The government is still in talks with China for the financing of a planned railway project in Bicol.
Jeremy Regino, transportation undersecretary, said the Philippine National Railways (PNR) South Long Haul project remains on the table for funding by the Export-Import Bank of China (CEXIM).
“We have not terminated negotiations with China, negotiations with China are still ongoing.
In fact, the CEXIM technical team was here last December and looking into the progress of our right-of-way acquisition. And another study is being conducted by the Chinese consultants. What was terminated was the Mindanao rail and the Clark-Subic,” said Regino.
Regino said the government will determine certain timelines for the project to move forward.
The project aims to extend PNR’s service to Bicol, building 639 kilometers of rail line with 35 stations, connecting the regions around Luzon to improve trade and travel across the island. The project was originally estimated to cost P142 billion.
Regino said the government has procured a Chinese consultancy firm to do the study on the engineering and technical side of the project, with the loan negotiation already in the “advance stage.”
“In other words, China is also interested, the mere fact that they are here,” he said.
Jaime Bautista, transportation secretary, said the 2,000-km Mindanao Railway Project is back on the drawing board to update its detailed engineering design.
“Since this project has been delayed, we might need to again bring this to NEDA (National Economic and Development Authority) for updating,” he said.
“We inherited this project from the previous management and they have started working with some landowners so there are lot owners already paid. But since we will update the feasibility study, we will have to again look at the numbers and if the cost is more than 10 percent, we will need to go back to NEDA. Also, we’ll need to look at the ridership because the alignment is almost similar to the existing highway,” said Bautista.
Finance Secretary Ralph Recto said the government is open to any form of funding for both projects, noting the “many ways to procure the project.”
“One is through JICA (Japan International Cooperation Agency) or ODA (official development assistance), the other will be through PPP (public-private partnership). We already have the new PPP Code. We are just awaiting as well the updated feasibility study of the project and then we can discuss the best way to procure the project,” he said of the Mindanao Railway.
As for the Bicol railway project, Recto said the preference is “always PPP if possible.”
“If that’s not possible then we go to ODA process. We can explore other financing once they start studying the FS (feasibility study) again. Personally, I prefer PPP so that the government will not have an exposure as much as possible. But if there are no takers and it’s a very important project and that it has to be funded, then we go through ODA,” he said.
Recto has begun a series of worksite visits on various ODA projects to ensure efficient implementation. He started the visit with a check on the construction of the Metro Manila Subway that is funded by JICA.
The project involves the construction of a depot and a 33-km railway system consisting of 17 stations that shall connect Valenzuela City to Pasay City, with a branch line going to Ninoy Aquino International Airport Terminal 3 in Parañaque City.
The project was approved to be financed through a time-sliced loan given its sizable scope at P488.5 billion, of which P370.7 billion will be financed through a JICA loan.
At present, the project is supported by two active loan agreements with JICA — the first tranche worth 104.5 billion yen (about P38.8 billion) signed on March 16, 2018, and the second tranche worth 253.31 billion yen that was inked on February 10, 2022.
The project is expected to enter into a third tranche agreement worth 150 billion yen (about P55.7 billion) by March 2024.
“(T)he Department of Finance is fully committed to securing the funding for this project.
We aim to finalize the loan agreement for the third tranche of financing by March 2024. We will also remain resolute in monitoring the progress of all ODA projects,” Recto said. – Ruelle Castro
