2 foreign-funded infra projects incurred cost overruns - NEDA

MANILA, Philippines - Two foreign-funded projects have substantially exceeded their projected costs, according to the project monitoring of the National Economic and Development Authority (NEDA), but concerned agencies said there was nothing irregular in the additional expenses. The projects are Northrail- Southrail linkage phase I and Light Rail Transit (LRT) line 1 capacity expansion phase II, said Roderick Planta, director of the project monitoring staff division, told reporters Wednesday. Cost overruns refer to additional expenses incurred over and above the amount approved by the NEDA-Investment Coordination Committee. The Northrail-Southrail link being implemented by the Philippine National Railways Corp., with a loan from the Export and Import Bank of Korea, had a cost overrun of P648.12 million. Transportation Undersecretary for railways Guiling A. Mamondiong said in a telephone interview Wednesday that costs of infrastructure projects go beyond budget due to changes in prices of goods. "The project incurred additional costs because of inflation and the currency crisis we are experiencing right now," he said. Mr. Mamondiong declined to give details. The LRT line 1 capacity expansion, with funding from the Japan Bank for International Cooperation, reported additional costs of P1.673 billion. In a telephone interview Wednesday, LRT Administrator Melquiades Robles said the additional funds were spent for urgent additional works such as restoration of trains and repair of walls and railways. "These are actually not cost overruns but additional works," he said, adding the net actual cost was only P700 million. "This has already been endorsed by the NEDA Cabinet Committee and the next step is to present this to the President and the NEDA Board," Mr. Robles said. Mr. Planta said the cost overruns were due to right-of-way issues and institutional problems. "We are still waiting for the status report of five other ODA (official development assistance) projects," he added. The five projects are Metro Iligan Regional Infrastructure Development, Rural Road Network Development, Central Mindanao Road, Urgent Bridge Construction for Rural Development and Iloilo Flood Control. — Louella D. Desiderio, BusinessWorld