Northrail project up for NEDA-ICC approval soon

Mick Basa

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Northrail project up for NEDA-ICC approval soon
The government has paid $180M to settle a portion of the loan for the project even if it had been dropped due to lingering legal issues

MANILA, Philippines – A railway project meant to connect Manila to the Clark International Airport that the government recently revived despite lingering legal issues is up for NEDA-Investment Coordination Committee (ICC) approval soon.

During the 2015 budget briefing at the Senate, National Economic and Development Authority (NEDA) Director-General Arsenio Balisacan said the 80-kilometer Northrail project would resume within the term of President Benigno Aquino III. (READ: PH renegotiates Northrail loan with China)

“It has been presented by the technical working group of the NEDA-ICC. It will be presented hopefully within the next ICC meeting before it reaches the NEDA board,” Balisacan told reporters on the sidelines of the 2015 budget hearing, Wednesday, August 20.

The railway project was contracted out by the Arroyo administration in 2003 to China National Machinery and Equipment Corporation (CNMEC) for an original cost of $421 million. In 2009, CNMEC increased the contract price to $593 million, with the government agreeing to shoulder the difference.

The project was said to be crucial in the previous plan of government to transfer air traffic from the congested Ninoy Aquino International Airport (NAIA) in Manila to the Clark airport.

The government obtained a $400-million loan from China’s Exim Bank to fund the project, and sourced the rest of the capital requirement from the Development Bank of the Philippines.

At the hearing, National Treasurer Rosalia de Leon said the government has already shelled out $180 million to settle a portion of the loan from Exim Bank, on top of another $50 million loan.

Who’s accountable for botched project?

In 2011, the Aquino administration scrapped the project on lingering legal issues and corruption allegations.

But the administration apparently changed its mind, as “it’s already in a relatively advanced stages of discussion,” said Balisacan.

Escudero, chair of the Senate Committee on Finance, asked members of the Development Budget Coordinating Council (DBCC) if anyone had been charged for the “scuttled” railway project.

“Someone should be in jail. We paid the loan but the project does not exist,” Escudero told reporters after the hearing Wednesday morning.

Escudero has directed Finance Secretary Cesar Purisima to update the committee on its efforts to hold accountable those who are involved in the project.

Purisima previously explained that the country had an obligation to pay China Exim a little over $180 million in 4 tranches, every 6 months starting September 2012 as non-payment of the loan could have an “adverse impact” on the country’s credit ratings.

Meanwhile, Balisacan said funding for the relaunch of the railway project would be the concern of the Department of Finance.

“It can be a GIA (grant in aid) or soft loan like Japan International Cooperation Agency and World Bank, whatever would give us the least cost of building that infrastructure,” he said.  –



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