Malacañang has issued a memorandum abolishing the North Luzon Railways Corporation (NORTHRAIL) for not producing the desired outcomes and not generating the level of social, physical, and economic returns.

Executive Secretary Lucas Bersamin signed Memorandum Order No. 17 by the authority of President Marcos on Oct. 19.

Based on the Memorandum, the Governance Commission for GOCCs (GCG) determined that NORTHRAIL has met the standards for abolition which include:

• Not producing the desired outcomes
• No longer achieving the objectives and purposes for which it was designed and created
• Not cost-efficient and does not generate the level of social, physical, and economic returns vis-a-vis the resource inputs

With this, Malacañang tasked the Bases Conversion and Development Authority (BCDA) board of directors to act as the administrator and liquidator of NORTHRAIL and settle its liabilities, including the payment of separation incentive pay to affective officials and personnel.

The BCDA directors, with the help of the Department of Transportation (DOTr), shall undertake the necessary steps in liquidating NORTHRAIL's assets and assist in the winding up of its corporate affairs.

They shall also conduct an inventory of all NORTHRAIL's existing programs and projects and either terminate or transfer them to concerned government agencies and a list of NORTHRAIL's assets and liabilities and how to dispose of or settle them.

They must also formulate a Change Management Plan for affected stakeholders.

The BCDA directors shall conduct an inventory of all pending cases brought by and against NORTHRAIL and formulate the appropriate actions to resolve them. The Office of the Government Corporate Counsel shall provide the necessary legal assistance to the BCDA in this endeavor.

Malacañang also tasked the BCDA directors to surrender to the Commission on Audit (COA) original copies of NORTHRAIL's corporate books of account and financial records.

Separation Incentive Pay

All affected personnel and officials of NORTHRAIL may avail of the following separation benefits:

• First 20 years: 1.00 x Monthly Basic Salary (MBS) x No. of years
• 20 years and 1 day to 30 years: 1.25 x MBS x No. of years
• 30 years and 1 day and above: 1.50 x MBS x No. of years

The separation pay shall be charged against NORTHRAIL's available corporate funds.