Senate calls for prosecution of officials behind Northrail project
Senator Chiz Escudero. ARNOLD ALMACEN/INQUIRER file photo
MANILA, Philippines–The government is paying P9 billion for the derailed Northrail project but nobody has been charged for the fiasco, and not a kilometer of a rail has been built.
Senator Francis Escudero is demanding that the government sue officials behind the anomalous 2003 railways deal between the Arroyo administration and a Chinese company.
A flagship project of the Arroyo administration, the 80-kilometer railroad was to link Caloocan City with an international airport in the former Clark Airfield in Pampanga.
“Someone should pay. Someone should be sued and land in jail for this particular fiasco,” Escudero, finance committee chair, said Wednesday, pointing out that taxpayers have been footing the bill.
In Wednesday’s briefing on the 2015 national budget, Finance Secretary Cesar Purisima told the committee the government has been paying outstanding loans to China and a European Union country for the Northrail project.
National Treasurer Rosalia de Leon said the government has paid its $180-million sovereign loan to China Exim Bank, but has not finished paying a $50-million commercial loan.
The $230 million is equivalent to P9 billion, according to officials.
Purisima agreed with Escudero that it was scrapped because of corruption charges.
“May I know, have you charged anyone for it?” Escudero asked. “I presume that somebody should have been charged for it because the end-result was that we scrapped it.”
Purisima admitted he was not familiar with the investigation, and promised to report back to the committee.
Escudero pressed on: “You do agree Secretary that someone should pay for this. We’re paying this much for something that did not continue, and the Filipino did not benefit from.’’
Purisima said he fully agreed with the senator.
“None that I know,” Socio-economic Planning Secretary Arsenio Balisacan said when asked if the government could recover anything from the project. “When I go to the area, I see some posts.”
After the hearing, Budget Secretary Florencio Abad admitted that the government paid billions of pesos for the project, and “no single rail has been built.”
“The problem there was there’s not a kilometer of rail built,” Abad said. “We paid P9 billion for practically nothing.”
Escudero requested Purisima to report the government’s legal effort to hold accountable individuals behind the project in the next hearing on the proposed P2.606 trillion budget.
Balisacan said the government was keen on reviving the railway project under fresh terms.
When he took over in 2010, President Benigno Aquino ordered a review of the contract between NorthRail and the China National Machinery and Equipment Corp. Group (CNMEG) to build the railway.
This has been hounded by allegations of overprice, its cost rising from an initial $503 million to about $2 billion, according to reports.
A 2005 study by the UP Law Center showed that the NorthRail contract had been improperly packaged as an executive agreement to evade public bidding.
In February 2007, the Monetary Board approved a $500-million long-term loan from China Eximbank that would finance the first section of Phase I of the project.
The completion of the first phase of the project, a 42-kilometer train line that will connect Caloocan City to Malolos City in Bulacan province, was earlier moved to 2013.
In February 2012, the Supreme Court ruled that CNMEG-NorthRail agreement was not an executive agreement, and that CNMEG was not immune from suit.
It remanded to the Makati regional trial court for further hearing a case questioning the validity of the contract, and the loan agreement.
