RP reviews North Luzon Railways contract with China's CNMEG

The government is reviewing its contract with a Chinese contractor in rehabilitating the old north line from Caloocan City to Malolos, Bulacan of the Philippine National Railways. “The contract is being reviewed," Presidential spokesman Edwin Lacierda said Monday, referring to the contract between North Luzon Railways Corp. and China National Machinery and Equipment Corp. (CNMEG). “We don’t know yet the results of the review," Lacierda pointed out, acknowledging that a renegotiation could be one of the recommendations. Transportation and Communications Secretary Jose de Jesus is handling the review, according to Lacierda. The $503-million North Rail was supposed to be operational last February, but the 802-kilometer railway project was suspended since 2009 after CNMEG asked the government for additional payment citing inflation and foreign-exchange issues. On top of its $103-million counterpart money, the Philippines took out a $400 million loan from the Export-Import Bank of China to finance the project. —JE/VS, GMANews.TV