Wednesday, 3 February 2010

$500-m rail loan to be renegotiated

Joyce Pangco Pañares
Manila Standard

PRESIDENT Gloria Arroyo said Monday the government will renegotiate a $500-million loan agreement with the Export-Import Bank of China that will finance the Malolos-to-Clark section of the Northrail project, and to ensure that safety and engineering standards are met.

“We have the option to renegotiate the agreement instead of extending the loan agreement. It is probably better to renegotiate the terms of the agreement,” Mrs. Arroyo said.

“The project has become controversial because under the agreement, Chinese laws are upheld. If we renegotiate it, we can ensure that our own standards are used,” the President said.

China’s Export-Import Bank earlier provided a $400-million loan for the $503-million section 1 of Northrail Phase 1 that will have stations in Caloocan, Valenzuela, Bocaue, Guiguinto, and Malolos.

Section 2 will run from Malolos to the Diosdado Macapagal International Airport in Clark.

North Luzon Railways Corp. acting president Zoilo Andin Jr. said clearing operations for the railway’s section 2 had started, while the Chinese firm Sinomach, which used to be known as China National Machinery and Equipment Corp. Group, was working full blast on the railway tracks for section 1.

Deputy presidential spokesman Gary Olivar said a renegotiated contract would entail using local safety and engineering standards if these proved to be more stringent than those provided for by Chinese laws.

Olivar said the loan amount might also have to be adjusted.

The Northrail Project is expected to reduce travel time from Caloocan to Clark by an hour and 49 minutes, while the Northrail-Southrail link will make travel from Caloocan to Calamba, Laguna, shorter by an hour and 20 minutes.

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