ZTE whistleblower Rodolfo Noel "Jun" Lozada Jr. on Friday revealed to the Senate Blue Ribbon Committee that the South Railway project rehabilitating the railway system from Manila to Bicol is overpriced by 22 percent, equivalent to $70 million.

In his testimony before the Senate, Lozada said the proponents of the Southrail project told him that palace officials would allegedly benefit from the deal.

Lozada said, "Sina Anthony Wang na yan. Sila na raw bahala sa Palasyo."

Senator Mar Roxas announced that the Senate would soon be opening a new probe into the alleged overpricing. Lozada would be returning to the Senate after the ZTE hearing to testify on the Southrail project.

Earlier Lozada had revealed that the $329-million national broadband network deal between the government and China's ZTE Corp. was overpriced by at least $130 million.

The Philippine National Railways website revealed that the Southrail project would be implemented in two phases. Phase 1 is the rehabilitation and reconstruction of the existing 423-km railway line from Calamba to Legazpi City while Phase 2 is the construction of a new 135-km railway from Comun, Camalig, Albay to Matnog, Sorsogon.

The project's estimated total cost is $932.037 million, broken down to $627.811 million for Phase 1 and $304.226 million for Phase 2.

PNR said $885.435 million or 95 percent of the project cost is proposed to be funded by a loan from the Export-Import Bank of China.

Last July, the National Economic and Development Authority and China's Ministry of Commerce signed a memorandum of understanding for the 542-km Southrail project. Under the agreement, both sides would create a Philippine-China Economic Joint Working Group to track and review the project's performance. The group will be chaired by the NEDA.

The announcement of Sen. Roxas was welcomed by the militant umbrella group Bagong Alyansang Makabayan which demanded an independent review of projects with Chinese involvement such as the Northrail and Southrail to check these for overpricing and padding.

Arnold Padilla of Bayan called on the government to suspend all ongoing infrastructure projects in which the Chinese government is involved.

"The suspension of the ZTE deal is not enough," he added.

Meanwhile, the Philippine National Railways said Lozada was way off the track when he mentioned the PNR "in the same breath as the NBN-ZTE deal."

The PNR is the government agency responsible for the Southrail project.

PNR general manager Jose Ma. Sarasola II noted that Lozada claimed to have attended only one meeting involving the South Railway project.

Sarasola said Lozada referred to a feasibility study for the Calamba to Sorsogon line which was not even submitted in full to the National Economic and Development Authority.

He said what the NEDA reviewed and approved was the Calamba to Lucena portion, a distance of 77 kilometers, which has yet to be funded.

"The project has gone through proper diligence. Its implementation has not been started as the funding arrangements have not yet even been finalized, and here he is implying that there is something anomalous in the project. His statement during the hearing boggles the imagination," Sarasola said.

"Cost-wise, this project is most beneficial to the government and will save a lot of travel time and expense for the commuting public," Sarasola said. "So I really don't know where Mr. Lozada is coming from when he mentioned this project during the Senate hearing on the ZTE-NBN inquiry."