The Chinese contractor of the $503-million North Rail project wants out because of the "huge bribe" paid to Filipino officials, according to a lawyer familiar with the case.

Speaking at the Serye Café news forum in Quezon City, lawyer Harry Roque said most of the $150 million advanced by the government for the project was spent in paying bribes.

"China National Machinery and Equipment Corp. is backing out of the project because of the huge cost of corruption and the five-year delay it had caused to the project,” Roque said.

One Filipino official involved in the project had at least P500 million in his bank account, according to Roque.

"The Chinese contractor reported the bribes to President Arroyo last Monday when she met with them in Clark," he said.

Chinese embassy officials know about the bribe or "tongpats," but they "are not speaking about it, at least not publicly," he added.

Roque said CNMEC wanted to recover the money first before it proceeds with project. It wanted the government to advance an additional $200 million to recover the cost of alleged corruption, but Malacañang has refused.

"This is the story that Palace officials are not telling the public," he said.

Roque, who challenged the legality of the Northrail contract, said the Makati Regional Trial Court has ruled that since the contract is not a treaty, it is covered by the Procurement Law and should be subjected to public bidding.

"The court declared it as a commercial contract because it did not involve the exercise of sovereign functions," he said.

Roque said CNMEC has questioned the decision before the Court of Appeals, where the case is pending.

"They are claiming that it is a treaty and should not go through the requirement of public bidding, and that they are immune from suit because they are a Chinese state corporation," he said.

Roque said administration officials are speaking "with discordant voices to hide the corruption involved in the Northrail and the fact that the $150 million advanced by the government is already gone without an inch of railway being built."

"One official claimed the project has been terminated, while another asserted that it’s still on," he said.