republic of the philippines - Philippine Center for Investigative ...

STATEMENT OF FACTS
13. On December 30, 2003, a Contract Agreement (“Northrail
Contract”) was executed between North Luzon Railways Corporation
(“Northrail”), a Philippine government owned and controlled corporation,
and the China National Machinery & Equipment Corporation (“CNMEC”),
a corporation purportedly organized and created under the laws of
China. The contract involved Northrail employing CNMEC as prime
contractor for the construction of railways from Caloocan City to Malolos,
Bulacan (Section I, Phase I of Philippine North Luzon Railways Project).
14. On February 26, 2004, a Buyer Credit Loan Agreement
(“Loan Agreement”) was executed between the Export-Import Bank of
China and the Government of the Republic of the Philippines. Among
other things, the said Loan Agreement provided that China EXIM Bank,
as the lender, will extend Four Hundred Million US Dollars
(US$400,000,000.00) in loans called Preferential Buyer’s Credit, to the
Government of the Republic of the Philippines. The loan will be for the
financing of the construction of the Northrail Project Section I, Phase I.
The Loan Agreement also mandated that CNMEC will act as the Prime
Contractor for the project.
15. Further documents reveal that the total project cost is Five
Hundred and Three Million US Dollars (US$503,000,000.00), of which
One Hundred Seven Million US Dollars (US$107,000,000.00) will be
provided as counterpart funds by the Philippine Government, through
the Northrail.
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