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Talks on three stalled railway projects have restarted between the Philippines and China
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The projects are PNR South Long Haul Project (North-South Commuter Railway), Subic-Clark Railway, and the Mindanao Railway (Tagum-Davao-Digos)
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Bilateral discussions on the funding reportedly stalled on China Eximbank’s intention to charge 3% interest on the official development assistance loans, higher than Japanese ODA financing rate of 0.1% for other railway projects in Metro Manila and other parts of the country
The Philippines and China have restarted talks on three stalled railways projects, holdovers from the previous administration.
In a statement, the Department of Transportation (DOTr) said Secretary Jaime Bautista and Chinese Ambassador Huang Xilian agreed to restart negotiations for major transport projects during their first official meeting at the Chinese Embassy in Makati on August 11.
The two officials discussed resumption of talks for China-funded railway projects PNR South Long Haul Project (North-South Commuter Railway), Subic-Clark Railway, and the Mindanao Railway (Tagum-Davao-Digos).
Also tackled during the meeting were several China-Philippines Maritime Cooperation Projects, particularly the hotline communication and legal affairs cooperation arrangements between the Philippine Coast Guard and the China Coast Guard; possible collaboration on Maritime Traffic Safety, Ferry Safety; a Memorandum of Understanding on Maritime Search and Rescue; as well as the capacity building for maritime governance, safety supervision, and vessels safety inspection.
The Chinese government’s funding support for the projects will strengthen bilateral relations and enhance partnership between the Philippines and China, according to the DOTr statement.
The three China-backed railway projects under the “Build, Build, Build” program are in limbo because they have not received funding from Beijing, Transportation Undersecretary for Rails Cesar Chavez said earlier.
Chavez said the loan agreements for the three projects were considered “withdrawn” after the Chinese government failed to act on the funding requests by the previous administration.
Bilateral discussions on the funding had reportedly stalled on China Eximbank’s intention to charge 3% interest on the official development assistance loans. Finance 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.
The biggest of the three projects is the P142-billion proposed 380-kilometer Philippine National Railways (PNR) connection from Banlic, Calamba to Daraga, Albay, or PNR Bicol Package 1.
The Subic-Clark freight railway project has a project cost of P51 billion while the Mindanao Railway project will need P83 billion in funds.
All thee railway projects were to be resubmitted for National Economic and Development Authority re-evaluation and approval.
NEDA’s Investment Coordination Committee will re-evaluate the project proposals to determine whether they will still be funded through ODA loans or public-private partnerships.
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