CLARK FREEPORT, Pampanga, Philippines – The North Luzon Railways Corp. (Northrail) yesterday admitted it has suspended “contractual obligations” with a Chinese company for the Metro Manila-Clark Freeport railway project, with 70 of its employees fired effective May 1, Labor Day.
In a statement yesterday, the United Employees of Northrail (UEN) said the suspension of the contract took effect last March 28, and as repercussion, the Northrail board of directors and management issued formal notices to the 70 workers that their employment will be “suspended temporarily” starting May 1.
The move against the 70 workers, the UEN said, is under the assumption that they are holding positions directly affected by the contract’s suspension and “will no longer be necessary.”
Transportation and Communications Secretary Jose de Jesus, according to the UEN, was apparently misinformed when he was quoted as saying earlier this week that the contract between Northrail and Chinese contractor Sinomach would proceed after the DOTC had cleared the company of any anomalies in the project.
DOTC Undersecretary for Railways Glicerio Sicat was even quoted as saying that there won’t be “cancellation of contract” with the Chinese firm.
The UEN furnished The STAR a letter signed by Northrail president Conrado Tolentino and dated last April 14 formally informing the 70 employees of the “suspension of contractual obligations” with Sinomach effective March 28.
The letter, addressed individually to the 70 workers, cited Article 286 of the Labor Code as basis for their layoff effective May 1, as the project’s suspension has rendered their services unnecessary.
“We were made to understand that the main reason behind our ‘temporary layoff’ is the suspension of the contract,” the UEN said.
It noted that De Jesus was earlier also quoted as saying that only non-technical personnel would be laid off.
“It seems that the honorable secretary was misinformed. Contrary to his quoted statement, 46 out of the 70 laid-off employees or 66 percent are holding technical positions mostly from the Project Management Office,” the UEN said.
“Only 24 came from support services. As a matter of fact, in one of the technical departments that has 21 employees only the manager was retained,” it added.
The UEN urged Northrail to withdraw its layoff order, noting that the suspension of the project was only temporary.
The suspended project comprises the $602-million Phase 1 that stretches from Caloocan City to Malolos, Bulacan.
The Chinese contractor has already finished about 800 concrete piles to serve as foundations for railway tracks from Caloocan through Balagtas, Bocaue, Guiguinto, Malolos, and Calumpit, all in Bulacan.
Phase 2 is supposed to be from Malolos to the Diosdado Macapagal International Airport at the Clark Freeport where clearing of pathway is being undertaken.
The entire project from Caloocan to Clark was initially estimated to cost $1 billion to be covered by a loan from China under an executive agreement signed by former President Gloria Macapagal-Arroyo in 2004. The cost though has risen due to delays in the project.