By Angie M. Rosales
10/21/2008 [ tribune.net.ph ]
An opposition senator yesterday condemned the reported $299-million additional funding being demanded by the Chinese contractor commissioned for the construction of the controversial North Luzon Railway (Northrail) project, saying such is unacceptable.
“What the Chinese contractor is demanding in terms of additional funding is too onerous. They have not yet even installed any part of the railway, but they are already asking for extra funding,” Senate Minority Leader Aquilino “Nene” Pimentel Jr. stressed.
The lawmaker was reacting to reports that acting North Rail Corp. (NRC) chairman and chief executive officer Edgardo Pamintuan has recommended to Malacañang to allow the China National Machinery and Equipment Corp. (CNMEC) to charge to the government the additional amount despite the fact that the original $503-million cost of the project is widely considered overpriced.
“The Northrail Project had already been billed as the costliest railway on a per kilometer basis to be built in the country. But if the government will agree to shell out $299 million more, that will perhaps make it the costliest railway in the world – a very unflattering description for our cash-strapped government and poverty-stricken country” he noted.
Pimentel cited the observation of transportation experts that what the cost of the Northrail that CNMEC is charging the Philippine government is double the asking price of Korean firms for such railway system.
The senator could not help but raise suspicions over the assumption of defeated senatorial candidate, former Presidential Chief of Staff Michael Defensor as chairman of the Philippine National Railways.
He said it is not coincidence that the appointment came while the government is considering the demand of the CNMEC for an additional $299-million funding for the Northrail project.
Pimentel added the additional $299 million for the first phase of the project, from Caloocan City in Metro Manila to Malolos City in Bulacan province, would be too difficult to justify given the fact that actual construction of the Northrail has not even began despite the infusion of an initial amount of $500 million for the project.
He said in all likelihood, Defensor will do a lot of trouble-shooting to get the Northrail project moving.
Pimentel recalled that Defensor earlier headed a Malacañang Task Force on the Ninoy Aquino International Airport-Terminal 3 but quit just as the new airport was about to open.
CNMEC is seeking the additional project cost to cover the first phase of the Northrail project, a 32-km stretch from Caloocan City to Malolos City.
According to Pamintuan, the CNMEC has justified the supplemental funding to cover “extraordinary inflation, currency exchange and variation cost.”
The North Railway has been redesigned so that it will now be run by electricity instead of diesel-fueled engine.
Pimentel said the shift to electricity-run trains has further validated the allegation that the Arroyo administration erred in awarding the project to CNMEC without clear-cut project specifications, without any feasibility study and without the benefit of public bidding.
The Northrail project is funded by a $400-million loan from China’s Export-Import Bank and a Philippine government counterpart of $100 million. Reports said the CNMEC has already received $105 million for the project.
The much-delayed project, which was started in 2005, was further derailed when CNMEG workers abandoned the project site last February in the absence of any formal notice by the Chinese engineering firm to the Philippine government.
Pimentel asked the Palace for an explanation on why it has disregarded the recommendation of Pamintuan’s immediate predecessor, Arsenio Bartolome III, for the termination of the contract with the CNMEC after it unilaterally suspended the construction work on the railway project and demanded $299 million in additional cost.
Bartolome, who resigned as NRC last June sent his recommendation in a letter to President Arroyo on April 24.
