-
Three big-ticket rail projects snarled in a funding issue with China should be “substantially complete” before Marcos’ term ends as loans will be renegotiated, DOTr says
-
The Mindanao Railway Project, Subic-Clark Railway Project, and Philippine National Railway South Long-Haul Project
-
DOTr and Chinese Ambassador to Manila, Huang Xilian, agreed on August 11 to restart negotiations for the projects’ financing
-
DOTr says it is also open to Japan providing funding for the projects
The Department of Transportation (DOTr) is looking to “substantially complete” three big-ticket rail projects before the term of the Marcos administration ends in 2028, as China has agreed to renegotiate funding for the projects.
“Six years may not be enough…but I think if we start it and we do it right, we should be able to substantially complete the project[s] before the term of President Bongbong [Ferdinand Marcos, Jr.] ends,” Transport Secretary Jaime Bautista said in an ANC television interview on August 15.
These projects are the Mindanao Railway Project (MRP), Subic-Clark Railway Project, and Philippine National Railway (PNR) South Long-Haul Project.
Funding requests by the previous administration to China were withdrawn after the Chinese government failed to act on them.
DOTr said in an earlier statement that Bautista and Chinese Ambassador to Manila, Huang Xilian, agreed on August 11 to restart negotiations for the three projects.
Bautista said one of the issues that stalled the projects was on the loan’s interest. He said China was asking for a 3% interest per annum, which the previous administration thought was “quite high” compared with official development assistance (ODA) loans from Japan.
The transport chief said Huang was open to discussion and will “see to it that the contractors that will work [on the projects]…will give us competitive rates so that the overall cost of constructing the projects will be cheaper even [if] the interest rate is a little bit higher.”
Bautista noted that the interest rate is a small portion of the total project cost.
He noted, however, that the government is not limiting its options to China and can also consider working with Japan. He said he met recently with the Japan International Cooperation Agency and mentioned the possibility of Japan providing support for the three rail projects.
DOTr had already procured and awarded contracts for the engineering, procurement, construction, and commissioning of the Subic-Clark Railway Project; the design-build of the PNR South Long-Haul Project; and the project management consultancy of the Mindanao Railway Project.
In January, 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 to build the P51 billion Subic-Clark Railway Project, meanwhile, was awarded to China Harbour Engineering Co. in December 2020.
