DBM recommends Northrail deactivation

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The Budget department is recommending the deactivation of North Luzon Railways Corp. (Northrail) under a government plan to trim the number of state-owned firms.

The Governance Commission for GOCCs (GCG), Budget Secretary Benjamin Diokno said, is currently also considering the abolition or mergers for other government-owned and –controlled corporations.

“For… the Northrail, we are recommending for its deactivation because it makes a lot of sense,” Diokno told reporters in an interview.

Northrail, a subsidiary of the Bases Conversion and Development Authority (BCDA), was created in 1995 to develop construct, operate and manage a railroad system that would serve Metro Manila, Central Luzon and Northern Luzon.


A project to rehabilitate and upgraded an existing line ended up being shelved in 2011 over corruption allegations and Northrail was subsequently embroiled in an arbitration case filed by a Chinese contractor.

The Duterte administration has revived the project but placed it under the Department of Transporation, prompting the BCDA last year to call for Northrail’s dissolution.

Diokno said deactivating a GOCC means the firm will no longer receive a budget from the national government, which means that it will no longer be able to operate.

This is different from abolition, which requires the repeal of the law that created the GOCC.

“[T]here are agencies with 11 board members but only have six employees. It does not make sense. It should be abolished to save on the office space, the cars etc.,” Diokno noted.

GOCCs were initially said to number 158 but the GCC has said that this is being revised following reviews that found several in the list to be research institutions or already inoperational. Others were added once these were “discovered”, the agency said.

As of mid-2016, 108 GOCCs are listed as under GCG.

The agency has said that its long-term goal is to reduce the number of state-run firms to less than 90.

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