MANILA, Philippines — A day after President Ferdinand Marcos Jr. mentioned an infrastructure push by his administration during his State of the Nation address (Sona), the transport department (DOTr) said on Tuesday it would resubmit three rail projects, whose loan agreements with China were previously withdrawn by the government, to the state planning agency. National Authority for Economy and Development (Neda) for approval.
Transportation Undersecretary for Railroads Cesar Chavez told reporters at Marcos’ economics team’s post-Sona briefing that they were leaving Neda, along with the The Department of Finance (DOF), to decide how financing for these projects would proceed under the new regime, either through official development assistance (ODA) loans or through the public-private partnership program ( PPP).
Financing negotiations for the three projects, which were approved by Neda to receive ODA loans from China, began in 2018. The DOTr had even secured and awarded contracts for engineering, procurement, construction and commissioning of the Subic-Clark rail project; the design-build of the Philippine National Railways long-haul southern project to Bicol, and the project management consultant of the Mindanao Railway Plan.
The finance department, however, informed China Eximbank that loan applications for the three projects would only be valid until May 31, 2022 and would be automatically withdrawn if not approved by then. The Chinese lender did not respond to loan requests.
” The intention of [Transportation Secretary Jaime Bautista] is to resubmit all three. We will leave it to the economics team (on which funding plan would be prioritized),” Chavez said.
“The best is still ODA,” he added, as it would be cheaper than the PPP route.
Finance Secretary Benjamin Diokno, President Marcos’ chief economic officer, said they could also consider funding from other bilateral partners such as Japan, as well as multilateral lenders Asian Development Bank and World Bank.
At this point, Diokno said what was clear was that these expensive railroad projects would be continued by the Marcos administration.
Terry Ridon, head of Infrawatch PH, told the Inquirer that the government “should be able to choose the most competitive tariffs from a variety of donors while ensuring social and environmental commitments with its development partners” .
Still, Ridon said he’s not sure the finance department wants to take on more loans during the pandemic.
“We doubt Malacañang and his economics team are keen on taking out new loans given the current limited fiscal space, especially with rising interest rates around the world,” he said.
At the end of March, the country’s debts as a percentage of gross domestic product (GDP) reached 63.5%, the highest level since 65.7% in 2005. A higher debt-to-GDP ratio could put pressure on the country’s ability to pay. return to its obligations.
The Infrawatch organizer, however, agreed with the DOTr that PPP could be the way forward.
“PPPs can be a viable alternative, but only for projects with a clear business case for private sector participation, such as tolls, railways and transport hubs in metropolitan areas,” he said. -he explains.
Albay Representative Joey Salceda said the Bicol Railroad would be “a game-changer for our Pacific Coast industries” given that Albay is the most densely populated province in the region and hosts the Bicol International Airport.
Panay, hope of Cebu
He added that the railway would be “the closest thing to connecting the House Speaker’s home region to Luzon by rail”. President Martin Romualdez represents Leyte’s first legislative district.
“If we can connect Manila, Albay and the Waray region through a rail-supported transport infrastructure network, we can accelerate development and economic interconnectivity between these regions,” Salceda said, adding that “the Bicol railway will be the backbone of an emerging Bicol-Mimaropa-Waray economic axis.
In Iloilo City, Panay Railways Inc. director and chief operating officer Cesar Capellan said he hoped the rehabilitation of Panay Railways, which closed in 1985, would become a reality under the new administration. , although at a higher cost.
He told the Inquirer that Phase 1 of the railroad rehabilitation alone would cost at least $1.5 billion, as it would include purchasing the trains, construction, hiring staff, l maintenance and costs of relocation of residents along the railway tracks, among others.
Capellan said there would be four phases in the rehabilitation project, which runs from Lapuz District in Iloilo City to Roxas City in Capiz, as well as the extension of the rail line to Iloilo International Port in Barangay. Loboc-Lapuz in Iloilo City.
The revival of the Panay Railroad was among the infrastructure projects the Marcos administration plans to pursue.
Capellan said the government could look at PPP or build-operate-transfer options, the latter over an operating period of 25 to 50 years.
In Cebu, government leaders also hoped to see the realization of the rail system and BRT under the Marcos administration.
“I am excited that he (Mr. Marcos) is supporting BRT and Cebu’s rail system. To address the traffic congestion in Cebu, we need to implement a set of solutions,” Cebu City Mayor Michael Rama said in a media interview.
“These initiatives are a step in the right direction for Cebu City. The President’s Sona gave us a clear path to what we wanted,” he added.
At least three former presidents had promised to set up a public transport project to improve the traffic situation in Cebu.
Gloria Macapagal-Arroyo, Benigno Aquino III and Rodrigo Duterte completed their terms of office which spanned a total of 21 years without realizing either the Cebu BRT or the Cebu rail system.
—WITH REPORTS BY JULIE M. AURELIO AND JOEY MARZAN
DOF still in talks with China over financing Bicol railway
Marcos orders DOTr to renegotiate loan agreements for 3 rail projects
PH drops loan deals with China for Duterte rail projects
To subscribe to MORE APPLICANT to access The Philippine Daily Inquirer and over 70 titles, share up to 5 gadgets, listen to news, download as early as 4am and share articles on social media. Call 896 6000.