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Three stalled railway projects whose requests for China funding have been pulled will be resubmitted shortly to the National Economic and Development Authority for re-evaluation and approval
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The Mindanao Railway Project, Subic-Clark Railway Project, and Philippine National Railway South Long-Haul Project proposals will be re-evaluated by NEDA’s Investment Coordination Committee to see if funding will still be via official development assistance loans or public-private partnerships
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Loan agreements with China Eximbank for the three projects are now deemed “withdrawn” after Beijing’s failure to act on the funding requests by the previous administration
Three stalled railway projects will be resubmitted for National Economic and Development Authority (NEDA) re-evaluation and approval after their China funding requests were withdrawn, according to an official of the Department of Transportation (DOTr).
Transport Undersecretary for Railways Cesar Chavez on July 26 said the three projects – Mindanao Railway Project (MRP), Subic-Clark Railway Project, and Philippine National Railway (PNR) South Long-Haul Project – will be resubmitted in the coming weeks to the NEDA Investment Coordination Committee (ICC).
The ICC will re-evaluate the project proposals to determine whether they will still be funded through official development assistance (ODA) loans or public-private partnerships (PPP).
Chavez said Transport Secretary Jaime Bautista’s intention is to resubmit the three projects and let the economic team decide on what form of funding will be used.
Chavez had said earlier that loan agreements for the three projects were now considered “withdrawn” after the Chinese government failed to act on the funding requests by the previous administration.
His statement came a day after President Ferdinand Marcos Jr., in his first State of the Nation Address on July 25, said his administration is committed to completing current investment projects, including various railway works at various stages of implementation nationwide and with a combined cost of P1.9 trillion.
Negotiations for the three railway projects began in 2018 after being approved by NEDA to receive ODA loans from China, Chavez had said earlier.
DOTr had already procured and awarded contracts for the engineering, procurement, construction, and commissioning of the Subic-Clark Railway Project; the design-build component of the PNR South Long-Haul Project; and the project management consultancy for the MRP.
Chavez said from 2021 to 2022, the Department of Finance (DOF) had been informing the China Eximbank that the submitted loan applications would be valid only until May 31, 2022, and would be automatically withdrawn if not approved by then.
Bilateral discussions on the funding had reportedly stalled on China Eximbank’s intention to charge 3% interest on the ODA loans. DOF officials considered the rate as exorbitant, compared with Japanese ODA financing rate of 0.1% for other railway projects in Metro Manila and other parts of the country.
With the withdrawal of the loan applications, he said, the new DOTr leadership had “immediately” written and coordinated with the DOF to initiate “policy discussions” on the future of the three railway projects. A policy discussion on the projects was also initiated at the July 12 Cabinet meeting.
In January this year, the contract for the design, construction, and electromechanical works of the P142-billion PNR South Long-Haul Project, also known as PNR Bicol, was awarded to the joint venture of China Railway Group Ltd., China Railway No. 3 Engineering Group Co. Ltd., and China Railway Engineering Consulting Group Co. Ltd.
The P83 billion Tagum-Davao-Digos segment of the MRP failed to proceed after China was unable to submit a shortlist of contractors for its design-build contract.
The contract for the construction of the P51-billion Subic-Clark Railway Project, meanwhile, was awarded to China Harbour Engineering Co. in December 2020.
