North Rail case goes to HK

MANILA, Philippines - The Philippines has identified its arbitrator for the botched North Railway project initiated by the Arroyo administration in 2004 but which was stopped due to alleged anomalies.

“We are now winding down and (there is) the clear provision in the contract. We will enter arbitration,” Transportation Secretary Joseph Emilio Abaya said in an interview at the Senate budget hearing yesterday.

Abaya said the Philippines has hired legal consultants and the arbitration will take place in Hong Kong.

Abaya said the Chinese claim the Philippines owed them, but “we believe it’s them who owed us.”

“So the arbitration will happen in Hong Kong. We have hired our legal consultants. We are choosing our arbitrators and the process will continue from there,” the new head of the Department of Transportation and Communications (DOTC) said.

According to Abaya, the Philippines and the Chinese government have agreed to subject the North Rail project to arbitration to determine whether the country should be paying the $500-million loan obtained for the botched railway project.

He said the arbitration would also determine how much should be paid and to whom certain amounts should be paid in relation to the botched project.