RODOLFO B. ALBANO, PETITIONER, VS. HON. RAINERIO O. REYES, PHILIPPINE PORTS AUTHORITY, INTERNATIONAL CONTAINER TERMINAL SERVICES, INC., E. RAZON, INC., ANSCOR CONTAINER CORPORAT…

This is a Petition for Prohibition with prayer for Preliminary
Injunction or Restraining Order seeking to restrain the respondents Philippine
Ports Authority (PPA) and the Secretary of the Department of Transportation and
Communications Rainerio O. Reyes from awarding to the
International Container Terminal Services, Inc. (ICTSI) the contract for the
development, management and operation of the Manila International Container
Terminal (MICT).

On April 20, 1987, the PPA Board adopted its Resolution No. 850
directing PPA management to prepare the Invitation to Bid and all relevant
bidding documents and technical requirements necessary for the public bidding
of the development, management and operation of the MICT at the Port of Manila,
and authorizing the Board Chairman, Secretary Reinerio
O. Reyes, to oversee the preparation of the technical and the documentation
requirements for the MICT leasing as well as to implement this project.

Accordingly, respondent Secretary Reyes, by DOTC Special Order
87-346, created a seven (7) man “Special MICT Bidding Committee”
charged with evaluating all bid proposals, recommending to the Board the best
bid, and preparing the corresponding contract between the PPA and the winning
bidder or contractor.  The Bidding
Committee consisted of three (3) PPA representatives,
two (2) Department of Transportation and Communications (DOTC) representatives,
one (1) Department of Trade and Industry (DTI) representative and one (1) private sector
representative.  The PPA management prepared the terms of reference, bid documents and
draft contract which materials were approved by the PPA Board.

The PPA published the Invitation to Bid several times in a
newspaper of general circulation which publication included the reservation by
the PPA of “the right to reject any or all bids and to waive any
informality in the bids or to accept such bids which may be considered most advantageous
to the government.”

Seven (7) consortia
of companies actually submitted bids, which bids were opened on July 17,
1987 at the PPA Head
Office.  After evaluation of the several
bids, the Bidding Committee recommended the award of the contract to develop,
manage and operate the MICT to respondent International Container Terminal
Services, Inc. (ICTSI) as having offered the best Technical and Financial
Proposal.  Accordingly, respondent
Secretary declared the ICTSI consortium as the winning bidder.

Before the corresponding
MICT contract could be signed, two successive cases were filed against the
respondents which assailed the legality or regularity of the MICT bidding.  The first was Special Civil Action 55489 for
“Prohibition with Preliminary Injunction” filed with the RTC of Pasig by Basilio H. Alo, an alleged “concerned taxpayer”, and, the second
was Civil Case 88-43616 for
“Prohibition with Prayer for Temporary Restraining Order (TRO)” filed with
the RTC of Manila by C.F. Sharp Co., Inc., a member of the nine (9) firm
consortium — “Manila Container Terminals, Inc.” which had actively
participated in the MICT Bidding.

Restraining Orders were
issued in Civil Case 88-43616 but these were subsequently lifted by this Court
in Resolutions dated March 17, 1988 (in G.R. No. 82218 captioned “Hon. Rainerio O. Reyes etc., et al. vs. Hon. Doroteo
N. Caneba, etc., et al.) and April 14, 1988 (in G.R.
No. 81947 captioned “Hon. Rainerio O. Reyes
etc., et al. vs. Court of Appeals, et al.”)

On May 18, 1988, the President
of the Philippines approved the proposed MICT Contract, with directives
that “the responsibility for planning, detailed engineering, construction,
expansion, rehabilitation and capital dredging of the port, as well as the
determination of how the revenues of the port system shall be allocated for
future port works, shall remain with the PPA; and the contractor shall not
collect taxes and duties except that in the case of wharfage
or tonnage dues and harbor and berthing fees, payment to the Government may be
made through the contractor who shall issue provisional receipts and turn over
the payments to the Government which will issue the official receipts.”
(Annex “I”).

The next day, the PPA and the ICTSI perfected the MICT Contract
(Annex “3”) incorporating therein by “clarificatory
guidelines” the aforementioned presidential directives.  (Annex “4”)

Meanwhile, the petitioner, Rodolfo A. Albano
filed the present petition as citizen and taxpayer and as a member of the House
of Representatives, assailing the award of the MICT contract to the ICTSI by
the PPA.  The petitioner claims that
since the MICT is a public utility, it needs a legislative franchise before it
can legally operate as a public utility, pursuant to Article 12, Section 11 of the 1987 Constitution.

The petition is devoid of merit.

A review of the applicable provisions of law indicates that a
franchise specially granted by Congress is not necessary for the operation of
the Manila International Container Port (MICP) by a private entity, a contract
entered into by the PPA and such entity constituting substantial compliance
with the law.

1.  Executive Order No. 30,
dated July 16, 1986,
provides:

WHEREFORE, I, CORAZON C. AQUINO, President of the Republic of the Philippines, by
virtue of the powers vested in me by the Constitution and the law, do hereby
order the immediate recall of the franchise granted to the Manila International Port Terminals, Inc. (MIPTI) and authorize
the Philippine Ports Authority (PPA) to take over, manage and operate the Manila
International Port Complex at North Harbor, Manila and undertake the provision
of cargo handling and port related services thereat, in accordance with P.D.
857 and other applicable laws and regulations.

Section 6 of Presidential Decree No. 857 (the Revised Charter of
the Philippine Ports Authority) states:

a)  The corporate duties of
the Authority shall be:

*      *      *

(ii)  To supervise, control,
regulate, construct, maintain, operate, and provide such facilities or services
as are necessary in the ports vested
in, or belonging to the Authority.

*     *      *

(v)  To provide services (whether
on its own, by
contract, or otherwise) within the Port Districts
and the approaches thereof, including but not limited to  –

–     berthing, towing,
mooring, moving, slipping, or docking of any vessel;

–     loading or discharging
any vessel;

–     sorting, weighing,
measuring, storing, warehousing, or otherwise handling goods

*       *      *

b)  The corporate powers of
the Authority shall be as follows:

*      *      *

(vi)  To make or enter into
contracts of any kind or nature to enable it to discharge its functions under this Decree.

*      *      *

[Emphasis supplied.]

Thus, while the PPA has been tasked, under E.O. No. 30, with the
management and operation of the Manila International Port Complex and to
undertake the providing of cargo handling and port related services thereat,
the law provides that such shall be in accordance with P.D. 857 and other
applicable laws and regulations.” On the other hand, P.D. No. 857 expressly
empowers the PPA to provide
services within Port Districts “whether on its own, by contract, or
otherwise” [Sec. 6(a)(v).] Therefore, under the terms of E.O. No. 30 and
P.D. No. 857, the PPA may contract with the International Container Terminal
Services, Inc. (ICTSI) for the management, operation and development of the
MICP;

2.  Even
if the MICP be considered a public utility^[1],
or a public service^[2]
on the theory that it is a “wharf” or a “dock”^[3]
as contemplated under the Public Service Act, its operation would not
necessarily call for a franchise from the Legislative Branch.  Franchises issued by Congress are not
required before each and every public utility may operate.  Thus, the law has granted certain
administrative agencies the power to grant licenses for or to authorize the
operation of certain public utilities. 
(See E.O. Nos. 172 and 202)

That the Constitution provides in Art. XII, Sec. 11 that the
issuance of a franchise, certificate or other form of authorization for the
operation of a public utility shall be subject
to amendment, alteration or repeal by Congress does not necessarily
imply, as petitioner posits, that only Congress has the power to grant such
authorization.  Our statute books are
replete with laws granting specified agencies in the Executive Branch the power
to issue such authorization for certain classes of public utilities.^[4]

As stated earlier, E.O. No. 30 has tasked the PPA with the
operation and management of the MICP, in accordance with P.D. 857 and other
applicable laws and regulations. 
However, P.D. 857 itself authorizes the PPA to perform the service by
itself, by contracting it out, or through other means.  Reading E.O. No. 30 and P.D. No. 857
together, the inescapable conclusion is that the lawmaker has empowered the PPA
to undertake by itself the operation and management of the MICP or to authorize its operation and management by
another by contract or other means, at its option.  The latter power having been delegated to the
PPA, a franchise from Congress to authorize an entity other than the PPA to
operate and manage the MICP becomes unnecessary.

In the instant case, the PPA, in the exercise of the option
granted it by P.D. No. 857, chose to contract out the operation and management
of the MICP to a private corporation. 
This is clearly within its power to do. 
Thus, PPA’s acts of privatizing the MICT and
awarding the MICT contract to ICTSI are wholly with in the jurisdiction of the
PPA under its Charter which empowers the PPA to “supervise, control, regulate,
construct, maintain, operate and provide such facilities or services as are
necessary in the ports vested in, or belonging to the PPA.” (Section 6(a) ii, P.D. 857)

The contract between the PPA and ICTSI, coupled with the
President’s written approval, constitute the necessary authorization for ICTSI’s operation and management of the MICP.  The award of the MICT contract approved by no
less than the President of the Philippines
herself enjoys the legal presumption of validity and regularity of official
action.  In the case at bar, there is no
evidence which clearly shows the constitutional
infirmity of the questioned act of government.

For these reasons the contention that the contract between the
PPA and ICTSI is illegal in the absence of a franchise from Congress appears bereft of any legal basis.

3.  On the peripheral
issues raised by the party, the following observations may be made:

A.  That petitioner herein
is suing as a citizen and taxpayer and as a Member of the House of
Representatives, sufficiently clothes him with the standing to institute the
instant suit questioning the validity of the assailed contract.  While the expenditure of public funds may not
be involved under the contract, public interest is definitely involved
considering the important role of the MICP in the economic development of the
country and the magnitude of the financial consideration involved. 
Consequently, the disclosure provision in the Constitution^[5] would constitute sufficient authority for
upholding petitioner’s standing.  [Cf. Tanada v. Tuvera, G.R. No. 63915,
April 24, 1985, 136 SCRA 27, citing Severino v.
Governor General, 16 Phil. 366 (1910), where the Court considered the
petitioners with sufficient standing to institute an action where a public
right is sought to be enforced.]

B.  That certain committees
in the Senate and the House of Representatives have, in their respective
reports, and the latter in a resolution as well, declared their opinion that a
franchise from Congress is necessary for the operation of the MICP by a private
individual or entity, does not necessarily create a conflict between the
Executive and the Legislative Branches needing the intervention of the Judicial
Branch.  The Court is not faced with a situation
where the Executive Branch has contravened an enactment of Congress.  As discussed earlier, neither is the Court
confronted with a case of one branch usurping a power pertaining to another.

C.  Petitioner’s contention
that what was bid out, i.e., the development, management and operation of the
MICP, was not what was subsequently contracted, considering the conditions
imposed by the President in her letter of approval, thus rendering the bids and
projections immaterial and the procedure taken ineffectual, is not supported by
the established facts.  The conditions
imposed by the President did not materially alter the substance of the
contract, but merely dealt on the details of its implementation.

D.  The determination of whether or not the
winning bidder is qualified to undertake the contracted service should be left
to the sound judgment of the PPA.  The
PPA, having been tasked with the formulation of a plan for the development of
port facilities and its implementation [Sec. 6(a)(i)],
is the agency in the best position to evaluate the feasibility of the
projections of the bidders and to decide which bid is compatible with the
development plan.  Neither the Court, nor
Congress, has the time and the technical expertise to look into this matter.

Thus, the Court in Manuel v. Villena (G.R. No. L-28218, February 27, 1971, 37 SCRA 745) stated:

[C]ourts, as a rule, refuse to interfere with proceedings undertaken by administrative bodies or
officials in the exercise of
administrative functions.  This is so because such bodies are
generally better equipped technically to decide administrative questions and
that non-legal factors, such as government policy on the matter, are usually involved in the decisions.  [at p. 750.]

In conclusion, it is evident that petitioner has failed to show a
clear case of grave abuse of discretion amounting to lack or excess of
jurisdiction as to warrant the issuance of the writ of prohibition.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

Fernan, C.J., Narvasa,
Melencio-Herrera, Cruz, Gancayco,
Bidin, Cortes, Griño-Aquino,
Medialdea, and
Regalado, JJ., concur.

Gutierrez, Jr., J., concur with
a short separate opinion.

Feliciano, J., in the result.

Padilla and Sarmiento, JJ., no part.

^[1]
A “public utility” is a
business or service engaged in regularly supplying the public with some
commodity or service of public consequence such as electricity, gas, water,
transportation, telephone or telegraph service. 
Apart from statutes which define the public utilities that are within
the purview of such statutes, it would be difficult to construct a definition
of a public utility which would fit every conceivable case.  As its name indicates, however, the term
public utility implies a public use and service to the public.  (Am. Jur. 2d V. 64,
p. 549)

^[2]
The Public Service Act (C.A. No. 146,
as amended) provides that the term public service “includes every
person that now or hereafter may own, operate, manage, or
control in the Philippines, for hire or compensation, with general or limited
clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street
railway, traction railway, sub-way motor vehicle, either for freight or
passenger, or both with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the
transportation of passengers and freight or both, shipyard, marine railway,
refrigeration plant, canal, irrigation system, gas, electric light, heat and
power, water supply and power, petroleum, sewerage system, wire or wireless
communications system, wire or wireless broadcasting stations and other similar
public services . . .” [Sec. 13 (b).]

^[3]
Under P.D. 857 the term dock “includes locks, cuts entrances,
graving docks, inclined planes, slipways, quays, and other works and things
appertaining to any dock”, while wharf “means a continuous structure
built parallel to along the margin of the sea or alongside riverbanks,
canals, or waterways where vessels may lie alongside to receive or discharge cargo, embark or
disembark-passengers, or lie at rest.” [Sec. 3(j) and (o).]

^[4]
Examples of such agencies are:

1.  The
Land Transportation Franchising and Regulatory Board created under E.O. No. 202,
which is empowered to “issue, amend, revise, suspend or
cancel Certificates of Public Convenience or permits authorizing the operation
of public land transportation services provided by motorized vehicles, and to
prescribe the appropriate terms and conditions therefor”
[Sec. 5(b).]

2.  The
Board of Energy, reconstituted into the Energy Regulatory Board created under
E.O. No. 172, is empowered to license refineries and regulate their capacities
and to issue certificates of public convenience for the operation of electric
power utilities and services, except electric cooperatives [Sec. 9(d) and (e), P.D. No. 1206.]

^[5]
Art. II, Sec. 28.  Subject to reasonable
conditions prescribed by law, the State adopts and implements a policy of full
disclosure of all its transactions involving public interest.

Clean

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