OTHER GOV’T DEALS WITH CHINA ALSO MARRED BY BAD LOANS AND CORRUPTION

Aside from the controversial US$330 million ZTE broadband deal, other Chinese loans to the Philippines are similarly marred by corruption and onerous loan agreements.

In January 2007, China agreed to fund a number of infrastructure development projects of the Arroyo administration that cost more than US$1.1 billion (P49.5 billion at P45.50:$1). Four more major infrastructure projects worth at least US$1.7 billion are under negotiation. (See Table) The loan package includes the continuation of the controversial Northrail Project.

In the loan agreement of the Northrail Project, China has the sole authority to determine the payment schedule; the right to impose immediate payments even before the project begins; and it places China’s laws as the governing laws for the agreement and that the Philippine government irrevocably and unconditionally waives its immunity from any suit or judgment arising from the contract.

The loan package also includes US$1 billion in funding for the Laiban Dam Project, which, similar to the Northrail, threatens to displace thousands of indigenous peoples and upland settlers.

According to IBON, the deals signed with China should be opposed, not only because they worsen the country’s indebtedness, but also because they perpetuate the flawed neoliberal framework of economic development that has aggravated the country’s permanent crisis of maldevelopment and widespread poverty.

Table. China-funded infrastructure development projects (in million US dollars)

Approved under the package of Jan.15, 2007 agreements

Project

Agency

Cost

Brief description

Northrail Project Phase I, Section 2

NLRC

673.67

Extension of Northrail from Malolos to Clark covering 48 km.

Main Line South Railway Project Phase 1

PNR

314.80

Rehabilitation and upgrading of the 77.4-km. section of railroad line from Calamba to Lucena City

Non-Intrusive Container Inspection System Project Phase 2

BOC

115.00

Purchase, installation, and operation of 20 mobile X-ray machines

Sub-total

1,103.47

Projects in the pipeline

Laiban Dam Project

MWSS

1,000.00

Construction of a concrete dam, intake structures, hydropower plants, & other structures

Metro Manila Skyway Stages 2 & 3

NDC

633.54

Construction of an elevated expressway to link South Luzon expressway & the North Luzon expressway

Angat Water Utilization & Aqueduct Improvement Project Phase 2

MWSS

63.58

Construction of an 11.5-km. new aqueduct to secure existing raw water supply in Metro Manila

Laoag International Airport Expansion Project

DOTC

Upgrading & modernization of the airport’s various facilities

Sub-total

1,697.12

GRAND TOTAL

2,800.59

Compiled by IBON based on information and data from the Development Information Staff, NEDA


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