DoTC seeks better terms for Northrail

Renegotiating the controversial Chinese-funded Northrail project will be on top of the government’s list of priorities as key Aquino administration officials leave for Beijing for an official state visit this week.

Transportation and Communications Secretary Manuel “Mar” Roxas II hopes to secure better terms for the project that has been plagued with cost overruns.

The Northrail project involves the construction of a train line that will link Metro Manila with provinces in the north.

“It’s a rare opportunity to signal at the highest levels our desire to thresh out this complex matter,” Roxas said in a text message Friday. “Having said that, it is not our intent to be unduly obstructive.”

Roxas will be among the top administration officials who will go to China this week.

The Northrail contract approved by the previous administration contained several onerous provisions, according to a review undertaken by the Department of Transportation and Communications (DoTC).

The Northrail project aims to facilitate movement of goods between Metro Manila and key areas in Central and Northern Luzon.

It is also expected to boost activity at the Diosdado Macapagal International Airport, which is being primed as the country’s next gateway.

“We still want to have a rail link northward, but not in its present configuration,” Roxas said.

The DoTC earlier said it wanted the project either scrapped or cancelled. But officials have been treading lightly due to possible diplomatic repercussions.

The project is funded by a concessional loan from the Chinese Export Import credit agency.

Total cost of the project is now estimated at $1.8 billion—up from $1.2 billion when the contract was first signed.

Last week, Chinese Ambassador Liu Jianchao urged the government to push through with its contractual obligations, stressing that the controversial train line was a “very good project.”

The Beijing government has taken a “positive and open approach” to address issues plaguing the project, mainly cost overruns, the Chinese envoy added.

Jose “Ping” de Jesus, Roxas’ predecessor, earlier noted that the project’s Chinese contractor Sinomach had asked for more money for construction, despite the project’s scale being reduced.

For instance, the first phase of the project, a 42-kilometer train line connecting Caloocan City to Malolos in Bulacan, was supposed to cost $421 million. But the figure reported has gone up to $621 million.

The deadline to complete the first phase has also been moved from 2007 to 2013—a target that is now deemed unattainable. Construction of Northrail was halted last April to make way for a review of the contract.