Metro Manila (CNN Philippines, November 22) — The Philippines is reviving three mega-railway projects with financing from other foreign donors after completely dropping China as a funding source, the head of the Department of Transportation (DOTr) said on Wednesday.
Transportation Secretary Jaime Bautista said the three big-ticket rail projects, originally costing a combined $5 billion, will be reviewed by the National Economic and Development Authority (NEDA) Board for new costing.
“Kailangan nating kumuha muna ng updated approval kasi although it’s part of the 197 flagship infrastructure projects, ay magkakaron ito ng change of cost dahil ang project na ito ay project ng nakaraang gobyerno, meron nang approved cost. Pero tingin ko ay magkakaron ng additional cost because of the delay, because of the increase in cost of materials and cost of labor,” he explained.
[Translation: We need to get an updated approval first because although it’s part of the 197 flagship infrastructure projects, it will have a change of cost because this project is a project of the previous government that already has an approved cost. But I think there will be an additional cost because of the delay, because of the increase in cost of materials and cost of labor.]
The mega projects – earlier approved and brokered by the Duterte administration – include a freight connection between the two giant former US military bases in Luzon: an $896-million, 71-kilometer railway connecting Subic Bay Freeport Zone and Clark Freeport Zone.
The two others involve a $2.5-billion railway stretching from Calamba to Bicol province and a $1.45-billion train line in Mindanao.
Bautista last month had said the Philippines will no longer seek funding from China for these three projects.
The cancellation came in the wake of an outbreak of fresh tensions in a waterway flashpoint in the West Philippine Sea, although Bautista at the time downplayed speculations that the decision was linked to that.
On the sidelines of a forum in Makati on Wednesday, the DOTr chief said the government will tap mixed financing from other donors or partners.
Official development assistance (ODA) bodes well since if in the form of a loan, it can be paid long-term and with a grace period.
“Itong tatlong railway projects na ito (These three railway projects), mainly financed by either ODA, PPP or from government. And we’re looking at all those three sources as possible financing for these projects.”
Bautista, however, pointed out that the government may have to partly bankroll the projects since the ODA cannot cover expropriation costs for gaining right of way.
“Meron tayong tinatawag na (We have what we called) fiscal space problem so most probably, ito ay magiging ODA. Maybe certain part of the project can be financed by the government also,” he said.
“For example, ‘yung right of way. Hindi ‘yan kino-cover ng mga ODA. Ito ay magiging gastos ng gobyerno. Pinag-aaralang mabuti ‘yan. Under existing guidelines, ‘yung right of way hindi nako-cover ‘yan ng ODA, so dapat gobyerno talaga magbayad,” he added.
