Malacañang defends North Rail project

Malacañang maintained yesterday the P26.1-billion North Rail project is aboveboard and vital to the country’s interests.

Presidential Spokesman Ignacio Bunye issued the statement as top government officials, including Vice President Noli de Castro and other senior transportation and economic heads, were summoned to appear before the Senate Committee of the Whole on Thursday to answer allegations over the controversies surrounding the North Rail contract.

"The North Rail project was done in good faith and in the national interest. This is part of the President’s urgent agenda to decongest Metro Manila. The project is on track and will be pursued to completion," Bunye said in a press briefing at the Palace.

"This very important project is one of the answers to our problems, including the terrible congestion in Metro Manila," he said.

Bunye said Malacañang would not stand in the way of the Senate inquiry even as he expressed confidence that concerned officials can easily defend the project, which was entered into by the government with China.

"We respect the procedures of a co-equal branch of government," he said.

Aside from De Castro, Transportation Secretary Leandro Mendoza, Budget Secretary Romulo Neri, former finance secretary Juanita Amatong and North Luzon Railway Corp. (NLRC) president Jose Cortez were also invited to appear.

Chinese President Hu Jintao had expressed his concern to President Arroyo over delays in the North Rail project during the two leaders’ bilateral meeting on the sidelines of the United Nations World Summit in New York earlier this month.

Mrs. Arroyo said she had assured Hu that everything was being done to finally start the project, including the immediate resettlement of some 30,000 squatter families in the areas where the railways would pass.

She said De Castro had done a great job in relocating some of the squatters.

Senate Minority Leader Aquilino Pimentel Jr. said De Castro will be asked questions pertaining only to the relocation of the residents affected by the rehabilitation of the railway, and not on contract details.

Pimentel earlier claimed the Philippines had been shortchanged in the contract with China. He accused the Chinese contractors of defrauding the government by awarding the construction of the project to the China National Machinery and Equipment Corp. (CNMEC) which would, in effect, bind the government to paying a "stiff price for slow-moving, diesel-powered trains."

"The Arroyo administration committed a monumental blunder when it awarded the contract, without public bidding, (for) the rehabilitation of the 32-kilometer rail line from Caloocan City to Malolos, Bulacan," Pimentel said in a statement.

He said a study conducted by experts showed that "the North Rail contract suffers from serious infirmities and that the government officials who had a hand in the deal could be held liable for the mistakes."

The project is reportedly the second biggest Philippine-Chinese venture. The 32.2-kilometer railway transit project was conceived to enhance the growth potential of Metro Manila and Central Luzon.

The project is expected to provide an effective transport service for passengers and goods between Metro Manila and Central Luzon, connecting with Clark, Subic and Poro Point.

The service would run on a double-track railway and would initially service six stations along Caloocan, Valenzuela, Marilao, Bocaue, Guiguinto and Malolos and a depot in Valenzuela City.

At least 30 four-car diesel multi-unit train sets will be procured for the project to be set up through the conversion into double tracks on the existing Philippine National Railway tracks.

Travel time between terminals is estimated to take 32 minutes with an expected load of at least 41,186 passengers a day.

The project’s approved total cost is P26.1 billion, P20.5 billion of which will be sourced from the Chinese supplier’s credit. The remaining P5.6 billion will be shouldered by the North Luzon Railway Corp.

In a related development, Pimentel claimed Raul Pangalanan, dean of the University of the Philippines College of Law, was removed from office because of the study that probed into the North Rail project.

"That could very well be the case because Pangalanan played a very significant role analyzing the legal implication of that contract," Pimentel said.

The Senate commissioned the UP Law Center under Pangalanan to conduct a study on the legality of the contract between NLRC and CNMEC.

Apart from Pangalanan, the other members of the 13-man team include legal experts Danilo Concepcion, Bartolome Fernandez Jr., Florin Hilbay, Solomon Lumba, Merlin Magallona, Carmelo Sison, Harry Roque Jr.; and technical experts Hussein Lidasan, engineer Rene Santiago, Primitivo Cal and Crispin Emmanuel Diaz. — With Christina Mendez