Tuesday, 23 February 2010

Northrail project: Manila seeks review of $500-m China loan

by Joyce Pangco Pañares
Manila Standard

The government has initiated the renegotiation of an agreement with the Export-Import Bank of China for a $500-million that will finance the Malolos-to-Clark section of the North rail project to ensure that the project adoptsPhilippine safety and engineering standards.

As this developed, President Gloria Arroyo issued Executive Order 859, transferring jurisdiction of the North Luzon Railways Corp. from the Bases Conversion Development Authority to the Department of Transportation and Communication.

Under the new set-up, Mrs. Arroyo said the department can more effectively administer the implementation of the Northrail project unlike in the past when it only exercised oversight function over the project.

Northrail Corp. president and chief operating officer Zoilo Andin Jr. was caught unaware of EO 859, but he welcomed the decision of the president to place the corporation under the transportation department.

“I have not seen a copy of the executive order but I don’t see any problem with it. The President just wants to harmonize our transportation systems,” Andin said in a phone interview.

Andin also confirmed that Chinese firm Sinomach, formerly China National Machinery and Equipment Corp. Group,” showed “positive” reaction to the government’s move to renegotiate the loan agreement for section 2 of Northrail Phase 1.

“Efforts are ongoing to renegotiate the agreement. We want to make sure that the lessons we have learned during the construction of section 1 are taken into account,” he said.

“We are in the process of design optimization with our Chinese counterparts, and we hope this will result in a more efficient implementation that is also more cost-efficient,” Andin said.

China’s Export-Import Bank has provided a $400 million loan for 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.

According to deputy presidential spokesman Gary Olivar, a renegotiated contract will entail using local safety and engineering standards if these are proved to be more stringent than Chinese laws.

Olivar said the loan amount might also have to be reviewed to see if adjustments have to be made, taking into account any escalation in project cost.

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

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