North Luzon Railways Corp. (Northrail) is close to signing a deal with the Sy-owned SM group for the construction of commercial centers in at least two of its train stations.

‘We expect the contract to be signed within the next two weeks,’ Northrail Corp. President Jose Cortes, Jr. told BusinessWorld.

Mr. Cortes said SM is not limiting itself to building commercial centers in just two train stations, namely in Caloocan and Meycuayan in Bulacan.

‘We are targeting to close at least two stations for SM. But we are also open to other groups,’ Mr. Cortes said.

He added that the Ayala group had previously expressed similar intent to put up commercial centers in Northrail stations, but ‘has not come back for the formal talks.’

Sought for comment, an insider from the SM group said: ‘Nothing has been finalized yet. Northrail is supposed to submit a proposal to us, and we are still waiting for it.’

The North Luzon Railways Corp., a government-owned and -controlled corporation, is the owner of the North Luzon Railways project, a rail transport system linking Metro Manila and the Clark Special Economic Zone in Pampanga. The rail system has a total distance of 80 km, and is expected to reach other key areas in central and northern Luzon.

Having a private sector partner to develop some of the train stations will cut down government equity for the rail project.

Building a station for the Northrail project was earlier estimated to cost P5 million each.

With a total funding of 1 million, some million of the total will come from the government. Bulk of the investment for Northrail will come from Chinese contractor China National Machinery and Equipment Corp. Group (CNM-ECG).

The main works for Northrail is due to start next month.

The first phase of the 1-million Northrail project includes construction of train stations in Valenzuela, Marilao, Bocaue, Guiguinto, and Malolos. This will run for 32.138 km from Caloocan in Metro Manila to Malolos Bulacan. This will later on extend to Clark, Pampanga for an additional 48 km.

China National Machinery and Equipment Corp. will build the railway.