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Saying the Chinese company involved in the botched US$400 million Northrail project is not immune from suit, the Supreme Court gave a lower court the go-signal to hear the annulment case of the allegedly overpriced contract.
In a decision released on March 2, the SC voted unanimously that the contract to build the Luzon Railways was executed not between the Philippine and Chinese governments, but between Northrail Corp. and the China National Machinery & Equipment Corp Group (CNMEG), which is considered a private corporation.
The SC said that the Northrail contract is a commercial transaction and not an executive agreement, as shown in the letter of Chinese Ambassador to the Philippines Wang Chungu that specified CNMEG as the contractor in the project.
At stake is the long-delayed railway line connecting capital Manila to areas in central and northern Luzon. The crucial infrastructure was planned as a 2-phase project with the endpoint at San Fernando City in La Union.
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