The government plans to terminate two more railway contracts before the end of the year after China dropped its financing for the projects.
Department of Transportation (DOTr) Secretary Jaime Bautista said at the sidelines of the 2023 Economic Journalists Association of the Philippines economic forum in Manila the government has existing contracts for two major railway projects with Chinese companies.
The DOTr in 2022 awarded a P142-billion contract 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. to build the first 380 kilometers of the Philippine National Railway Bicol Project from Banlic, Calamba to Daraga, Albay.
It covers the design, construction and electromechanical works of the project. The PNR Bicol will consist of a 565-kilometer railway, connecting Metro Manila to the provinces of Sorsogon and Batangas.
The government also signed a contract with China Railway for a project management consultancy worth P14 billion. Bautista said of the total assistance from China, the government had drawn P1.4 billion.
The P51-billion Subic-Clark Railway project was awarded to China Harbour Engineering Co. in December 2020. The project is expected to provide high-capacity freight service to support the industrial areas along the Subic-Clark corridor by serving as the link to the airport at Clark Freeport Zone and the seaport at the Subic Bay Freeport Zone.
Bautista said the government had to terminate these contracts because China would no longer finance them.
“For the Philippine National Railway Bicol Project, we will do it before the end of the year,” he said.
“Since there was no loan, the contracts were not valid,” Bautista said.
Finance Secretary Benjamin Diokno earlier informed China that the Philippines was no longer inclined to pursue Chinese ODA financing for the Mindanao Railway Project Phase 1 – Tagum-Davao-Digos Segment (MRP-TDDS).
The P83-billion Mindanao Railway Project: Tagum-Davao-Digos segment was expected to reduce travel time from Tagum City, Davao del Norte to Digos City, Davao del Sur from 3.5 hours to 1.3 hours.
Bautista said the government was now in talks with the governments of Korea, Japan and India to fund these three railway projects.
He also said the agency was also looking at private groups and government funding to finance these projects.