"Walang Pondo": China-Backed Railway Projects Yet to Get Funding

The Department of Transportation needs to renegotiate the loans.

philippine national railways
PNR trains, for illustrative purposes only
PHOTO BY DOTr Facebook page

(SPOT.ph) The previous administration led by former President Rodrigo Duterte banked on the Build! Build! Build! infrastructure program as its centerpiece. Completed projects include the east extension of the LRT Line 2, which secured funding through the Japan International Cooperation Agency during the presidency of Benigno Aquino III in 2012; the construction of the Parañaque Integrated Terminal Exchange; and the launch of new airports and expressways. Other projects, however, could not move forward because of a lack of funding, according to Department of Transportation Undersecretary Cesar Chavez in a report by ABS-CBN on Thursday, July 14.

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Cause of Delay in Major Philippine Railway Projects

"Ang gusto nating malaman ng tao, walang pondo. Para sa Calamba to Bicol, iyong P142 billion na pinag-usapan, walang pondo iyan. Iyong Clark to Subic, walang pondo yan. Iyong Tagum-Digos, yung 110 kilometers, walang pondo yan," he said.

Also read: Manila to Legazpi City in 4.5 Hours? The PNR Bicol Could Make It Reality

The three projects that he mentioned are all joint ventures with China through loans. The 380-kilometer Philippine National Railways connection from Banlic, Calamba to Daraga, Albay is a venture with China Railway Group Ltd., China Railway No. 3 Engineering Group Co. Ltd., and China Railway Engineering Consulting Group Co. Ltd.—the contract of which was signed and sealed on January 18.

subic clark expressway
PHOTO BY Facebook/China-ASEAN Expo
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The P50-billion Subic-Clark Railway Project has been awarded to China Harbour Engineering Company in December 2019 and signed in January.

The P83-billion Mindanao Railway Project, which was initially expected to start in the third quarter of 2018, saw a delay in construction as China has yet to submit a shortlist of design-build contractors.

"Since we have not received the shortlist of design-build contractors yet from the China side, we are unable to proceed with the construction as originally scheduled. Right now, there’s [an] ongoing review and request by the Philippines’ side to China’s side for this shortlist of contractors and we are hoping that this list is provided soon, Department of Transportation Undersecretary Timothy John Batan said on May 25.

The contract for the first phase of the Mindanao Railway Project was signed with China Railway Design Corp. and Guangzhou Wanan Construction Supervision Co. Ltd. in October 2021.

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"Nagsulat si Secretary Dominguez sa Chinese government: ‘Meron kaming loan application sa inyo para sa construction ng Calamba to Bicol. Meron kaming sinulat na loan application sa inyo from Clark to Subic, about P51 billion. May sinulat kaming loan application sa inyo para sa P83 billion Tagum-Davao-Digos project. At sinabi doon sa sulat ng Secretary of Finance, which means representing the government, kung hindi ninyo iga-grant ang loan na ito, consider it withdrawn. Anong ibig sabihin? Dahil walang sagot, withdrawn," Chavez said.

Chavez' team was instructed by the new administration to reopen the loan application and negotiate again with the Chinese government.

Back in February 2020, Socioeconomic Planning Secretary Ernesto M. Pernia revealed that the Chinese government is "slow" in providing financial assistance to the Duterte administration's infrastructure program. He added that the Japan International Cooperation Agency had been disbursing official development assistance "much faster."

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