UP Law Center: North Rail contract illegal

[mantoy]

another controversy in this Arroyo government. tsk tsk...

UP Law Center: North Rail contract illegal

By EFREN L. DANAO, The Manila Times Senior Reporter

The UP Law Center has declared illegal and disadvantageous to the government the contract between the North Luzon Railways Corp. (NLRC) and a Chinese company to build the 32-kilometer $503-million North Rail project from Caloocan City to Malolos, Bulacan.

In a 28-page opinion on the legal, economic, financial and technical aspects of the contract, the UP Law Center recommended the annulment of the NLRC contract with the China National Machinery and Equipment Corp. (CNMEC) and the filing of criminal, civil and administrative charges against all persons who signed the contract.

Among the reasons cited by the center in arriving at its conclusions were:

1. The absence of public bidding even if the exceptions on competitive bidding contained under Republic Act 9184 were absent.

2. The contract cannot be viewed as a treaty or executive agreement whether seen from the perspective of international or Philippine law.

3. The contract failed to comply with the Government Auditing Code and the Administrative Code of 1987, because the government’s counterpart fund is not supported by a certification on the availability of funds.

On the economic, financial and technical aspects of the North Rail project, the center said the CNMEC is not technically qualified to be a prime contractor, because it has done no railway project of similar magnitude in China or elsewhere in the world.

"Neither is it engaged in the manufacture of the railroad equipment contemplated in the contract," it added.

The document also pointed out that the contract is silent on the specifications of the train equipment that is being produced.

"Neither is there a standard warranty that the equipment to be supplied will be brand-new. Chinese engineering standards will be made to apply, completely ignoring accepted standards applicable to Philippine infrastructure projects," it said.

It doubted whether the $503-million contract price for the 32-kilometer project is the best value for money that the Philippines could have secured, nor could it be considered the "cheapest per kilometer of rail" as claimed by project proponents.

Of the total project cost, $421 million would be provided by a loan from the Export-Import Bank of China and the remaining $82 million from the government’s counterpart fund. The government will bear the budget for relocating the squatters.

The "confidential" study of the UP Law Center came out just two days before the Senate constitutes itself into the seldom-used committee of the whole to investigate the North Rail project.

The hearing on Thursday will be only the tenth since 1987 that the Senate has been constituted into a committee of the whole to inquire into a controversial issue. The last time was early this year, when the Senate acceded to the demand of Sen. Jamby Madrigal to assure the approval of the budget of the Department of Environment and Natural Resources.

Senate President Franklin Drilon, who will preside over the hearing, has invited former Finance Secretary Juanita Amatong, former Foreign Affairs Secretary Delia Albert and officials of the NLRC and the Bases Conversion Development Authority.

"We will not invite the Vice-President, because his office was not involved in the loan agreement with the Export-Import Bank of China," Drilon said.

He said that the Housing and Urban Development Coordinating Council, headed by Vice-President Noli de Castro, received no funds from the Chinese bank to relocate squatters along the railway.

The Thursday inquiry is an offshoot of a privileged speech by Sen. Juan Ponce Enrile on February 14 which raised some questions about the contract with the Chinese company.

Enrile also wanted the Senate to investigate the role of a certain William Go in the project. He said that Go, a Hong Kong businessman, is not a government employee of China, nor is he connected with the Philippine government. He said that it was Go who nominated the Chinese company to undertake the construction work.

[mrpink]

hay .. doon sa nabasa ko na column ni max soliven .. ganyan din yung sinabi nila sa MRT dati .. overpriced .. ayun na delay yung construction .. tapos when finally na-approve yung construction .. it cost 4x the original budget na ..

[falken]

hay .. doon sa nabasa ko na column ni max soliven .. ganyan din yung sinabi nila sa MRT dati .. overpriced .. ayun na delay yung construction .. tapos when finally na-approve yung construction .. it cost 4x the original budget na ..

Dito naman kasi sa atin, mga buwitre pag hindi napartehan kung ano anong panghaharang ang gagawin, kaya pag approved na sa wakas ang project mas mataas na ang presyo.

[j_avonni]

Lahat yata ng contracts puro illegal.

[JohnM]

Correct me if I'm wrong:

Walang problema dun sa loan na approved by two Chinese Presidents. Walang problema sa squatter relocation. Ang problema ay nasa contractor na pinili for the rolling stock and the construction tama ba?

[RedHorse]

anong hindi illegal?

- lahat ng legal dispute sa chinese court babagsak

- chinese construction standard ang gagamitin

[timrev]

North Rail case goes to Hong Kong
North Rail case goes to Hong Kong | ABS-CBN News

MANILA, Philippines - The Philippines has identified its arbitrator for the botched North Railway project initiated by the Arroyo administration in 2004 but which was stopped due to alleged anomalies.

“We are now winding down and (there is) the clear provision in the contract. We will enter arbitration,” Transportation Secretary Joseph Emilio Abaya said in an interview at the Senate budget hearing yesterday.

Abaya said the Philippines has hired legal consultants and the arbitration will take place in Hong Kong.

Abaya said the Chinese claim the Philippines owed them, but “we believe it’s them who owed us.”

“So the arbitration will happen in Hong Kong. We have hired our legal consultants. We are choosing our arbitrators and the process will continue from there,” the new head of the Department of Transportation and Communications (DOTC) said.

According to Abaya, the Philippines and the Chinese government have agreed to subject the North Rail project to arbitration to determine whether the country should be paying the $500-million loan obtained for the botched railway project.

He said the arbitration would also determine how much should be paid and to whom certain amounts should be paid in relation to the botched project.