MANILA, Philippines - Sen. Loren Legarda wants the South Rail Project reviewed now that the Department of Justice has ruled that the government must get the approval of the Monetary Board and the National Economic and Development Authority (NEDA) before securing a foreign loan for that undertaking.
In a statement, Legarda said the questionable practice of lender countries selecting the contractors for government projects which they help fund had once again “reared its ugly head” in the P2.72-billion South Rail Project.
“It is only proper that Finance Secretary Margarito Teves went out of his way to ask the Department of Justice for a legal opinion on the project and its funding by China, including the latter’s selection of the China National Technical Imports and Export Corporation as contractor,” she said.
“Government projects must be bidded out to ensure transparency, to afford the Philippines the least possible cost, and to make sure that no laws are being violated.”
Justice Secretary Agnes Devanadera has issued a legal opinion on a query of Finance Secretary Margarito Teves that the subject loan facility needs prior concurrence of the Monetary Board to be valid and effective pursuant to the Constitution.
The government must secure a separate approval from the NEDA, Devanadera added.
However, the appropriation of debt service should be “automatic” under Republic Act 4860, the Foreign Borrowings Act, she said.
Devanadera said that it was necessary for the Government Procurement Policy Board (GPPB) to resolve whether China’s designation of China National Technical Import and Export Corporation as contractor of the project would be consistent with Philippine laws.
“The GPPB has a broad legal mandate to protect national interest in all matters affecting public procurement, taking into account the policy repercussions of addressing the question involved,” she said.
The 542-kilometer project involves three phases to be implemented from 2008 to 2010.
These are Phase I-A for the rehabilitation of the existing line from Calamba in Laguna to Lucena in Quezon; Phase I-B for the rehabilitation of the line from Lucena to Legazpi; and Phase II for the extension of the line from Comun, Camalig in Albay to Matnog in Sorsogon.
It is expected to divert some 28 percent of road traffic and decongest the existing road network.
The forecasted daily passenger load per segment ranges from 8,654 passengers (Sariaya to Lucena Segment) to 27,800 passengers (Manila to Calamba Segment) in 2010.
The estimated total cost of the South Rail Project amounts to $932.037 million, including $627.811 for Phase 1 and $304.226 million for Phase 2, according to the Philippine National Railways. — Aurea Calica