NR0607:Railway project constitutes treason

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release June 7, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio,Chief of Staff
Email: paggawa@edsamail.com.ph, anakpawis2003@yahoo.com
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Philippine government entered contact of "betrayal and treason" with
China over building of Northrail project; Congress should scrutinize contract as it turns RP resources as collateral to China

Anakpawis Representative Crispin Beltran today said that patriotic legislators and nationalist groups and individuals should file a diplomatic protest against China even as they oppose the Philippine National Railway Modernization and Rehabilitation Program (PNR-MRP). He said in this project building the Northrail, China has taken full advantage of the Philippines while the Philippine government led by President Gloria Macapagal-Arroyo allowed it to happen.

The Northrail is being built from Caloocan to Clark Airbase, Pampanga to the Subic Freeport Zone in Zambales and there's an extension from Caloocan to Fort Bonifacio and another from Clark heading towards Poro Point in La Union. All the parts of the project are in the midst of implementation at various levels; what is clear, however, is that the construction is being hurried. According to latest reports, the construction of the rail from Caloocan to Alabang (Southrail Phase 1) and the line from Calocooan to Malolos, Bulacan (Northrail Phase 1 Section 1) is being done at top-speed, and the houses of more than 7,000 families from Malabon to Valenzuela and hundreds of others in Caloocan have already been demolished;

"This project which the government is touting to be pro-people and pro-development is highly questionable. Close scrutiny of the contract between the Philippines and China will expose the project as onerous and that it constitutes a wholesale betrayal of national sovereignty and the welfare of the Filipino poor," he said.

The loan contract between the Philippines and China (titled "Buyer Credit Loan Agreement No. BLA 04055 between the Export-Import Bank of China and Department of Finance of the Republic of the Philippines for the NorthRail Project-Phase 1, Section 1) stands as the official document on which the financial aspects and actual construction plans of the project is based. "The terms and conditionalities are stated in this contact, as well as the responsibilities of both contracting parties are shocking," he and cause for national outrage," Beltran said.

In the contract for the loan release signed on February 26, 2004, the following are stated:

a. The amount the Philippines borrowed for the project is US$400 million. This will be paid for within twenty (20) years with an interest rate of three percent (3) per annum.

b. The payment amount will be divided in 30 installments, with each installment amounting to US$13,333,333.33. The payment schedule however, as stated in a provision in the contract, will be determined by China and cannot be disobeyed or changed by the Philippines. There is the possibility here that China can demand payment of two, three or four installments in one year and can create payment difficulties for the Philippines.

c. The Philippines will pay a Management Fee of 0.2% of the amount borrowed, or US$800,000 sixty (60) days after the contract signing. Apart from this, the Philippines will pay a Commitment Fee which is the same amount per annum, also 60 days after the signing. The Philippines will also pay US$10,000.00 for the preparations and ratification of the loan agreement.

d.The said loan is what will be utilized for the PNR-MRP project for which the only designated contractor is the China Machinery and Equipment Corporation which is owned by the Chinese government.

"It's patently clear that the provisions on the loan conditionalities alone are enough to drive the country even deeper in debt. At the minimum, the Philippines will be paying double the amount it is borrowing, and the country's foreign debt (already pegged at US$57 million) will again grow exponentially if debt payments are delayed;

The activist solon also said that the following conditions are also stated in the contract:

a. The Philippines cannot cancel or rescind its part of the contract;
b. All the taxes and fees for various permits necessary for the construction and completion of the project will be shouldered by the Philippines;
c. The laws to govern the contact will be the laws of China, and not of the Philippines, and in the case of any foul-up, the Philippines can be charged by Chinese courts;
d. The Philippines waives its government's control over its assets. This means that the Chinese government can sheriff and take control over the assets of the Philippines with the exemption of diplomatic missions, military installations, and facilities that are "for public use." Apart from this, China can also take control of the Philippines' natural resources, as well as government-owned and controlled corporations and the like;
e. Any loss in profit, financial damages and other expenses that will be incurred as a result of the failure of the Philippines to obey the provisions of the contract will be shouldered by the Philippines;

"The Philippine government's involvement in this contract with China constitutes a national betrayal as the government surrenders national sovereignty and patrimony to China. The Philippine government led by President Gloria Macapagal-Arroyo has put up the country's natural resources and other assets as collateral and financial guarantee for a project that will not benefit the Filipino people but instead provide greater convenience to foreign investors at the expense of Philippine laws and the welfare of hundreds of thousands of residents. Congress should closely scrutinize the contract and investigate the events and circumstances that led to the finalization of such contract," he said.