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News Top Stories Northrail Construction Begins Despite Legal Questions
News Top Stories Northrail Construction Begins Despite Legal Questions
| Northrail Construction Begins Despite Legal Questions |
| Thursday, 21 February 2008 20:15 | ||||||
|
Despite legal impediments, construction of the Northrail's 32.3-kilometer phase 1 is quietly pushing through. In a telephone interview, Northrail Corporation's president Arsenio Bartolome III said design and civil works started in October 2007. Bartolome also said they have already drawn about $50 million from the $503-million loan with the Chinese Export and Import Bank. At the site, existing utilities, like water pipes, electrical posts and telephone lines have been diverted. He confirmed that relocation of the residents is "100 percent complete."
When asked why construction has started despite legal hurdles, Bartolome told abs-cbnnews.com/Newbreak, "I don't know of any legal cases." Bartolome assumed office in late 2007, after his predecessor, Jose Cortes Jr., passed away. The Northrail project refers to the rehabilitation of the old Philippine National Railway's north line: an estimated 80.2-kilometer rail road project from Caloocan City in Metro Manila to Clark in Pampanga. It seems odd that Bartolome is unaware of the legal cases, since according to Harry Roque, lawyer for the displaced residents, the corporate lawyers of Northrail had just filed a motion for reconsideration early this month. The trial court previously dismissed Northrail's motion to dismiss the case. However, there is no restraining order to stop the construction. Roque warns that, "If they [Northrail Corporation] proceed with construction, they become builders in bad faith. They [CNMEC] cannot recover any compensation if later on it is proven that the contract is null and void." The Chinese-funded portion of Northrail seemed to have been a supply-driven project since the designation of state-owned China National Machinery and Equipment Corporation (CNMEC) was a precondition for the grant of the loan from China's Export and Import Bank. Complete by 2010? The Northrail project is part of President Arroyo's flagship Strong Republic Transport System designed to provide a fast and reliable mass transport service for passengers and goods between Metro Manila and the Central and Northern Luzon provinces, spurring growth and development. With the construction underway, Bartolome said they hope to complete the rail connection to Malolos by 2010. President Arroyo completes her term that year. Tourism and aviation industry players are particularly keen on the second section of the 80-kilometer railway—from Malolos to Clark in Pampanga—since there are plans to make Clark an alternative hub for international flights. The railway will cut traveling time between Manila and Clark from one hour to just about 30 minutes. Bartolome said they expect to begin construction of this section by end of 2008, and complete it also by 2010, or at the latest, early 2011. The second phase of the Northrail project is to connect San Fernando City in La Union to Clark. The entire railway stretch from Caloocan to La Union has been abandoned for more than 30 years. Executive Agreement with China Northrail's phase 1 section 1 (see graphics) initially became controversial because of the logistical and sociological nightmare of relocating about 40,000 families that have illegally settled near the rail tracks. There were also questions on the technical details, like the choice of narrow-gauge railway. Further analysis of the contract details showed that besides the clearing, relocation and resettlement expenses not being included in the project's $503- million cost, how the deal itself was crafted proved to be questionable. For example, the contract was under an executive agreement between the Philippine government, through the Bases Conversion Development Authority, and the Chinese government. In addition, there was no "certificate of availability of funds" signed by the Monetary Board and the budget department. This certificate, which should have needed the approval of the legislative bodies, was a requirement to ensure that the Philippine government will be setting aside funds for the annual amortization payments to pay off the loan that financed the projects. In the case of Northrail, China's Export and Import bank provided the loan signed in 2006. Northrail's lack of a certificate is one of the bases for a preliminary decision last year by the Makati Regional Trial Court that could lead to the nullification of the contract. Also, without a certificate that would complete all the requirements for a government-to-government deal, the Northrail's phase 1 section 1 project should have not been exempt from public bidding. Southrail On Track Meantime, the southern regions are not to be left behind. A planned 542-kilometer stretch from Calamba to Matnog in Sorsogon is due for rehabilitation and new construction. Called the Southrail project, it will be implemented in two phases: Phase 1 would cover the rehabilitation and reconstruction of the existing 423-kilometer railway line from Calamba to Legazpi City, while Phase 3 would involve the construction of a new 135-kilometer railway from Legazpi to Sorsogon. Like Northrail, the Southrail project is also a government project, which the Chinese government will be funding. National Economic and Development Authority (Neda) and China's Ministry of Commerce signed a memorandum of understanding for the Southrail project in July 2007. Construction for phase 1a, which costs $314-million and covers 74 kilometers Caloocan to Alabang (see graphics), is underway. Building the rail project in phases is a way to deliberately build up traffic and economic activity, says Ruben Reinoso, deputy director general at Neda "We have traffic projections for the entire stretch. But we wanted to spur economic activity in the succeeding phases as we start the first one. That way, we let the things build up first so we have higher potential to achieve our projections for traffic, economic activity, and movement of goods and people." Linking Northrail, which starts in Caloocan, and the Southrail, which commences at Calamba station, is the 70-kilometer Commuter rail (see graphics). Koreans are financing it. Already heavily traveled, the reconstruction of the existing railway has been a priority. It will service commuters from the Southern outskirts of Metro Manila who prefer to take a one-hour train ride to go home everyday instead of renting a place in the metropolis. "The train can carry more passengers than a bus. So given that the South Luzon expressway is already congested, there was a need to build a high capacity transport," Reinoso explained. Neda’s Role The rail projects gained the spotlight in the past weeks after Rodolfo “Jun” Lozada told the Senate hearing that the Southrail project was overpriced by about $70 million. He explained that there was not much fuss about it before because the overprice is within his and former economic planning secretary Romulo Neri's "permissible zone." The $70 million is equivalent to only about 22 percent of the project cost of phase 1a. Reinoso told abs-cbnnews.com/Newsbreak that Neda is not aware of the alleged briberies. "We have already implemented several rail projects. It is easy to compare the components—how much are the rails per metric ton, the ballasts, etc. The information is available. We benchmark the prices against previous rail projects, and we found the prices [of Southrail] reasonable." Neda, the secretariat or the agency that provides technical support to the Neda Board that eventually rules on development projects, has been criticized by academicians and senators for being virtually powerless in overseeing the specific project contracts. At the Senate hearing last year, Neri said Neda just approves the project's substance, not the contracts. Neri and Lozada But Reinoso is adamant about his agency's role. "Neda's role is plain and simple, just to see if the project is viable and if it is consistent with the objectives under our medium term [development plan]. We don't negotiate the price or choose who will be the supplier. Those are the tasks of the proponent agency."
Reinoso admitted, however, that while rail projects are easier to validate and do a feasibility study on, there are highly complex projects, like the broadband project, which they find difficult to validate since they don't have the resources to double check the prices. This becomes even more pronounced for projects that are not awarded through competitive bidding. "Our problem is when the contentious issues become too technical, and there's a deadlock in the discussions between the proponent agency and Neda, at the end of the day Neda will defer to the agency. Why? Because we don't have a counter argument. Neda cannot afford to hire an expert consultant who can tell us if the prices are really correct." Reinoso said this explains why Neri must have depended on his friend, Lozada. "My staff who reviewed the broadband project has an electronics and communications engineer, one has a PhD degree and another with two masters degrees," explains Reinoso. "But they are development planners who know the technical aspects. The input from a real practitioner is still important. Lozada is a practitioner. He worked with IBM and Alcatel."
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Comments (1)
  written by maynard corpuz, April 10, 2008
if the railway going north is to be elevated, i hope they'll consider utilizing the ground level for use by jeepneys and buses esp. those plying mc arthur hi-way. Jeepney and bus drivers in that stretch are so undisciplined and i think they must be restricted to use mc arthur hi-way anymore.
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