Chiz: Gov’t still paying for botched NorthRail project

MANILA, Philippines - Sen. Francis Escudero has expressed the need for the government to run after those responsible for the botched NorthRail project, which has already cost the government $180 million on top of the $50 million in outstanding loan.

He lamented the billions being spent by the government for a project which did not push due to allegations of bribery and corruption in the past.

The senator noted in last Wednesday’s 2015 budget briefing of the Senate committee on finance that the payments for the loans have ballooned to P9 billion.

Escudero, committee chairman, learned about the updates during the briefing of the Development Budget Coordinating Council (DBCC). He also found out that nobody has been made accountable for the anomalous railways project.

“I presumed it was scrapped because of the corruption allegations associated with it. But do you agree, (Finance) Secretary (Cesar Purisima), that someone should pay for this? We are paying so much for something we did not continue, that the Filipino people did not benefit from,” Escudero said.

“Someone should pay for it, someone should go to jail and land in jail for this particular fiasco. The taxpayers are the ones paying this now,” the senator added.

Purisima said he shared Escudero’s thoughts but he is privy only to the losses and not the other aspects of the case.

“I fully agree, Mr. Chair. I will have to get back to you on that. I am not familiar on the latest on the investigation of the NorthRail. All I’m familiar with is the financial aspect of NorthRail,” Purisima admitted.

The NorthRail project, an 80-kilometer railroad that would link Caloocan with Clark in Pampanga, was contracted out by the Arroyo administration in 2003 to the China National Machinery and Equipment Corp. (CNMEC) for an original contract cost of $421 million.

The flagship project was funded by a government loan of $400 million from China’s Exim Bank and the balance to be sourced from the Development Bank of the Philippines.

In 2009, CNMEC increased the contract price to $593 million, with the government agreeing to shoulder the cost of the variation.

The Aquino administration, however, scrapped the project in 2011 after legal questions and allegations of corruption hounded the project.

National Treasurer Rosalia de Leon has informed the finance committee that the government paid part of its sovereign obligation to China Exim Bank amounting to about $180 million. “But we still have an outstanding obligation. The commercial component to parties is about $50 million.”