WHAT WENT BEFORE: NorthRail Project

The NorthRail project involves the rehabilitation of a train line connecting Metro Manila to provinces in northern Luzon.

The project, whose cost reportedly rose from an initial $503 million to about $2 billion, is considered overpriced. Sen. Franklin Drilon was once quoted to have called the project “the greatest train robbery in history.”

Allegations of overprice have hounded the project for years. In 2006, Senators Juan Ponce Enrile and Miriam Defensor-Santiago criticized the project for being overpriced. A 2005 study by the UP Law Center said the NorthRail contract had been improperly packaged as an executive agreement and was thus able 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.

In 2008, Rodolfo “Jun” Lozada, who blew the whistle on irregularities concerning the National Broadband Network deal with China’s ZTE Corp., said the ZTE deal would be done “on a loan project a la NorthRail.”

NorthRail and China National Machinery and Equipment Corp. (Group) signed the agreement to build the railway in December 2003. It has been said that former Speaker Jose de Venecia Jr. had brokered the entry of the Chinese government into the project.

In 2006, Jose Cortes, then president of NorthRail, said at a Senate hearing that De Venecia hosted meetings at his Makati City home between government officials and representatives of the Chinese Embassy to discuss the project.

Cortes said De Venecia “opened the doors” for the government to obtain funds from the Chinese government for the NorthRail and other projects.

Upon assuming office last year, the Aquino administration announced that the NorthRail contract would be reviewed by the Department of Transportation and Communications.

The 80-km railroad, a flagship program of the Arroyo administration, will link the northern flank of Metro Manila with the Diosdado Macapagal International Airport at the Clark free port in Pampanga province.

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, but government officials have said that even that revised deadline might not be met.

Presidential spokesperson Edwin Lacierda said the NorthRail project was among the issues discussed during President Aquino’s meeting with Chinese President Hu Jintao on Wednesday.

Chinese officials reportedly agreed with the proposal that it be “reconfigured.”

Source: Inquirer Archives