for 32 years.

The petitioners claimed that the concession agreement was unconstitutional and detrimental to the Filipino people.

They asked the High Court to declare the agreement null and void based on a number of grounds.

One of the issues raised was the grant to the concessionaire of the right to periodically adjust the LRT fare without notice and hearing as required under the Public Service Act (PSA).

Another is that the DOTC and LRTA did not have the authority to enter into the agreement. They insisted that the concession agreement is essentially a public utility franchise which can only be granted by Congress. With respect to the construction and maintenance of a light rail system, petitioners maintained that the franchise or authority was granted to LRTA through Executive Order 603 which contains no provision allowing it to delegate its function to another entity.

They also noted that the powers and functions over railways of the DOTC, now Department of Transportation (DOTr), do not include the authority to grant a franchise for the LRT's construction, operation and maintenance.