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China hopes for resumption of Philippine Northrail project

(Xinhua)
Updated: 2009-11-10 21:50

MANILA: China's ambassador to the Philippines said on Tuesday that the prolonged delay in the construction of the controversial US$503-million Northrail project will cost the Philippine government and the Chinese contractor more money.

The Northrail project aims to rehabilitate the old Philippine National Railway's north line, an estimated 80.2-kilometer railroad project that will link Metro Manila to Clark Field in Pampanga.

Related readings:  Eximbank to lend US$400m for Philippines' Northrail project

"We really very much like to see the construction will move and the project will be finished as soon as possible, because the longer it takes, the more cost it will take," Chinese Ambassador Liu Jianchao told a media forum in Manila. "I want to see smooth development of the project."

The Chinese ambassador stressed the importance of the immediate resumption of the construction, saying the immediate completion of the North Rail will be very good for the Philippines and the people living in Metro Manila as it would ease the capital's traffic woes.

He also said that China will not abandon the project amid questions on its legalities.

Liu also defended the Chinese contractor of the project, the China National Machinery and Equipment Corp. Group (CNMEG), saying it has a very good track record in terms of developing the most advanced railway systems in China.

"They are a very strong company in China and the best railway contractor in China. They have the expertise and the know-how," Liu said.

The Philippine government can not proceed with the construction of the railway due to a pending case in the Supreme Court, seeking for the annulment of the multi-million dollar contract.

Philippine President Gloria Macapagal Arroyo signed a memorandum of agreement between the North Luzon Railways Corp and the CNMEG during her December 2003 state visit to China.

On February 26, 2004 a buyer credit loan agreement was made between the Export-Import Bank of China and the government, to fund the Northrail project. The bank agreed to lend US$400 million of the total $503 million, with the remainder to be funded by the government.