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MANILA - The Chinese government has fined the Aquino administration nearly a million dollars since 2010 because of delays in the implementation of the North Rail Project, according to the National Economic and Development Authority.
Data from NEDA showed that the commitment fees the Philippines paid reached $0.569 million in 2010 and $0.247 million last year.
The Chinese government provided a loan for the $400 million project, which would run from Caloocan City to Malolos, Bulacan.
Commitment fees are levied on the undisbursed loan amount or a portion thereof and are payable per annum.
In his 3rd State of the Nation Address on Monday, President Benigno Aquino III described the North Rail contract as "an expensive project that became even more expensive after renegotiation."
"Ironically, the higher cost came with fewer public benefits; a fleet of 19 train sets was reduced to three, and the number of stations, from five to two. To make matters worse, the debts incurred from the project are now being called in," the President said.
NEDA said the North Rail Project has been suspended for over a year because of unresolved issues pertaining to the construction contract and its delivery. The North Rail is one of the Arroyo administration projects that Aquino ordered suspended because of irregularities.
According to a memo the Office of the President issued to the Department of Foreign Affairs on December 19, 2011, Manila and Beijing "will create a whole new project that incorporates several elements of the existing project, but will be an entirely new project" that "requires a new feasibility study that calls for a new round of ICC approval process."
As of last year, overall project accomplishment stood at 22.94 percent, behind schedule by 62.66 percent. The disbursement rate stood at 6.16 percent, thus the commitment fees the Philippine government has been paying over the last two years.
The project aims to provide an efficient transport service for passengers and goods between Metro Manila and Central and Northern Luzon, thus helping decongest the National Capital Region.
The project involves the rehabilitation and conversion of the state-owned Philippine National Railway's Main Line North from Caloocan to Clark into a double standard gauge track. Other project components are the construction of stations; land acquisition and utilities diversion; and procurement of rolling stock with signaling system.
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