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Transpo Reviewer

Transpo Reviewer

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Published by unliwiited

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Categories:Types, Research, Law
Published by: unliwiited on Feb 14, 2010
Copyright:Attribution Non-commercial


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Based on the outline of Prof. Rodrigo Quimbo
I. General ConsiderationsA. Public Utilities1. Article XII, 1987 Constitution
Art. XII, Section 11. No franchise, certificate or any other form of authorization for the operation of a public utility shall be grantedexcept to citizens of the Philippines or to corporations or associationsorganized under the laws of the Philippines at least 60% of whosecapital is owned by such citizens, nor shall such franchise, certificate orauthorization be exclusive in character or for a longer period than fiftyyears. Neither shall any franchise or right be granted except under thecondition that it shall be subject to amendment, alteration or repeal bythe Congress when the common good so requires. The State shallencourage equity participation in public utilities by the general public.The participation of foreign investors in the governing body of anypublic utility enterprise shall be limited to their proportionate share inits capital, and all the executive and managing officers of suchcorporation or association must be citizens of the Philippines.Section 17. In times of national emergency, when the publicinterest so requires, the State may, during the emergency and underreasonable terms prescribed by it, temporarily take over or direct theoperation of any privately owned public utility or business affected withpublic interest.Section 18. The State may, in the interest of national welfare ordefense, establish and operate vital industries and, upon payment of  just compensation, transfer to public ownership utilities and otherprivate enterprises to be operated by the Government.
Section 19. The State shall regulate or prohibit monopolies whenthe public interest so requires. No combinations in restraint of trade orunfair competition shall be allowed.
(a) What is a public utility?A
 public utility 
is a business or service engaged in regularly supplying thepublic with some commodity or service of public consequence such as electricity,gas, water, transportation, telephone or telegraph service. Apart from statuteswhich define the public utilities that are within the purview of such statutes, itwould be difficult to construct a definition of a public utility which would fit everyconceivable case. As its name indicates, however, the term public utility impliesa public use and service to the public. (Am. Jur. 2d V. 64, p.549.) (Albano vsReyes)(b) What is a public service? The Public Service Act (CA No. 146 as amended) provides that the termpublic service "includes every person that now or hereafter may own, operate,manage, or control in the Philippines, for hire or compensation, with general orlimited clientele, whether permanent, occasional or accidental, and done forgeneral business purposes, any common carrier, railroad, street railway, tractionrailway, sub-way motor vehicle, either for freight or passenger, or both with orwithout fixed route and whatever may be its classification, freight or carrierservice or any class, express service, steamboat, or steamship line, pontines,ferries, and water craft, engaged in the transportation of passengers and freightor both, shipyard, marine repairshop, [warehouse], wharf or dock, ice plant, icerefrigeration plant, canal, irrigation system, gas, electric light, heat and power,water supply and power, petroleum, sewerage system, wire or wirelesscommunications system, wire or wireless broadcasting stations and other similarpublic services..." [Sec. 13(b)] (Albano vs Reyes)Albano vs Reyes 175 SCRA 264F:
On 20 April 1987, the Phil. Ports Authority (PPA) adopted a resolution directingmgmt. to prepare the Invitation to Bid and all relevant bidding documents necessary forthe public bidding of the development, mgmt., and operation of the Manila Intl.Container Terminal (MICT) and authorized the Board Chairman Secretary Reyes tooversee and implement the project.Secretary Reyes created a 7-man MICT Bidding Committee to evaluate all bidsand recommend to the Board the best bid. The PPA published the Invitation to Bid withthe reservation that it had the right to reject any bid and to accept such bid it may deemadvantageous to the govt.Seven companies submitted bids. The Committee recommended that thecontract be awarded to Intl. Container Terminal Services (ICTSI) on the ground that itoffered the best technical and financial proposal. Secretary Reyes awarded the contractto ICTSI. Before the contract could be signed, two cases were filed questioning thelegality or regularity of the bidding. The first was a special action for prohibition with
prelim injunction filed by Alo, a concerned taxpayer. The second was a civil case forprohibition with prayer for TRO filed by Sharp Co. which actively participated in thebidding. The President approved the proposed MICT contract. The PPA and ICTFSIperfected the contract. Rodolfo Albano, a member of the House of Representatives filedthe present case assailing the award of the contract on the ground that since the MICT isa public utility, it needs a legislative franchise before it can legally operate as a publicutility.
Issue : WON a legislative franchise is necessary.Held : NO. Petition dismissed.A franchise specially granted by Congress is not necessary for theoperation of the MICT by a private entity. A contract entered into by the PPA andsuch entity is substantial compliance with the law. 1. Executive Order No. 30authorized the PPA to take over, manage and operate the MICT in accordancewith PD 857 (Revised Charter of the PPA). PD 857 expressly empowers the PPAto provide services within Port Districts "whether on its own, by contract orotherwise." Therefore, under EO 30 and PD 857, the PPA may contract with ICTSIfor the mgmt., operation and devt. of the MICT.2. Even if the MICT be considered a public utility or a public service on the theorythat it is a wharf or a dock as contemplated by the Public Service Act, itsoperation would not necessarily call for a legislative franchise. Legislativefranchises are not required before each and every public utility may operate. The law has granted certain administrative agencies the power to grant licensesfor or to authorize the operation of certain public utilities. That the Consti provides that the issuance of a franchise for the operationof a public utility shall be subject to amendment, alteration or repeal by Congressdoes not necessarily imply that only Congress has the power to grant suchauthorization. There are several laws granting specified agencies in theExecutive Dept. the power to issue such authorization for certain classes of public utilities. [ 1. LTFRB wrt Certificates of Public Convenience authorizing theoperation of public land transportation services provided by motorized vehicles;2. ERB wrt operation of electric power utilities and services except electric coops]Reading EO 30 and PD 857 together, the PPA has been empowered toundertake by itself or to authorize the operation and mgmt. of the MICT byanother by contract. The latter power having been delegated to the PPA, alegislative franchise is no longer necessary. In this case, the PPA's contractingwith ICTSI is wholly within its jurisdiction and powers.3. The award of the contract to ICTSI is all the authorization that is necessary. The award made by the PPA and the President enjoys the presumption of validityand regularity of official action. There is no evidence to the contrary.4. Albano has standing to assail the contract. While the expenditure of publicfunds may not be involved under the contract, public interest is definitelyinvolved considering the important role of the MICP in the economic devt. of thecountry and the magnitude of the amount involved. He has sufficient standingsince a public right (disclosure provision) is sought to be enforced.5. There in no conflict among the 3 branches of govt. The Executive Dept. hasnot contravened an act of Congress. There is no usurpation of powers of anotherbranch.

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