MANILA – Malacañang has officially released a directive for the dissolution of the North Luzon Railways Corp. (NorthRail).

Executive Secretary Lucas Bersamin, under the authority of the President, signed Memorandum Order (MO) 17 on October 19, following an evaluation by the Governance Commission for Government-Owned and -Controlled Corporations (GCG).

MO 17, which was made public on Saturday, outlines that the GCG determined NorthRail to be ineffective, no longer aligned with its original objectives, cost-inefficient, and failing to deliver anticipated social, physical, and economic benefits in proportion to the resources invested.

“The GCG has determined that NorthRail has met the criteria for dissolution as outlined in Section 5(a) of Republic Act No. 10149, known as the GOCC Governance Act of 2011,” the memorandum stated.

The Board of Directors of the Bases Conversion and Development Authority (BCDA) has been appointed to oversee the dissolution process and handle NorthRail’s outstanding obligations. This includes providing separation incentives to affected personnel, developing a Change Management Plan for stakeholders impacted by the decision, and conducting a comprehensive review of all pending legal cases involving the now-abolished corporation.

The expenses for separation incentives will be covered by NorthRail’s available corporate funds, in accordance with established budgeting, accounting, and auditing regulations.

Additionally, the BCDA is entrusted with managing the liquidation of NorthRail’s assets and facilitating the winding-up of its corporate affairs. They are responsible for compiling a complete inventory of assets and liabilities and submitting the original corporate financial records to the Commission on Audit.

The BCDA is also tasked with determining which of NorthRail’s existing programs and projects should either be terminated or transferred to relevant government agencies, following existing laws and regulations.

The GCG has been given the responsibility to oversee the execution of MO 17, while the Securities and Exchange Commission (SEC) will work closely with the BCDA to ensure NorthRail’s dissolution aligns with the provisions of Republic Act 11232, also known as the Revised Corporation Code of the Philippines.

The Department of Transportation, in its capacity as the overseeing agency for NorthRail, will continue to supervise the liquidation and winding-up procedures of the defunct corporation.

The Office of the Government Corporate Counsel will extend the necessary legal support to the BCDA in relation to NorthRail’s dissolution and winding-up procedures.

NorthRail, initially established as a fully-owned subsidiary of the BCDA on July 31, 1995, had the primary mission of developing, constructing, operating, and managing a railroad system serving Metro Manila, Central, and Northern Luzon.

On May 20, 2019, the GCG issued MO 2019-05, initiating the deactivation of NorthRail.

MO 17 takes immediate effect. (ai/mnm)