Ex-NorthRail contractor to be paid for completed segments

CLARK FREEPORT, Pampanga, Philippines  – Budget Secretary Florencio Abad disclosed yesterday that the former Chinese contractor of the delayed North Luzon Railways Corp. (NorthRail) project would be paid for the completed segments from Caloocan City to Malolos, Bulacan.

Malacañang meanwhile has started renegotiations with the Chinese government to hold a new bidding among qualified contractors from China.

Abad told reporters here that the Aquino government would push through with the NorthRail project, which was frozen early this year amid disputes with the Chinese contractor Sinomach, which used to be known as China National Machinery and Equipment Corp. (CNMEC).

Sinomach was able to finish the construction of some 800 concrete piles that were driven into the ground to make way for the tracks over rough terrain and soft ground. These structures are part of Phase I of the project.

The total cost of the railway had already increased due to the delays from the original price tag of $403 million to $602 million on a loan from China.

Phase II is supposed to be from Malolos to the Diosdado Macapagal International Airport (DMIA) at Clark Freeport in Pampanga, where clearing of pathways and resettlement of thousands of squatter families along the railway have been completed.

Abad said Transportation Secretary Manuel Roxas II plans to continue with the project.

“It just needs renegotiation, and (Sinomach) would be paid for the finished parts,” he added.

“But the contract (with the Chinese government) would have to be reconfigured and there will again be bidding in China among different Chinese contractors,” he noted.

He said the project will still be covered by a repackaged loan from China with the Philippines providing the usual counterpart for land acquisition, land development and “horizontal development.”

The loan for Phase I was covered by an executive agreement signed by Chinese officials and former President and now Pampanga Rep. Gloria Macapagal-Arroyo in 2004.

Funds for Phase II from Malolos to Clark were not yet released by the time the project was frozen under the Aquino administration.

Angeles City Mayor Edgardo Pamintuan, former president of NorthRail who was appointed in 2009, admitted that the project started only when he assumed office and he resolved the conflicts on design and other issues with the Chinese contractor who had at one time abandoned the project.

The NorthRail project was initiated during the term of former President Fidel Ramos after he issued an executive order in 1994 declaring the Diosdado Macapagal International Airport as the “future site of the country’s premiere gateway.”

Airport officials agree that the NorthRail was a vital factor in convincing more airlines to establish regular domestic and international flights from the airport.

“The Department of Transportation and Communications (DOTC) has the biggest share from the P22.5-billion government counterpart funds for Public-Private Partnership (PPP) projects in 2012,” he said, noting that seven of the top 10 priority projects of the administration are under the DOTC.