BEIJING, China -- Edgardo Pamintuan, president of the North Luzon Railways Corp., and his counterpart will iron out the kinks in the multibillion-peso Chinese-funded North Rail project, which has been suspended over cost overruns and other issues, Trade Secretary Peter Favila told reporters here Thursday night.
Pamintuan had announced the suspension of the controversial 80-kilometer railroad, flagship program of the Arroyo administration, linking the northern flank of Metro Manila with the Diosdado Macapagal International Airport at Clark in Pampanga. China lent $400 million for the first 64.4-kilometer segment of the railway -- from Caloocan City to Bulacan.
The NLRC chief said the China National Machinery and Equipment Corp. Group (CNMEG) backed off the project in February and has reportedly threatened to take legal action against the government for its failure to pay a cost overrun of $299 million and rectify "significant variations" in the project.
Immediately after Pamintuan's announcement, Chinese embassy officials said the Chinese government remained committed to the project that opposition leader Franklin Drilon called the most expensive railway project in the world.
Favila said he and his Chinese counterpart would tackle the North Rail only if the problem would not be resolved at Pamintuan's level.
He said ministerial discussions would center on expanding trade between China and the Philippines.
"If there's a need for intervention at the higher level, then the leaders would come in. But I don't think it will come to that," he said.
President Gloria Macapagal-Arroyo and East Timor President Jose Ramos Horta are the only two heads of state that Chinese President Hu Jintao are meeting for bilateral discussions during the opening of the 29th Olympics here.
At the same time, Favila said the Philippine delegation had discussions with officials of six publicly listed Chinese companies for possible investments in the Philippines. He said among the six companies was a power company that could supply mobile mini-hydro generators that supply 1,000 kilowatts to 3 megawatts of power.
"The President asked them about mobile generators which we could be used by our local government units," the trade secretary said.
The other Chinese businessmen were involved in tourism, paper manufacturing, and sock manufacturing.
"They have very interesting proposals but since they are publicly listed, I cannot disclose [their identities] until their own disclosure to their stock holders," Favila said.
The trade secretary said this robust exchange would show that Philippine-China relations have moved on even after the $329-million national broadband network agreement with China's ZTE Corp. was cancelled.
"The Chinese are very polite people. They respect the events back home and they understand that. They know how to put things behind them and look at where we are today and move forward," he said.
