Monday, 12 January 2009

Philippine NorthRail project set to resume

Paolo Romero
The Philippine Star
http://www.philstar.com/Article.aspx?ArticleId=431092&publicationSubCategoryId=63

After months-long delays due to cost and design issues, the construction of the $503-million NorthRail project is expected to resume this month after the Filipino and Chinese parties to the venture finally resolved their differences, officials said.

North Luzon Railways Corp. president Edgardo Pamintuan said a team of Filipino engineers met with their counterparts in China National Machinery and Equipment Corp. (CNMEC) in December.

He said both sides resolved their differences on engineering and design of the 80-kilometer project spanning from Caloocan City to Clark Freeport in Pampanga.

CNMEC is the main contractor of the project funded by a soft loan from the Chinese government. The project is expected to reduce travel time from Caloocan to Clark by about two hours.

Work on the NorthRail project, which has been the subject of congressional investigations, was suspended last July over disagreements on engineering designs and cost overruns.

CNMEC said last year it could not continue with the project due to rapid escalation of cost of materials.

“Finally, we are going to resume construction. Before, we could not see eye-to-eye but now we have agreed on a final design,” Pamintuan said.

On the issue of increased costs, Pamintuan said he has proposed to President Arroyo, as chairman of the National Economic and Development Authority Board and Investment Coordination Committee, to seek $300-million funding for the additional expenses.

Pamintuan said CNMEC has agreed to resume construction even if the payment for the additional costs remains uncertain.

It was reported that the increased costs were due to foreign exchange losses, inflation and design changes from the original contract.

The firm also agreed to push through with the construction for Section 1 (Caloocan to Malolos) and Section 2 (Malolos to Clark) of the project even as the 18,000 families living along the route are still being relocated.

The Chinese contractor had wanted to pursue construction once the area is fully cleared of settlers to enable them to work quickly, but “they (CNMEC) agreed to do segmental or even simultaneous work as we relocate the families,” Pamintuan said.

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