PNCC illegally collecting fees?

By Ron Gagalac, ABS-CBN News

Posted at Nov 15 2010 08:32 PM | Updated as of Nov 16 2010 11:11 PM

MANILA, Philippines - The Senate Committee on Finance on Monday said the Philippine National Construction Corporation (PNCC) is still illegally collecting fees, which could have prompted the incessant increase in toll rates in both the North Luzon and South Luzon Expressways.

It was learned in the Senate budget hearing on Monday morning that the PNCC continues to collect about 6% of the toll collections in NLEX and SLEX despite an expired franchise.

“The PNCC franchised has expired and has no more business appropriating 6 percent as part of its toll collection,” Senator Franklin Drilon said. He is head of the Senate finance committee.

PNCC data show that the 6% is about P300-P400 million a year from the operations of the NLEX and P60 million a year from SLEX.

Sen. Ralph Recto agreed with the finding, saying this may have caused the rising cost of toll on both expressways since the investors have to recover the shares given to PNCC.

PNCC President and Chief Executive Ma. Theresa Defensor, however, justified the 6% share as a "commercial agreement.”

It is sourced from the net profits, rather from the toll collection rates, she explained.

Defensor said “part on commercial arrangement ‘yon, kung ano man ang kinikita, ‘yon ang pinaghahatian namin. It does not affect anything, it does not affect the toll fees."

Recto, however, stressed “it does affect the toll, because you can reduce the (cost) by 6%. It is your agreement with the Malaysian investor but it is an additional recovery for them because it goes to you."

Asked where the money is earmarked, Defensor said "it becomes part of the corporate funds, salaries."

PNCC is a government-owned and -controlled corporation tasked previously to operate and maintain the Luzon expressways and are now shareholders to various investors of the superhighways.

Drilon noted the amount collected should not be used for PNCC expenses such as salaries or operational costs but should be remitted directly to the national government.

He noted the 6% share is not a mere commercial arrangement. It is like a royalty fee that the PNCC used to collect when it still had the franchise.
P6-B debt to gov’t

In the same hearing, senators also found out that PNCC has an outstanding debt of around P6 billion since 1977.

PNCC said it has already paid P500 million to the government.

Defensor explained the company is undergoing financial restructuring, with debts expected to be paid in the next 25 years.

The good news, she said, is that PNCC has been in the black in the past 3 years.

The senators also took note of the appointment of Chairman Emeritus Josefa Aquino. Defensor admitted that Aquino receives about P300,000 in salaries per month from PNCC.

Senators Drilon and Recto questioned the PNCC for creating a new position that is not included in its by-laws. It was also learned by the committee that stockholders were not consulted regarding this.

PNCC Vice President Atty. Glenna Jean Ogan said, however, that this is not prohibited. The board of directors also gave their blessings to the appointment, she said.