Group calls for temporary suspension of NorthRail project

MANILA, Philippines - Pending the resolution of controversies surrounding the multimillion-dollar North Luzon Railways Corp. (NorthRail), nongovernmental group Freedom from Debt Coalition (FDC) on Monday pushed for its temporary suspension. On the sidelines of a forum, FDC Vice-President Lidy Nacpil told BusinessWorld, "The very least and prudent thing [for the government] was to suspend it in view of the investigation in the Senate and the hanging questions." Last week, the Bangko Sentral ng Pilipinas signed a supplemental $90-million facility from London-based Barclays Bank Plc. to finance NorthRail’s phase 1, sections 1 and 2. Ms. Nacpil said internal investigations conducted by the consumer and advocacy group showed two major issues against NorthRail: overpricing and displacement of settlers. The FDC is also questioning the technical competence of the project’s contractor, China National Machinery and Equipment Corp. Ms. Nacpil claimed the $503-million project was overpriced by around $70 million, but the group stopped short of detailing the overpriced amount. NorthRail as well as its parent, Bases Conversion and Development Authority could not be reached for comment. No irregularities Meanwhile, Transportation Undersecretary Guiling A. Mamondiong said there are no irregularities in the supplemental funding. "If its part of the financing allowing the project to proceed... there’s nothing wrong about it," he said in a telephone interview. The 80-kilometer (km) railway system runs from Caloocan City, Metro Manila to Clark Field, Pampanga. The project’s 32-km stretch from Caloocan to Malolos involves construction of train stations in Valenzuela, Marilao, Bocaue, Guiguinto and Malolos. The remaining stretch will extend to the Diosdado Macapagal International Airport in Pampanga. The FDC also claimed the $932.037-million South Luzon Railways project or SouthRail was also overpriced by about the same amount as NorthRail’s. Again, the group did not disclose the details. The two-phase 558-km SouthRail stretches from Calamba, Laguna to Matnog, Sorsogon. — Marian Grace S. Ramos, BusinessWorld