NEDA okays $317-million additional cost for Northrail

CLARK FREEPORT, Pampanga , Philippines  – North Luzon Railways Corp. (Northrail) president Edgardo Pamintuan said yesterday the long-delayed Caloocan-to-Clark modern railway will now cost $317 million more, on top of its initial $1 billion cost.

In an interview with The Star, Pamintuan said this was approved yesterday morning by the board of the National Economic and Development Authority (NEDA) as proposed by his government firm.

He said the additional cost was approved after Northrail’s proposal for the upgraded cost passed through “the processes of the NEDA inter-agency coordinating council and technical boards.”

Pamintuan said NEDA’s approval of the additional $317 million was based on the foreign exchange adjustments, inflation, and “necessary variation orders required by project site conditions.”

The railways project was already delayed five years when Pamintuan assumed post as Northrail chairman in July last year. Despite the delay, Pamintuan said President Arroyo wants the entire project from Caloocan to Clark, and not just its first phase from Caloocan to Malolos, Bulacan finished within her term which ends by the middle of next year.

“The contractor Sinomach, which used to be known as China National Machinery and Equipment Corp. (CNMEC) will immediately commence the Malolos to Clark section of the project,” he said.

Northrail is set to bid out to the private sector the operations and maintainance of the project which will link the Diosdado Macapagal International Airport (DMIA) at Clark Freeport to Metro Manila. The President announced last year that DMIA will be the country’s premiere international airport.

Reacting to the President’s order for him to finish the entire project before her term ends, Pamintuan said “this is indeed a tall order for the Northrail team and me.”

“Time is still my nemesis as I face the daunting task of catching up with the five-year delay in project implementation. Rest assured that we are exerting all efforts to ensure that all of the civil and track works from Caloocan to Clark are completed on or before June 2010,” he said.

Pamintuan said “Section 1 or the Caloocan to Malolos Section of the project should have been completed in September 2007. I was able to immediately address the inadequacy in the organizational structure by increasing its technical staff from the only seven personnel when I assumed office in July 2008 to the present day 65 technical personnel all of whom are engineers.”

He said measures have been put in place to fast track the railways project.

He noted that “during our negotiations to break the impasse with the Sinomach, I was able to convince them to adopt a simultaneous, segmental construction methodology in order to meet the schedule.”

“In the past, Sinomach wanted to solely implement the project.  Now, they will be tapping the expertise of qualified Filipino engineering contractors and using local supplies to implement the project. The Sinomach however will be directly implementing the more sensitive components of the project,” he also said.

He also said that despite the higher cost, the government will greatly benefit from the project.

“Even before the railways project is completed, economic benefits can be expected from the project in these grave economic times. The use of qualified Filipino subcontractors means employment opportunities for both skilled and unskilled labor,” he noted.