Transportation Undersecretary Jose Cortez Jr. said the project would greatly improve the transport sector.
"The project will benefit all, not just the President (Arroyo). Huwag na ho haluan ng politika (Let us not mix politics in this project)," Cortez said at yesterday’s Fernandina Media Forum.
The North Rail project may start construction in November. Cortez said they need at least 2,000 workers and qualified former rail dwellers who were affected by the project could be hired for the construction work.
After three years, operation and maintenance will be awarded to private companies in a competitive bidding.
"We really would like to say again that the North Rail project is aboveboard. When we started negotiating with China, they made a study for free. The first offer was $600 million, 12 years to pay with 4.5-percent interest. We negotiated and eventually it was lowered to $421 million, 20 years to pay at three-percent interest rate per annum. The interest here of the government is protected," said Cortez.
He explained that 95 percent of the total project cost, which amounts to $503 million including taxes, will be assumed by China while the Development Bank of the Philippines (DBP) will assume the remaining five percent (about $21 million) at six-percent interest per annum.
Cortez explained that in a tied loan, the lending country commands the terms. They may have a bidding among themselves in their country, as in the case of Japan, but since China is a socialist state, the companies are owned by the state.
"They don’t need to have a bidding. They wrote us that China National Machinery & Equipment Import-Export Corp. (CNMEG) will be their contractor, and they said take it or leave it," he said. There is also no penalty for delays, just the three-percent interest on the loan from China and six percent loan interest from DBP.
Cortez stressed that contrary to the study made by the UP Law Center, the North Rail project is a double-track railway with more than 32 kilometers each way, for a total of 64 kilometers from Caloocan to Malolos and back. All the tracks, trains and other equipment are brand new.
Cortez emphasized that there was no anomaly in the North Rail project. "I saw to it that this is not overpriced. We are prepared to answer all legal questions. There is no reason for the Supreme Court to stop the project at all," he said.
The main goal of the project is an efficient mass transport system for passengers.
"This is not a rehabilitation project. It was a very unfair opinion. We were never interviewed by the UP Law Center when they made the study," he said.
Among those who will benefit from the project are Manila-bound passengers from Malolos or Valenzuela. Expected travel time is 33 minutes. The train will run on diesel fuel (upgradeable to electricity) at a maximum speed of 120 kilometers per hour. In comparison, the speed of Philippine National Railway (PNR) trains now is only five kph.
Cortez also disclosed that they are currently looking at the possibility of using diesel mixed with coconut oil to lessen fuel costs further. — Sandy Araneta