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New railway to link Manila, Clark

PH, China starting P150-billion PNR North 2 project after settling Northrail contract feud
/ 05:19 AM November 08, 2017
Clark International Airport in Pampanga province will soon be connected to Metro Manila by a modern railway that is also aimed at easing traffic. —TONETTE T. OREJAS

Clark International Airport in Pampanga province will soon be connected to Metro Manila by a modern railway that is also aimed at easing traffic. —TONETTE T. OREJAS

CLARK FREEPORT — The Philippine government and China National Machinery Industry Corp. (Sinomach) are building
a new railway system from Manila to Clark International Airport here after the two parties have resolved to end court and arbitration cases over the Northrail project, Transportation Secretary Arthur Tugade said on Tuesday.

“There is no more Northrail project. There will be [a new] rail project from Tutuban (Divisoria in Manila), the City of Malolos (Bulacan) and Clark (Pampanga),” Tugade told the Inquirer by telephone from Panglao, Bohol province, where he observed the runway test of a new airport there.

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The new project is named the Philippine National Railways (PNR) North 2 and initially costs P150 billion.

“The PNR Manila to Clark railway project is expected to serve as a catalyst to decongesting Metro Manila, and at the same time bring growth to the regions north of the capital, particularly Central Luzon, where an estimated 11.22 million Filipinos reside and earn their living,” the Department of Transportation (DOTr) said in a statement.

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At the earliest, Tugade said the new project could be started by the end of 2017 or in the first quarter of 2018 with Sinomach as contractor.

The previous Northrail contract covered 80 kilometers along the old PNR tracks between Caloocan and Malolos cities. Northrail was conceptualized during the term of former President Fidel Ramos in the 1990s.

Sinomach filed for arbitration in Hong Kong when the administration of former President Benigno Aquino III terminated the contract over questions about its validity.

“Sinomach agreed to settle to show its trust to President Duterte and his administration. It’s also its way of supporting the government with its projects,” Tugade said.

The settlement, which had the approval of the Commission on Audit, was reached after more than a decade of delay in the project’s implementation and five years of what Tugade described as “costly arbitration.”

“The Duterte administration has finally achieved closure on the Northrail project fiasco,” he said.

According to Tugade, negotiations to settle the dispute started in January and ended in a settlement agreement, stating that “all court and arbitration cases will be settled and dismissed at no cost to the Philippine government.”

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The government has yet to make public a copy of the settlement agreement which, Tugade said, spared the country from paying more than P5 billion in potential damage to Sinomach and almost P500 million in legal costs.

The signing of the agreement was witnessed by Foreign Secretary Alan Peter Cayetano and Chinese Ambassador Zhao Jianhua. Also present during the signing were Executive Secretary Salvador Medialdea and Budget Secretary Benjamin Diokno.

The state-owned North Luzon Railways Corp., which oversaw the scuttled Northrail project, reported spending P161 million in arbitration proceedings as of March.

The DOTr said the Duterte administration would “still go after the government officials involved in the allegedly anomalous and/or overpriced contracts.”

The terms in the agreement include “no more payment by Northrail to Sinomach and vice versa.”

“There will be no more contractual issues that may hamper or compromise the development of the DOTr-PNR Manila to Clark Railway project,” DOTr said. —WITH A REPORT FROM MIGUEL CAMUS

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TAGS: Arthur Tugade, China National Machinery Industry Corp, Department of Transportation, DoTr, Manila-Clark railway, ‎Philippine National Railways, PNR North 2, SINOMACH
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