Metro Manila traffic

Valenzuela suspends business permit of NLEX operator over RFID mess

Aika Rey

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Valenzuela suspends business permit of NLEX operator over RFID mess

TRAFFIC JAMS. This photo shows traffic at a standstill at Karuhatan Toll Plaza on December 5, 2020.

Photo from Valenzuela City LGU

(UPDATED) While its business permit is suspended, NLEX Corporation cannot collect toll payments at interchanges located in Valenzuela City

Valenzuela City Mayor Rex Gatchalian on Monday, December 7, suspended the business permit of the company operating the North Luzon Expressway (NLEX), after the toll operator failed to address the heavy traffic caused by its cashless payment system.

The new system, which uses radio-frequency identification (RFID) technology, has caused traffic gridlocks along NLEX, the main highway that links the north of Luzon to the Philippines’ capital region. This has angered Gatchalian, mayor of the Metro Manila city worst affected by the RFID mess.

At around 5:28 pm on Monday, Gatchalian personally brought the suspension order to NLEX Corporation offices in Valenzuela.

While its business permit is suspended, NLEX Corporation cannot collect toll payments at interchanges located in Valenzuela City. Gatchalian had said the suspension of business permit would mean motorists can pass through the NLEX system without paying for toll.

Hours earlier, Gatchalian sent a strongly worded letter to NLEX Corporation, giving it an ultimatum.

He said if the company failed to comply with the city government’s conditions by 5:01 pm on Monday, “the City Government will exercise its full power and authority and issue an executive order for your company to cease and desist from operation of your business.”

He also said NLEX Corporation should apologize to the public and implement a toll holiday, “pending acceptable and full solution to your RFID problem.”

The Valenzuela mayor added that the city government will “lift” all toll barriers in the city if the demands were not met.

“The monstrous traffic jam caused by the technical glitches in your RFID system is already taking its toll on the economic, mental, and general well-being of our citizens. The suffering has to stop. The public deserves better,” Gatchalian told NLEX Corporation.

NLEX Corporation in a letter dated Saturday, December 5, asked for 15 more days to submit a plan to solve the traffic congestion at the city, but Gatchalian found this response lacking.

In a phone interview with Rappler, Metro Pacific Tollways Corporation (MPTC), parent of NLEX Corporation, said the traffic congestion caused by the cashless transaction scheme is “going to improve” in the next couple of days.

MPTC senior vice president for communication Romulo Quimbo Jr acknowledged there are technical problems in the cashless transaction scheme.

“The degree of problems are not uniform but we are looking at this specific problems affecting the traffic just before the tollgate, which, of course, is the major concern,” Quimbo said.

“We are really sorry for the inconvenience the NLEX tollgates are causing. We really empathize with the constituents of Valenzuela, subjected to this almost daily gridlock. We expect to see them improving in the next few days,” Quimbo added.

Toll holiday

MPTC, however, does not share Gatchalian’s view of a toll holiday.

“We believe it is a regulatory matter and should be referred to the proper government body, the Department of Transportation and the Toll Regulatory Board (TRB),” Quimbo said.

The TRB partially supported Valenzuela City’s recommendation of a toll holiday – only if gross negligence on the part of NLEX Corporation has been proven.

“If there is a real gross negligence on the part of the toll operator and they have been greatly remiss in their responsibilities then that option might be resorted,” TRB Spokesman Julius Corpuz told CNN Philippines.

The RFID stickering scheme was strictly implemented starting August. The deadline was first set in November but was later extended to December. The final deadline was set eventually to January 11.

DOTr, TRB to blame?

Senator Sherwin Gatchalian, brother of the Valenzuela mayor, asked in an interview CNN Philippines, “Where is TRB?”

“This should not have happened if TRB was on the ball monitoring, regulating and making sure the performance of the concessionaire, the operators are up to par,” the senator said in a CNN Philippines interview.

“How come the regulator is not doing its job in terms of cracking the whip and making sure that the operators are performing up to what is written in the concession agreement?” the senator added.

Senator Gatchalian said that the concession agreement with toll operators may be revoked if it’s proven that there were violations to commitments. MPTC’s Quimbo told Rappler that they are open for a review of the terms.

The Manny Pangilinan-led Metro Pacific Tollways Corporation is the holding company of NLEX, Subic-Clark-Tarlac Expressway, Cavite Expressway, C5 Link, and Cavite-Laguna Expressway.

In an earlier briefing, the TRB admitted that the program had caused traffic congestion, but dismissed this as “birth pains” of the program.

The DOTr had earlier said it transactions at the tollways will not revert to cash payments, which was the department’s effort to prevent the spread of the coronavirus disease. –

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at