Ro-Ro builder agrees to renegotiate terms

October 12, 2011 at 10:22

French firm to be paid for work already done

French government-backed consortium Eiffel Matiere has agreed to renegotiate the contract for the controversial Greater Maritime Access Roll-on, Roll-off (Ro-Ro) project, which the government wants scrapped, Transportation Secretary Manuel “Mar” Roxas II said.

In a speech before the Makati Business Club and Management Association of the Philippines, Roxas said the P15-billion project will eventually be cancelled, but the French company will be paid for whatever work that is already done.

“The French proponent has expressed a willingness to sit down and renegotiate the contract,” Roxas said on Thursday. Before this change of heart, Eiffel Matiere threatened to sue the government for damages for canceling the deal.

Roxas said the Department of Transportation and Communications (DoTC) would form a working group composed of representatives from the Philippine Ports Authority, the Department of Finance, the Office of the Solicitor General and the department itself.

He said the working group would set the parameters of the “renegotiations and, in the process, the cancellation of the onerous contract.”

The GMA ports project involves the construction of 72 Ro-Ro ports around the country. This was one of several big-ticket deals approved by the previous administration, only to be later found with questionable provisions.

Roxas noted that several of the project’s terms were found to be “objectionable.”

“The design of the ports was not suited for Philippine sea conditions and locally designed cement facilities were half the cost,” he said.

“There were no site inspections, no economic or financial viability studies. In short, the project bypassed the budgetary procurement processes as are the norm in these transactions,” Roxas added.

Another contract to be renegotiated is for the construction of the NorthRail train system, a project that was to be funded and done by the Chinese government.

In a state visit to China last month, President Aquino successfully convinced top Chinese government officials to have the project renegotiated to make the terms “mutually beneficial” between the two governments, Roxas said.

Roxas noted that the project has been plagued with cost overruns, and despite having started in 2004, only one kilometer out of the proposed 90 had been completed.

He said the original goal of the project was the construction of a high-speed rail line between Manila and provinces in Northern Luzon. However, due to allegedly “nefarious” reasons, the terms were revised, shortening the total length of the line.

In place of plans for a high-speed line, a contract for a slower commuter railway system was approved by the previous administration.
By: Paolo G. Montecillo
Source: Philippine Daily Inquirer, Oct. 6, 2011
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