PHILIPPINES— PRESIDENT Ferdinand “Bongbong” Marcos Jr. is looking to renegotiate the country’s loan agreements with China for the three big-ticket railway projects that were initiated by the Duterte administration, Malacañang said on Saturday.
Marcos issued this directive to the Department of Transportation (DoTr) amid reports that the Chinese loan applications for the Bicol, Subic-Clark and Mindanao railway projects have been withdrawn.
Citing a statement from the DoTr, Press Secretary Rose Beatrix “Trixie” Cruz-Angeles said that Marcos wants more investments in the rail transport sector and directed the department to go back to the negotiating table to secure these loan agreements.
“The President was referring to the Subic-Clark Railway Project; the Philippine National Railways (PNR) South Long-Haul Project and the Davao-Digos segment of the Mindanao Railway Project (MRP),” Transportation Undersecretary for Railways Cesar Chavez said.
Chavez said the three railway projects were to be funded under China’s official development assistance (ODA) through loan agreements between the governments of the Republic of the Philippines and the People’s Republic of China.
“There was a policy discussion on three China ODA Rail Projects in last Tuesday’s Cabinet meeting during which the President commented that as a matter of policy, we should encourage more investments in rail and that we should focus more on rail transport,” he said.
The 380-kilometer Laguna-Albay PNR route project, the 71-kilometer freight Subic-Clark railway project and the 830 kilometer Mindanao railway projects are all under former president Rodrigo Duterte’s flagship program Build, Build, Build.
Last January, the DoTr awarded the P142 billion rail contract to China Railway Group Ltd., China Railway No. 3 Engineering Group Co. Ltd., and China Railway Engineering Consulting Group Co. Ltd. for the Laguna-Albay PNR route.
Meanwhile, the P51-billion Subic-Clark Railway Project is part of North-South Commuter Railway or the PNR Luzon System Development Framework.
Meanwhile, the first phase of the Mindanao Railway was supposed to begin construction by the first semester this year but was delayed by the Covid-19 pandemic.
Phase 1 of the Mindanao railways involves building a 100-kilometer train line connecting Tagum, Davao and Digos.
Chavez had said the loan agreements for three railway projects are now considered “withdrawn” after the Chinese government failed to act on the funding requests by the former Duterte administration.
He said negotiations for the three projects began in 2018 and have been approved by the National Economic and Development Authority (NEDA) to receive an ODA loan from China.
From 2021 to 2022, Chavez said the Department of Finance informed China Eximbank that the submitted loan applications would only be valid until May 31, 2022, and would be automatically withdrawn if not then approved.
Then Finance secretary Carlos Dominguez 3rd later decided to cancel the loan applications with China in the light of the upcoming transition of government and in deference to the incoming administration.
Chavez said other funding options are also being considered for the three railway projects such as the possibility of opening it for the private sector since the government thrust is toward public-private-partnerships.
At the beginning of his term, Duterte brought home $24 billion or about P1.2 trillion worth of pledges in loans and grants from China as part of his Build, Build, Build program after the former chief executive’s state visit to Beijing in October 2016.
The Philippines has, so far, received from China about P12.18 billion loan for the Kaliwa Dam project, P5.9 billion grant for the Binondo-Intramuros and Estrella-Pantaleon bridges, P4.37 billion loan for the Chico River Pump Irrigation project, and P998 million grant for the Marawi City rehabilitation.