G.R. No. 166910, 169917, 173630, 183599 EN BANC October 19, 2010
ERNESTO B. FRANCISCO, JR., et al., Petitioners, vs. TOLL REGULATORY BOARD, et al., Respondents.
FACTS
These consolidated petitions assail statutory provisions, presidential issuances, contracts, and toll rate hikes concerning the North Luzon Expressway (NLEX), South Luzon Expressway (SLEX), and the South Metro Manila Skyway (SMMS). Petitioners challenge the validity of Presidential Decree No. 1112 (creating the Toll Regulatory Board or TRB) and P.D. No. 1113 (granting a 30-year franchise to the Philippine National Construction Corporation or PNCC), as well as subsequent agreements allowing PNCC to assign its franchise rights to private entities like Manila North Tollways Corporation (MNTC) and the issuance of Toll Operation Certificates (TOCs) to them. The core controversy stems from the series of agreements and the TRB’s approval of toll rate adjustments, which petitioners allege were implemented without the requisite public hearings and violated constitutional provisions on franchises and due process.
The petitions also involve a direct challenge to the collection of toll fees in the SLEX, following a Regional Trial Court decision that enjoined the original franchisee from collecting tolls. Petitioners argue that the franchise grants and their assignments under the questioned presidential decrees, which were enacted during the martial law period, did not comply with the franchise requirements under the 1987 Constitution, particularly the necessity of a law enacted by Congress. They further contend that the toll rate increases were arbitrary and implemented without proper public consultation, violating the public’s right to due process and information.
ISSUE
The principal issues are: (1) Whether the franchise granted to PNCC under P.D. Nos. 1113 and 1894 remains valid under the 1987 Constitution; (2) Whether the subsequent agreements assigning PNCC’s franchise rights to private entities and the TRB’s issuance of TOCs are valid; and (3) Whether the toll rate adjustments were implemented in accordance with law and due process.
RULING
The Supreme Court dismissed the petitions and upheld the validity of the assailed franchises, contracts, and toll rate adjustments. On the first issue, the Court ruled that the franchise granted to PNCC under P.D. Nos. 1113 and 1894 remains valid. The 1987 Constitution’s provision that franchises shall be granted only by Congress did not repeal existing franchises. These presidential decrees, having the force and effect of law, were recognized as existing laws under the transitory provisions of the Constitution. Therefore, PNCC’s franchise, granted prior to the 1987 Constitution, subsists.
On the second issue, the Court upheld the validity of the agreements assigning PNCC’s rights and the TOCs issued to MNTC and other entities. P.D. No. 1112 explicitly authorizes the TRB to grant authority to operate a toll facility via a Toll Operation Certificate. The assignment of usufructuary rights by PNCC to private corporations, with presidential approval as required by the decrees, was a legitimate exercise of contractual rights under the existing franchise framework. This did not constitute a new grant of franchise but an implementation of the existing one through authorized entities.
On the third issue, the Court found that the toll rate adjustments complied with due process. The TRB conducted the required public hearings before approving the rate increases. The fact that some agreements were executed prior to the final hearing does not invalidate the process, as the rates remained subject to public scrutiny and the TRB’s final approval. The Court emphasized that the TRB possesses the expertise to determine reasonable toll rates, and its decisions, made after evaluating financial studies and public comment, are accorded respect. The petitions