Renegotiation of $503-M Northrail contract not yet final

Manila, Philippines - A renegotiation of the $503- million contract for the Northrail contract has not been finalized, the Department of Transportation and Communications said yesterday.

Transportation Secretary Jose de Jesus said that review of the contract was still ongoing. “I wish to stress that no decision has been reached yet with respect to the Northrail project,” he said.

“The project and all its aspects are still undergoing comprehensive review.” De Jesus said he is clarifying news reports quoting Transportation Undersecretary for Civil Aviation and Railways Glicerio Sicat that renegotiation had already been completed.

“(The news reports) tended to imply that the agreement with the existing contractor of the Northrail project has already been finalized,” he said.

Last week, De Jesus said they are still discussing the details of the contract with the contractor, the China National Machinery and Equipment Corp. Group.

“We’re looking at the terms of the agreement, the pricing, and so on,” he said. Meanwhile, Angeles City Mayor Edgardo Pamintuan warned yesterday that failure in the renegotiation of the Northrail project could imperil diplomatic relationships between the Philippines and China.

The former chairman of the North Luzon Railways Corp. (Northrail) advised government representatives to fast-track the renegotiation.

“When I started as chair of Northrail, we were five years behind, and we were able to move on after I renegotiated it,” he said.

Pamintuan said investors and Filipino businessmen were excited to see movements in the project that led to the construction of viaduct posts in Malolos and in Guiguinto town.

Steel bars protruding from the concrete viaduct posts are now being eaten by rust, he added. Pamintuan said the administration must look close on the project to preserve the country’s diplomatic relations with China.

“ So that relationship with China will not suffer, we should talk now whether the project would be dropped since we are paying the interest of the loan,” he said.

“Let us face the truth, even if costly, it’s not China’s fault because it only lent the money, and the administration respects contracts and any amendment made therein.”

Pamintuan said China is serious about completing the project since it was their first project abroad and first overseas development assistance. “Northrail is their biggest project in the Philippines, they want to make it a benchmark for other projects,” he said.

“They want to showcase NorthRail that China can do much better that other countries in coming up with this project.” Conceived in the mid-1990s, the Northrail project was aimed at providing a rapid mass transport system that will connect Metro Manila and Central Luzon.

Phase 1 of the project is the 32-kilometer stretch between Caloocan City and Malolos city in Bulacan. It is being built on the old Philippines National Railways (PNR) right of way, which was cleared of some 27,000 squatter families in 2005. The PNR right of way was established in the late 1800s by the Spanish colonial government. – With Dino Balabo