“If we can connect more areas in the countryside, then we can spur economic activities all along the routes – and thereby reduce poverty incidence, if not abolish absolute poverty – in the entire country possibly within two decades”
In his first State of the Nation Address (SONA) last July 25, President Ferdinand Marcos Jr. declared that his administration would give priority to infrastructure as an integral part of his economic development program for the next six years.
The very next day, the Department of Transportation disclosed that it would resubmit three railway projects, whose loan agreements with China were earlier withdrawn by the government, to the National Economic and Development Authority for approval.
The first of the three railway projects covers the initial phase of the PNR Bicol project, with a cost of P142 billion. This will link Calamba in Laguna and Daraga, Albay via a 380-kilometer railway. It will cover the design, construction and electromechanical works of the project.
The second is the P50-billion Subic-Clark Railway Project, a 71.13-km link between Subic Bay Freeport Zone and Clark Freeport Zone that would transport both freight and passengers.
The third is the first phase of the P83-billion Mindanao Railway Project covering the 102-km Tagum-Davao-Digos route, envisioned to be the first rail line across Mindanao.
This has not been started although it was targeted to be completed by 2024-2025. It would reduce travel time to about an hour from the current 3.5 hours.
If all these were completed within six years, think of the immense economic benefits the country can reap from trains running at full throttle throughout the main islands.
But NEDA, along with the Department of Finance, would still decide how these projects’ funding would proceed, either through official development assistance loans or the public-private partnership scheme.
Funding negotiations for the three rail projects, which NEDA had already approved using ODA loans from China, began in 2018.
The DOTr had even procured and awarded contracts for the engineering, procurement, construction and commissioning of the Subic-Clark railway project; the design-build of the Philippine National Railways south long-haul project to Bicol, and the project management consultant of the Mindanao railway plan.
The finance department, however, informed China Eximbank that the loan applications for the three projects would be valid only until May 31, 2022, and would be automatically withdrawn if not approved by then.
As of now, the preferred route for three railway projects is through ODA loans, as this is deemed cheaper compared to the Public-Private-Partnership scheme.
The DOF might also consider financing from other bilateral partners such as Japan, as well as multilateral lenders Asian Development Bank and World Bank.
According to Finance Secretary Benjamin Diokno, these big-ticket railway projects would be pursued by the Marcos administration, and will check if potential loans from China for the three railway projects would still be feasible.
“The new administration can revisit the projects,” he said recently.
“If found worthwhile, it may choose to restore the loan application, if funding is still available.”
For Albay Rep. Joey Salceda, the Bicol railway would “change the game for our industries in the Pacific Seaboard,” since Albay is the most densely populated province in the area and hosts the Bicol International Airport.
“If we can connect Manila, Albay, and the Waray Region together through a network of rail transport infrastructure, we can accelerate development and economic interconnectivity between these regions…the Bicol railway will be the backbone of an emerging Bicol-Mimaropa-Waray economic axis.”
But there are other railway projects being considered by the new administration.
In Iloilo City, Panay Railways Inc. is looking at rehabilitating the Panay railways, which closed down in 1985.
Phase 1 of the railway’s rehabilitation alone would cost at least $1.5 billion as it would include buying the trains, construction, hiring of personnel, maintenance and relocation expense of residents along the rail lines, among others.
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 extending the rail line to Iloilo International Port in Barangay Loboc-Lapuz in Iloilo City.
The revival of the Panay railway is among the infrastructure projects that the Marcos administration plans to pursue either through PPP or the build-operate-transfer option, with the latter on a 25 to 50-year operating time frame.
In Cebu, officials also want the government to pursue the construction of the railway system and the Bus Rapid Transit under the Marcos administration.
The two projects are seen to address traffic congestion in the province. At least three past presidents had promised to put up a mass transportation project to improve the traffic situation in Cebu.
But the Arroyo, Noynoy Aquino and Duterte administrations finished their terms that spanned 21 years without carrying out either the Cebu BRT or the Cebu railway system.
We cannot overemphasize the importance of proceeding with all these various railway projects as these would enhance economic growth and development in the rural areas along their path.
If we can connect more areas in the countryside, then we can spur economic activities all along the routes – and thereby reduce poverty incidence, if not abolish absolute poverty – in the entire country possibly within two decades.
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