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Thursday, October 20, 2005
High court junks lawsuit v. Northrail project
MANILA -- The Supreme Court (SC) dismissed for lack of jurisdiction Wednesday a petition of residents displaced by the construction of the Northrail project in Bulacan to declare the multimillion-dollar contract as unconstitutional.
A petition for certiorari and prohibition was filed last October 11 by the League of Urban Poor for Action (Lupa)-Bulacan Chapter, represented by lawyers from the Roque and Butuyan law firm.
In an en banc resolution, the high court said the dismissal of the case does not prejudice petitioners from filing it again before the lower courts.
"A careful perusal of the petition and the attachments thereto discloses that the resolution of the issues raised requires the establishment of facts through the presentation of evidence before a trial of general jurisdiction," the SC said.
The SC, which does not tries cases, said assuming that the issues raised by petitioners were valid, it would still be the lower courts that could properly assess the facts through the presentation of evidence.
The high court also said it is important that before the court could rule on the case, it must determined whether competitive biddings were held before the contract was awarded to the China National Machinery and Equipment Corporation (CNMEC), and whether there was prior appropriation of public funds and certification of its availability by proper accounting officials.
It is equally important to present evidence that would show CNMEC is not a bona fide contractor in its home country and that it does not possess the special license required of a foreign contractor who participates in a foreign-funded project in the Philippines, the SC said.
It is also the lower court that would determine whether the proper procedure for relocation of informal settlers in the project areas was followed to prove that there indeed was grave abuse of discretion on the part of contracting parties.
Citing violations of Republic Act (RA) 9184, also known as the Government Procurement Reform Act, the petitioners had sought a writ of preliminary injunction or a temporary restraining order (TRO) from the SC seeking to nullify the contract agreement signed by the North Luzon Railways Corporation with the Chinese firm.
The petitioners also questioned the loan agreement between the Export-Import bank of China and the Philippine Government that guaranteed the US$503 million Northrail contract for the construction and modernization of the 323-kilometer double-track railway system from Caloocan City to Bulacan.
Of the US$503 million total project cost, US$107 million will be shouldered by government as a counterpart fund.
The loan was made to finance the construction of the Northrail Project Section I, Phase I. The agreement also mandated that CNMEC will act as the prime contractor for the project.
Northrail, a government-owned and controlled corporation (GOCC), employed the services of CNMEC for the construction of the railway through an agreement executed on Dec. 30, 2003.
Named respondents in the case were Executive Secretary Eduardo Ermita, Finance Secretary Margarito Teves, Budget Secretary Romulo Neri, Economic and Development Authority Secretary Augusto Santos, North Luzon Railways Corporation, and CNMEC.
Harry Roque, lead counsel for petitioners, said the contract with CNMEC was executed without competitive bidding, a violation of provisions of RA 9184.
"In particular, the Northrail contract was awarded without compliance with a competitive bidding process. It is not supported with a proper certification of availability of funds and proof of CNMEC's license to act as a contractor either," Roque said.
He further said the loan agreement does not appear to have prior concurrence of the Monetary Board, also in violation of the 1987 Constitution.
The petitioners said Section 10 of RA 9184 states that "all procurement shall be done through competitive bidding, except as provided for in Article 16 of this Act."
The law covers procurement of infrastructure projects, including "the construction, improvement, rehabilitation, demolition, repair, restoration or maintenance of roads and bridges."
"From this alone, the said contract is already illegal and void ab initio (from the start)," the petitioners said.
The petitioners noted that the claim of the government that the contract was awarded to the Chinese construction firm pursuant to a negotiated procurement is defective.
"Such an arrangement is by no means among the alternative methods of procurement enumerated under Section 48 of Republic Act 9184, which allows exceptions to the rule on public bidding," the petitioners added.
The petitioners said further that aside from being in violation of RA 9184, the contract and loan agreement also violates the Government Auditing Code, the Administrative Code of 1987, RA 4566 or the Contractor's License Law, and the Philippine Constitution.
Both the Government Auditing Code and the Administrative Code of 1987, according to the petitioners, prohibit any government agency from entering into a contract involving expenditure of public funds without appropriation and proper certification by proper accounting official which should be attached to the proposed contract. (ECV/Sunnex)
(October 19, 2005 issue)
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