10 June 2011
Debt & Public Finance
– The Freedom from Debt Coalition (FDC) on Friday asked incoming Department of Transportation and Communication (DOTC) Secretary Mar Roxas to revoke DOTC’s decision to resume the controversial North Luzon Railways (Northrail) project as a first step to stamp out corruption in the agency. The advocacy group also called on Senator Franklin Drilon to reopen the Senate investigation on the China-funded railways project.
DOTC earlier concluded that the Northrail contract between the Philippine government and Sinomach (formerly China National Machinery and Equipment Corporation) was “made in rightful consideration of Philippine laws and the advancement of the people's interests.”
Emmanuel Hizon, FDC vice president, said that the incoming DOTC Secretary should prove himself as an asset in President Benigno S. Aquino’s fight against corruption by cleaning his own backyard.
“That a project like Northrail – which cost ballooned from $421 million to $621 million from cost-overruns – has been resumed without anyone being made accountable smacks of possible irregularities that Roxas should address,” Hizon said.
Hizon cited earlier studies made by the Citizens Debt Audit Commission (CDAC) on the legal, technical, and financial problems of the project, including the allegations that the Northrail project did not undergo a rigorous bidding process mandated by RA 9184 and that the Buyer Credit Loan Agreement between the government and Sinomach was not able to procure a concurrence with our Monetary Board as required by Section 20, Article VII of the Philippine Constitution.
“We maintain that the Northrail project and other cases of projects financed through illegitimate debts should not be resumed without the merit of a Congressional investigation and debt audit leading to a definitive conclusion on the legality and viability of the projects, to responsible parties being held accountable, and to necessary policy reforms on financing, procurement, and infrastructure planning being implemented,” Hizon said.
Hizon asked Roxas to review the results of the earlier Senate investigations on the project, “since he was a Senator at the height of the Northrail controversies.”Reopen Senate investigation
The debt watchdog also called on Roxas’ partymate, Senator Drilon, to reopen the investigation on the project, saying that the he should “maximize Aquino administration’s openness which was absent during Arroyo’s time” when he first opposed the Northrail project
“It is a perfect time for Sen. Drilon, a vocal critique of Northrail, to pursue his advocacy of ridding of corruption an otherwise crucial developmental project,” Hizon said.
Hizon insisted that the main points raised by Drilon before on the Northrail, including the alleged connection of the project with a deal on the Spratlys, now “more relevant than ever” given the PH-China tensions on the disputed islands.
“It is Drilon’s chance to vindicate himself and the movements who opposed this corrupt project. We in FDC call on Drilon to act as a Senator of the people and champion our sovereign right not to be saddled with illegitimate debts,” Hizon concluded. (30)