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NorthRail project to cost $280 million more

abs-cbnNEWS.com | 11/19/2008 4:19 PM

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An additional funding of $280 million is needed for the proposed changes in the design of the phase 1 of the controversial NorthRail project.

Documents submitted to the National Economic and Development Authority showed that the increase in the project cost stemmed from the decision of the North Luzon Railways Corp. and its contractor, China National Machinery and Equipment Corp. (CNMEC), to build standard tracks rather than narrow-guage tracks as earlier planned.

The extra amount will be on top of the $503 million original cost of the 32.1-kilometer first segment of the NorthRail project, whose contruction came to a halt early this year due to disagreements between CNMEC and the government over engineering and construction standards. The Chinese contractor had sought for a change in the total project cost amid skyrocketing steel prices then, but the government rejected the request, forcing the firm to abandon the project.

Newly appointed NLRC president Edgardo Pamintuan was directed by President Gloria Arroyo to push for the completion of the project by 2010. But the application for a change in design is expected to further delay the project's completion.

The Northrail project refers to the rehabilitation of the old Philippine National Railway's (PNR) north line: an estimated 80.2-kilometer rail road project from Caloocan City in Metro Manila to Clark in Pampanga. The government has already relocated 20,000 families along the right of way of the PNR to pave the way for the construction of the new rail project.

The project's phase 1 will run from Caloocan to Malolos, Bulacan while phase 2, from Malolos to Clark. The second phase will be funded by another $500 million loan from China's Export and Import Bank, and $90 million from the Development Bank of the Philippines.

The Northrail project is part of Mrs. Arroyo's flagship Strong Republic Transport System designed to provide a fast and reliable mass transport service for passengers and goods between Metro Manila and the Central and Northern Luzon provinces, spurring growth and development.

With the construction underway, the hope is to complete the rail connection to Malolos by 2010, when the President completes her term.

Tourism and aviation industry players are particularly keen on the second section of the project since there are plans to make Clark an alternative hub for international flights. The railway will cut traveling time between Manila and Clark from one hour to just about 30 minutes.