EDITORIAL – Moving out of derailment

Eleven years after the governments of the Philippines and China broke ground for the project, construction of what was originally called the North Luzon Railway may finally get underway.

Another Philippine administration is involved and China is out of the financing. The project has been renamed the North-South Commuter Rail project and the length of the system has been extended from the original 32 kilometers to 36.7, from the Philippine National Railways main station in Tutuban, Manila to Malolos City in Bulacan. The project cost has ballooned over the years, from $421 million to $593 million.

The original project was to be financed through a concessional $400-million loan from the Export-Import Bank of China, with another $500 million for the second section up to Clark Field in Pampanga. The target date of completion was moved from 2010 to 2012. This time, it’s the Japanese government that is providing a loan package of 240 billion yen, or about $2 billion, for phase one of the construction of a narrow gauge elevated commuter railway.

Like Terminal 3 of the Ninoy Aquino International Airport, the North Rail project is a cautionary tale for companies and governments that do business with Manila. Both projects became bogged down in litigation and still unresolved allegations of corruption. Both faced policy changes from one Philippine administration to a new one.

Perhaps Japan will fare better, with its adherence to tight monitoring and other rules governing the grant and utilization of official development assistance, as stipulated among members of the Organization for Economic Cooperation and Development. China is not a member of the OECD.

It is unclear if the project specifications will be the same as those in the deal awarded to the original contractor, China National Machinery and Equipment Group, which has changed its acronym from CNMEG to Sinomach. The project may also remain in limbo considering the performance record of the implementing agency, the Department of Transportation and Communications.

But at least the Japanese funding commitment may finally get the project moving. Congested Metro Manila and surrounding provinces need a modern railway system. It is unfortunate that this project ended up derailed.