Light Rail Transit Authority (2)

December 12, 2006 FIRB RESOLUTION NO. 012-06 SUBJECT : Light Rail Transit Authority (2) WHEREAS, the Light Rail Transit Authority (LRTA) is engaged in the operation of a mass transport system intended to answer the transport needs of commuters belonging generally to the low and middle income groups and to decongest the road traffic network; WHEREAS, Line 1 Capacity Expansion Project Phase II Package A (Capacity Expansion) aims at further expanding the LRT Line 1 ridership from 27,000 passengers per hour per direction (pphpd) to 40,000 pphpd; WHEREAS, the Capacity Expansion Project is intended to cope with the present and expected increase in the volume of passengers using LRT Line 1 and additional passengers generated under the integrated MRT Line 1, 2 and 3 System; WHEREAS, the Capacity Expansion II Project involves the acquisition and installation of air-conditioning units in the old fleet and acquisition of twelve (12) additional air-conditioning 4-car trains which will require additional upgrading and equipment for signaling, telecommunications, traction power supply and distributions, track works, automated fare collection system and additional civil works for some stations and depot to accommodate the new trains and enhance the headway; WHEREAS, the FIRB in its August 8, 2006 meeting already approved the amount of P324,355,149.00 covering the taxes and duties of the LRTA's 2006 importations for the Line 1 Capacity Expansion Project; WHEREAS, the LRTA requested for an additional tax subsidy to cover the taxes and duties on importations of the Line 1 capacity Expansion Project; WHEREAS, if the taxes and duties on the Project-related importations are borne by the LRTA, it may have financial difficulty in complying with such obligations, in view of its tight financial position; WHEREAS, there is also a need to ensure that all importations covered by the tax subsidy grant will be used exclusively for the Line 1 Capacity Expansion Project and not for other purposes; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to grant additional tax subsidy to the LRTA to cover taxes and duties on its 2006 importations of materials and equipment for the Project in the amount of FIVE HUNDRED SIX MILLION FIVE HUNDRED SIXTY FIVE THOUSAND ONE HUNDRED SIXTY SIX (P506,565,166.00) only: Provided, however , that: (a) the issuance of Certificate of Entitlement to Subsidy (CES) shall be based on actual billings of taxes and duties submitted by the LRTA to the FIRB evidencing the importations; and (b) all materials and equipment for which tax subsidy is granted shall form part of the regular inventory of the LRTA (in the case of materials and movable equipment) and/or be located in their designated project stations/operating areas (in the case of immovable equipment) as certified to by the resident Commission on Audit (COA) auditor of the LRTA and its Project Station/Operating Area Manager, respectively: Provided, finally , that the grant of such subsidy shall be in accordance with the terms and conditions of Section 14 of the 2005 General Appropriations Act, as reenacted, subject to the availability of funds therefor, pursuant to the terms and conditions of the Rules and Regulations to Implement the Subsidy Provision Under Executive Order No. 93. HCEcaT (SGD.) MARGARITO B. TEVES Secretary of Finance Chairman - FIRB Reference: Joint FIRB-Technical Committee Meeting dated December 12, 2006