DOTr told to talk to China again, look for other loan options
President Ferdinand Marcos Jr. has ordered the Department of Transportation to renegotiate the loan agreements signed by the previous administration with China for three big-ticket railway projects, DOTr Undersecretary for Railways Cesar Chavez said in a statement released by the Palace on Saturday.
Chavez said the three railway projects—the P142-billion Philippine National Railways South Long-Haul Project, the P83-billion Tagum-Davao-Digos segment of the Mindanao Railway Project and the P51-billion Subic-Clark Railway Project—was to be funded under China’s official development assistance (ODA).
“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,” Chavez said.
Aside from the order to “go back to the negotiating table,” 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 towards public-private-partnerships (PPP).
He said the loan agreements with China for three railway projects are now considered “withdrawn” after Beijing failed to act on the funding requests by the former Duterte administration.
Chavez recalled that then Finance Secretary Carlos Dominguez III tried following up on the Philippines’ loan BBM:…application with China in February this year.
In January, the contract for the P142-billion PNR South Long-Haul Project, also called the PNR Bicol Express, 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, on the other hand, failed to proceed after China was unable to submit a shortlist of contractors for its design-build contract.
Meanwhile, the contract for the construction of the P51-billion Subic-Clark Railway Project was awarded to China Harbour Engineering Co. in December 2020.
Earlier, Albay Rep. Joey Sarte Salceda said if China would not fund the projects, other countries might.
“Japan has just provided the trains for the new North-South Commuter Railway Project a few months ago. And our countries are closer than ever. I think Japan will be very happy to take over financing a project that China has vacated,” Salceda said.
“The next step is not to try to persuade China to back us up again, but to simply look for other funders. Our development should not be used as diplomatic leverage among supposed friends. If they want to finance our development projects, they are welcome to, at the right terms. But if they don’t want to, we can always find others,” the lawmaker added.