Phl won't pay China yet for North Rail

MANILA, Philippines - The government is not about to pay even a portion of the $500-million loan from China, which the Arroyo administration obtained for the aborted scandal-ridden North Rail project.

Chinese officials have informed Interior Secretary Manuel Roxas II when President Aquino sent him to China two weeks ago that the loan has come due and demandable.

In a text message to The STAR yesterday, Budget Secretary Florencio Abad said the government, before making any payment, would have to determine what has been accomplished.

“We will follow the principle of equity and quantum merit and pay for what has been done or delivered,” he said.

He said it is the Department of Transportation and Communications (DOTC) that would quantify what the Chinese contractor chosen by the Chinese government for the project has accomplished.

To determine the extent of the job done and the legitimate expenses incurred by the Chinese contractor, incoming Transportation Secretary Joseph Emilio Abaya said the government would go to an international arbitration court.

He said that the arbitration court could establish the exact amount the government should pay for the aborted railway project.

“We expect that we’ll be going on arbitration, it’s a legal procedure on how to settle and compromise. We are allotting funds for the arbitration process. We expect it to wind down. We pay our obligations and start anew,” he said.

He added that DOTC officials have briefed him on the North Rail controversy.

“I am not sure of the (arbitration) venue, it should specifically state in the contract. At least, we are doing away with it, it’s a bit difficult because if you hear all the stories, the irregularities and the inconsistencies in policies, I think we are better off winding down and planning anew,” Abaya said.

He pointed out that though the Chinese-funded North Rail has been discontinued, there is still a need to build a high-speed rail system to Clark if plans to transfer the international airport to the former American airbase in Angeles City push through.