Controversial Northrail Project

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In 2005, the petition filed by the group of Atty. Harry Roque before the Supreme Court was dismissed.

They wanted the high court to nullify the government’s deal with the China National Machinery and Equipment Corporation Group (CNMECG), which won the contract to build the US$503 million North Luzon Railways (Northrail) project.

Roque said the deal failed to comply with Republic Act 9184 or the Government Procurement Reform Act. This law requires all firms interested in a government contract to enter into a competitive bidding.

In Full Swing
“The government and CNMECG continue to work on the project,” a North Luzon Railways Corporation (NLRC) official who requested anonymity said. The NLRC has already begun the construction of embankment areas and retaining walls of the Northrail project.

The Northrail project has three phases. Phase one-section one will run from Caloocan to Malolos, Bulacan; phase one-section two is from Malolos to Clark; phase two is the branch line to Subic; and phase three will connect Clark to San Fernando, La Union.

NLRC wanted to finish the first phase of the project by February 2010. The government, however, has no definite deadline yet for the completion of all three phases of the project. The NLRC official said the completion of phases one and two would depend on the viability of phase one.

Above Board?
The hefty US$503 million price tag only covers phase one-section one of the project. Of this amount, US$400 million came from the China Exim bank; the rest would be government’s equity. The NLRC executive said the loan payment to China Exim bank would be spread over 20 years with a five-year grace period.

There were also charges that the government had no allocation for the contract since the certification that would prove the availability of the counterpart funds did not exist. The NLRC official refuted these claims.

No Comparison
The official said the Northrail project could not be compared to the South railway project, which was also hounded by allegations of overpricing.

According to the NLRC official, the US$50 million funding for the Southrail project was for its rehabilitation and not for rebuilding. The Northrail budget, on the other hand, would be for a full construction, which included a viaduct and embankment areas.

On this site will rise
Around 36,000 families (mainly those living in shanties along the railway running from Manila to Bulacan) had been relocated from the Northrail and Southrail areas. Housing and Urban Development Coordinating Council (HUDCC) Assistant Secretary Consuelo Suello said the relocation program started in 2005.

Oddly enough, Henry Sy’s SM Group of Companies expressed interest in building commercial centers in the Northrail stations. No agreement has been reached yet, but the government is optimistic about the prospect of having the tycoon on board its controversial railway project.

Print ed: 01/08


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