CHINA STATE VISIT 'A MILESTONE' / PHL SEEKS TO RE-BID NORTHRAIL PROJECT
[PHOTO - Philippine and Chinese flags line the main streets of Beijing to welcome President Aquino during his five-day state visit.]
BEIJING (PLDT), SEPTEMBER 2, 2011 (STAR) By Aurea Calica — President Aquino's state visit here was described yesterday as a "milestone" in Philippines-China relations as both countries committed to stronger cooperation for trade and economic development.
China expressed support for the Philippines' Public Private Partnership (PPP) projects and reiterated peaceful resolution to the West Philippine Sea dispute.
In a joint statement released after Aquino met separately with Chinese President Hu Jintao, Vice Premier Wang Qishan, Premier of the State Council Wen Jiabao, and Chinese National People's Congress standing committee chairman Wu Bangguo, both countries vowed to resolve conflict in West Philippine Sea.
"China (also) affirmed its support for the Public Private Partnership program of the Philippine government and committed to encourage qualified companies to participate in the competitive bidding processes of the program," the joint statement read.
In a meeting at Zhongnanhai, Wen said it is important to view and manage the Philippines-China relationship "from strategic and long-term perspective and properly handle the disagreements between us because that will help shape favorable atmosphere and sustain the growth of our bilateral ties."
Wen also cited the importance of peace, stability and prosperity in the region.
On the other hand, Wu said the visit of Aquino is "important as he had chosen China as the first nation of your visit to a foreign country outside ASEAN."
"It shows how much importance you have given to the Philippine relations with China," he said, also citing Aquino's "very good discussion" with Hu.
"I am happy to learn that in addition to Beijing you are also to go to Shanghai and Fujian. As the Chinese often say, seeing is the best. I am sure that your visit will help you gain a much deeper understanding about China," Wu said.
Aquino thanked his hosts for all the courtesies extended to him and his delegation.
"Even right now, we can go home confident that we will be bringing a lot of good news to our people and thank you very much for all of these," he said.
"A very good piece of news that we received (yesterday) afternoon is that the China-ASEAN Fund is earmarking a substantial portion for the Philippines," the President said.
Based on the joint statement, the two leaders agreed that with the current instability of the global economy and the growing role of emerging and developing economies in sustaining growth, "it is highly practical and important for the Philippines and China to broaden and strengthen their economic and trade cooperation."
The two leaders affirmed that the Philippines-China Five-Year Development Program for Trade and Economic Cooperation (2012 to 2016) serves as the blueprint for future efforts in agriculture and fishery, infrastructure and public works, mining, energy, information and communications technology, processing and manufacturing, tourism, engineering services and forestry.
Both sides agreed to expand the volume of bilateral trade and accordingly set a target of $60 billion in total two-way trade by 2016.
They were also optimistic that 2012 to 2013 would become the "Philippine-China Years of Friendly Exchanges."
At the same time, they expressed satisfaction that two-way tourist arrivals have breached the one-million mark and agreed to adopt the goal of doubling two-way tourist arrivals to two million by 2016.
The two leaders also shared a positive assessment of the development of Philippines-China relations in the last 36 years since the establishment of diplomatic ties on June 9, 1975.
They also agreed that the Joint Action Plan for Strategic Cooperation signed by the two sides on Oct. 29, 2009 would continue to guide cooperation in all fields.
The Philippines reaffirmed its adherence to the one-China policy, according to the joint statement.
On maritime dispute, both leaders reaffirmed their commitments to respect and abide by the Declaration on the Conduct of Parties in the South China Sea signed by China and the ASEAN member countries in 2002.
They also expressed willingness to further strengthen cooperation in the United Nations, Asia-Pacific Economic Cooperation, Asia-Europe Meeting, World Trade Organization, United Nations Climate Change Conference and other regional and multilateral organizations.
Business expectations
Meanwhile, Trade Secretary Gregory Domingo said Aquino's visit exceeded his expectations as the Philippines generated a lot of interest from Chinese businessmen.
A more than 300-strong business delegation also came from the Philippines to explore investment possibilities.
Domingo said the President would announce the actual investments signed during the visit after they had sorted out which among the commitments were firm or soft.
"The funny thing is that I was told on the way here, our Filipino businessmen have invested something like $2.8 billion in the Chinese economy. Conversely, they have invested $500 million (in the Philippines), so you can see the disparity," Aquino said.
"The official development assistance is continuing - China is already number four in terms of official development assistance behind Japan, ADB (Asian Development Bank), World Bank," he said.
He said China also expressed support for the setting up of a nautical highway because the Philippines "is separated from the ASEAN mainland."
Yesterday, after visiting the Great Wall and the Forbidden City, two of China's most popular tourist attractions, the President met with other business officials.
He also visited Lee World, the China-ASEAN Fund office, Dong Feng, and Shandong Sanli Tires for possible investments in the Philippines.
Phl seeks to rebid NorthRail project By Aurea Calica (The Philippine Star) Updated September 02, 2011 12:00 AM Comments (28) View comments
BEIJING (via PLDT) – The Philippines is seeking to re-bid the NorthRail contract between the government and Chinese firm China National Machinery and Equipment Corp. (CNMEC) in the hope of getting better terms.
Transportation Secretary Manuel Roxas II (photo) told reporters that the Chinese have agreed to "reconfigure" the NorthRail project, but the terms would have to be discussed by his department and his Chinese counterpart. He said this development became apparent during the meeting between President Aquino and Chinese President Hu Jintao.
Roxas, in an ambush interview while on a tour of the Forbidden City with Aquino and his delegation, said the project would have to be redesigned and that CNMEC would be compensated for its efforts.
He said CNMEC had completed only one kilometer of the 90 kilometers in the contract and the advance payment of the Philippine government would likely even exceed the amount that would be paid to the contractor. He said engineers and finance experts would determine the amount.
"There is what you call value engineering," Roxas said, adding, "The key word that we are using is reconfiguration."
"Both in substance and in form, reconfiguration has a difference with renegotiation. Renegotiation means the existing contract will be changed. Reconfiguration is the project itself will be changed," he said.
On Wednesday, Aquino said they discussed the government's appeal regarding the NorthRail project, with the Chinese expressing concern that one of their companies might be put at a disadvantage.
"I think the response basically was there's a Chinese company that expended its time, its efforts, certain resources – their rights have to be respected. But no, our proposal is there so that would be taken care of and further discussions between our Department of Transportation and Communications and the responsible officials that the Chinese have. So that is yet to be resolved," Aquino said during an interview with the media over coffee.
Asked if the Chinese side was open to renegotiation, the President said the answer was subject to interpretation.
"When they get to discussing the details, it would be the proper time for me to really stress and really emphasize what the details are rather than say something right now based on my interpretation of what they said, which is open to other interpretations," Aquino said.
Reconfiguration
"Precisely it's a reconfiguration so instead of going back and focusing on the problematic present, we will reconfigure the entire project, not just the contract. What's important for us is a rail link north," Roxas said.
"The NorthRail project is an attempt to operationalize that. We have problems with that and so we will reconfigure the project itself, not just the contract, so that it will go into the central business district of Metro Manila. Now it just stops in Caloocan, and it will go to the airport itself because now it stops in Mabalacat (Pampanga)," he said.
Roxas explained that what had originally been intended to link the two airports ended up being just a commuter system with about 10 stops.
"So obviously this cannot be used by the passengers at the airport. And it stopped in Mabalacat, which is about 15 kilometers short of the Clark airport facility, and then at the Caloocan port which is another 15 kilometers short of the Central Business District which is also quite important for us," he said.
"Our intent is to write up a whole new project (for the same cost) – it will be what it will be. We will write the terms of reference. This is our desire and this is what the ministers will flesh out… we will write up a whole new project, the Philippine side will write up the terms of reference unlike the existing (contract) where the Chinese side will write the terms of reference," Roxas said.
"In recognition of the Chinese financing, the accreditation will be among experienced Chinese rail companies, not just any contractor," he said.
Roxas said the project "will be bidded out" if and when the talks with the Chinese government end successfully. He said he could not say if China was amenable to such terms.
"All we can say is that they are open and they said the ministers would have to go back and attend to the details," he said.
Roxas said the development was significant because the Chinese side did not flatly reject the Philippines' appeals.
Allegations of corruption have tainted Chinese projects in the Philippines, including the NorthRail and SouthRail projects as well as the national broadband network (NBN) project. Then President Gloria Macapagal-Arroyo had to cancel the NBN deal in the wake of allegations that her husband and some of her officials received kickbacks from NBN contractor ZTE Corp.
"We will write specifically each other (his counterpart) maybe in a month's time. But right now, there are no additional costs because the operations (for the project) were suspended," Roxas said.
He said he didn't know how much a reconfigured project would cost.
"It's hard to tell, we leave it up to the engineers. The big difference is that what we want are as follows: number one, we will write the terms of reference unlike at present where the (Chinese contractor) wrote the terms of reference," Roxas said.
"Secondly, we will determine the accomplishments, unlike now wherein the bank releases the (money) to the (Chinese contractor) according to what they said they had done when we will be the ones to pay for the debt," he said.
Roxas said the debtor should be the one to determine the accomplishments.
"Thirdly, there should be a bidding instead of just designating any company," Roxas said.
Based on its records, CNMEC's expertise is in dams and other projects and not in railways.
In 2004, China agreed to provide some $400 million to begin the project, initially the phase connecting Caloocan City and Malolos in Bulacan.
Considered as the largest Chinese project in Southeast Asia, the NorthRail project was also planned to extend to the Diosdado Macapagal International Airport in Clark freeport, Pampanga.
Its second phase was designed to cover the Subic Freeport Zone in Zambales while its third phase would cover Caloocan City to the Fort Bonifacio Global City in Taguig.
The fourth phase, based on plans, will pass through Pampanga, Tarlac, and Pangasinan until San Fernando, La Union.
According to its original proposal, the company will install a double-track system using narrow gauge tracks compatible with those being used by the Philippine National Railways.
Once completed, the 32-kilometer railway is expected to carry 350,000 commuters daily, including those coming from the Light Rail Transit and the Metro Rail Transit in Metro Manila, which will later be connected to NorthRail.
Transparency
Meanwhile, Isabela Rep. Rodolfo Albano called on President Aquino and his delegation to reveal all the deals and transactions they made in China.
"In keeping with the administration's avowed policy of transparency, all trade and business agreements should be bared and detailed," Albano said.
"With over 300 businessmen accompanying the President, there is much public interest on possible new trade deals," he said.
Albano is a colleague of former president and now Pampanga Rep. Gloria Macapagal-Arroyo in the House opposition bloc.
Arroyo made several trips to China during her nine-year presidency, including a lightning visit in 2007, when, according to a Malacañang press release, she "came and went like a thief in the night," bringing home billions of dollars worth of deals.
One such deal was the $329-million NBN deal. At least two witnesses in the Senate inquiry into the NBN controversy claimed the contract was overpriced and laden with kickbacks.
On the other hand, Cagayan de Oro City Rep. Rufus Rodriguez – an administration ally – lauded Aquino for his successful China trip.
"The $60-billion worth of agreements signed during the Beijing visit will go a long way in helping the country develop its economy. The decision to 'reconfigure' the expensive North Luzon rail project will save us money," he said.
Rodriguez said the discussions on the territorial dispute over the Spratlys group of islets laid down the basis for the eventual resolution of the conflict.
"The consensus was to settle this among claimant-countries with the involvement of ASEAN (Association of Southeast Asian Nations)," he said.
He added that he has no doubt that President Aquino protected the country's interest in all the discussions and agreements he made with Chinese officials. With Jess Diaz
NOY: REGIONAL SOLUTION TO SPRATLYS IS WAY TO GO; CHINA-PHL TIES NOT AFFECTED MALAYA) BY REGINA BENGCO
MANILA, PHILIPPINES - PRESIDENT Aquino last night told Chinese President Hu Jintao that the territorial dispute in the West Philippine Sea (South China Sea) needs a regional solution but should not affect the multi-level relations between the Philippines and China.
Aquino and Hu had bilateral talks at the Great Hall of the People in Beijing as part of Aquino's five-day state visit to China, which also involves trips to Shanghai and Xiamen.
Presidential spokesman Edwin Lacierda said Aquino, during the five- to 10-minute meeting, told Hu that the West Philippine Sea issue is "a regional problem requiring a regional solution."
"The President mentioned in general terms our position on a rules-based regime," Lacierda said in an ambush interview after the "very cordial" bilateral talks.
Lacierda said the other claimants to the West Philippine Sea should also be involved in the development of the area into a sea of cooperation. He said both the Philippine and Chinese sides are "very positive" about the resolution of the conflict.
He said Aquino told Hu that the differences between the Philippines and China regarding the territorial dispute should not stop the two countries from moving forward and having deeper relations.
He said the NorthRail project was discussed and it was agreed that it would push through after some issues are resolved. He said the NBN-ZTE controversy was not taken up.
Hu, in welcoming Aquino before the bilateral talks, said he is glad that he is finally talking to Aquino to elevate Chinese-Philippine relations. He said China is the first country outside Asean where Aquino had a state visit.
Aquino, for his part, said he expects a deeper friendship between the Philippines and China under his administration.
He also apologized to Hu for taking more than a year for his visit to come to fruition when China was the first country that invited him to go a state visit shortly after his inauguration last year. He said his visit was late but it was worthwhile.
Aquino and Hu witnessed the signing of several agreements and exchange of letters, which include memoranda of understanding on cooperation between the Philippines' Department of Foreign Affairs and China's Ministry of Foreign Affairs, between the Philippines' Presidential Communications Operations Office and China's State Council Information Office on friendly exchanges and cooperation, and on sports, tourism, and trade and economic cooperation.
There were also agreements on cooperation between the Philippines' People's Television 4 and the China Central Television, on the extension of an exchange program on culture, and on the assignment of a representative from China's Ministry of Commerce and Investments in the China desk of the Philippines' Department of Trade and Industry.
Earlier in the morning, Aquino urged Chinese businessmen to invest in the Philippines and assured them of a level playing field and a conducive business environment.
Aquino, in his keynote speech at the Philippines-China Economic and Trade Forum, said the businessmen should "ride on this wave of optimism" and invest in tourism, agriculture, and infrastructure, especially projects under the Public Private Partnership program.
He said two Chinese companies have already partnered with the Department of Public Works and Highways to upgrade and maintain roads in Mindanao.
He said the Hebei Road and Bridge Group Company, Ltd. and the China Henan Shuili Yiju company are undertaking projects worth $12 million and $11 million, respectively. The projects expected to be completed in 2013.
He said with the formation of the Asean Economic Community by 2015, the Philippines will be the northern gateway to the region.
"The time to open that gateway, together, is now," he said.
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