Escudero tells DBM: Run after those responsible for NorthRail fiasco

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Thursday, August 21, 2014


SENATOR Francis Escudero wants the government to run after those responsible for the botched North Rail project, which has already cost the government a total of $180 million on top of the $50 million in outstanding loan or a total of P9 billion.

In last Wednesday's 2015 budget briefing of the Senate committee on finance, which Escudero chairs, he asked members of the Development Budget Coordinating Council (DBCC) if anyone had been charged for the scuttled railways project.

"I presumed it was scrapped because of the corruption allegations associated with it. But do you agree, Secretary, that someone should pay for this? We are paying so much for something we did not continue, that the Filipino people did not benefit from," Escudero asked Finance Secretary Cesar Purisima. "Someone should pay for it, someone should go to jail and land in jail for this particular fiasco. The taxpayers are the ones paying this now," he added.

"I fully agree, Mr. Chair. I will have to get back to you on that; I am not familiar on the latest on the investigation of the NorthRail. All I’m familiar with is the financial aspect of NorthRail," Purisima said.

National Treasurer Rosalia de Leon told the finance committee that the government had paid part of its sovereign obligation to China Exim Bank amounting to about $180 million. "But we still have an outstanding obligation. The commercial component to parties is about $50 million," she admitted to senators.

The NorthRail project, an 80-kilometer railroad that would link Caloocan with Clark in Pampanga, was contracted out by the Arroyo administration in 2003 to the China National Machinery and Equipment Corporation (CNMEC) for an original contract cost of $421 million. The flagship project was funded by a government loan of $400 million from China’s Exim Bank and the balance to be sourced from the Development Bank of the Philippines.

In 2009, CNMEC increased the contract price to $593 million, with the government agreeing to shoulder the cost of the variation.

The Aquino administration, however, scrapped the project in 2011 after legal questions and allegations of corruption hounded the project.

"What did we get out of this, if any? We didn’t get anything out of it, anything usable, nothing. Despite the extravaganza of corruption and wasted taxpayers money no one is in jail yet. With this money, P9 billion, someone should be hauled to jail," Escudero said.

The senator directed Purisima to submit during the budget hearing of the Department of Finance all updates on the legal efforts to hold accountable those responsible for the fiasco.

The controversial North Rail project, started during the Arroyo administration, is a train line envisioned to shift some of the air traffic in Manila to the Clark airport, which was scrapped and was intended to be rebidded out.

The $1.2 billion project was supposed to be financed by a loan from the Chinese Export Import Credit Agency.

The Supreme Court reportedly found the contract to be anomalous as it failed to follow the Procurement Law.

In the middle of the territorial disputes over the Scarborough (Panatag) Shoal, China decided to "call" or "make due and demandable" the official development assistance that it lent the Philippines for the NorthRail project. (Camille P. Balagtas/Sunnex)

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