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Senate set to reopen inquiry into Northrail issue

11/21/2007

formally asked the Senate to resume its inquiry – in aid of legislation – into the Northrail issue.

Pimentel urged the upper chamber to direct the appropriate Senate committee to undertake the probe and to recommend measures to ensure compliance with the government’s procurement process.

Official documents show that the government borrowed $400 million from China’s Export-Import Bank to finance the rehabilitation and modernization of the first phase of the Northrail project – the 32-kilometer stretch from Caloocan City to Malolos City. The government has provided a $103-million counterpart for the project.

On Feb. 26, 2004, then Finance Secretary Juanita Amatong signed a “Buyer Credit Loan Agreement” with China’s Eximbank, after it was cleared by Asst. Government

In filing Resolution 210, Pimentel formally asked the Senate to resume its inquiry — in aid of legislation — into the Northrail issue.

Pimentel urged the chamber to direct the appropriate Senate committee to undertake the probe and to recommend measures to ensure compliance with the government’s procurement process.

On Feb. 26, 2004, then Finance Secretary Juanita Amatong signed a “Buyer Credit Loan Agreement” with China’s Eximbank, after it was cleared by Assistant Government Corporate Counsel Efren Gonzales and approved by then National Economic and Development Authority Director General Romulo Neri.

Pimentel cited reports that the amount of $125.75 million (P6.5 billion) has already been advanced out of the $503-million funding, and yet the project, scheduled to be completed in May this year, appears to be heading nowhere.

The loan was allegedly contracted without the approval of the Monetary Board as required by section 20, Article 7 of the 1987 Constitution.

“The contract for the project is not only overpriced, but is also ridden with onerous conditions especially in case of default in the payment of the loan,” Pimentel said.

In another onerous provision of the loan agreement, the Philippine government will waive its immunity from suit over its sovereign and patrimonial assets, placing under China’s laws and jurisdiction any suit or judgment that might arise from the contract and granted Eximbank unilateral authority to determine payment schedules and the right to impose penalties for any delay in the project.

Pimentel also questioned why the loan agreement between the Philippines and Eximbank designated the China National Machinery and Equipment Corp. as the contractor for the Northrail project in flagrant violation of the Government Procurement Reform Act (Republic Act 9184) requiring that projects like this should be subjected to competitive public bidding.

He said the Senate inquiry should also determine whether there was prior appropriation of public funds and certification of availability of funds by proper authorities before the railway project was awarded and implemented.

Senate President Manuel Villar Jr. said the reopening of the probe would likely be taken up, but that the Senate could not force De Venecia to face the inquiry due to the so-called parliamentary courtesy.

“We can’t summon the Speaker here, but we can call other officials who are allegedly involved in the deal to the probe,” Villar said in Filipino.

Malacañang, meanwhile, has reportedly told De Venecia not to drag President Arroyo into the Northrail mess while urging him to appear in the Senate investigation to explain his side in the issue.

Chief presidential legal counsel Sergio Apostol stressed that Mrs. Arroyo had nothing to explain over the matter since Enrile only pointed to De Venecia as the alleged “godfather” of the Northrail project.

“Why would he (De Venecia) involve Malacañang in the Northrail project? We have nothing to do with it. It is Senator Enrile who wanted to investigate Northrail. Why would he (De Venecia) drag us into it? He is the subject of a Senate investigation and as a consequence, he should be the one to explain over it,” Apostol told reporters during a phone interview.

Moreover, Apostol also said he could not blame Enrile for being irked at reports that Malacañang was using him to pin down De Venecia on the Northrail controversy.

“These are baseless rumors and speculations. This could be the reason Senator Enrile is already irritated because his intention to probe the matter is being attributed to us (Malacañang) as the mastermind. But its not Malacañang that wants him (De Venecia) grilled over the matter, it is the Senate,” he stressed.

Supporters of De Venecia in the House of Representatives have claimed that he is being probed on the Northrail issue due to his son and namesake, Jose “Joey” de Venecia III’s exposé before the Senate recently, linking First Gentleman Jose Miguel “Mike” Arroyo in the government’s approval of the controversial $329-million National Broadband Network deal forged with China’s ZTE Corp.

Aside from naming Mr. Arroyo, the younger De Venecia tagged former Commission on Elections Chairman Benjamin Abalos Sr. as one of the proponents of the ZTE project, which he said is laced with millions of dollars worth of kickbacks.

Apostol, however, maintained that Mrs. Arroyo’s relationship with De Venecia remains cordial.

This early, though, Apostol said the President may not allow members of her Cabinet to attend the Senate inquiry into the Northrail issue.

“We will invoke the Senate vs. Ermita case, (a Supreme Court decision that gave Mrs. Arroyo authority to decide whether she would allow members of her Cabinet to attend any congressional investigation). They (Senate) could invite underling officials to their inquiry, but not a member of the Cabinet. We will oppose that,” he said. Angie M. Rosales and Sherwin C. Olaes