APART from the P83-billion first phase of the Mindanao Railway Project, the Philippines is also withdrawing its plan to seek Chinese loan financing for two more railway projects, Transportation Secretary Jaime Bautista said.
At the sidelines of the German-Philippine Chambers of Commerce and Industry forum in Makati City on Thursday, Oct. 26, Bautista confirmed that the government is also looking for other funding sources for the Philippine National Railways South Long and the Subic-Clark Railway projects.
“‘Yun ang hinahanapan namin ng funding (These are what we’re seeking funding for),” the Transportation chief said.
The two railway projects, along with the Phase 1 or Tagum-Davao-Digos segment of the Mindanao Railway Project, were supposed to be financed through Chinese official development assistance (ODA).
To recall, in July 2022, Transportation Undersecretary for Railways Cesar Chavez said the Chinese government did not act on the Duterte administration’s request for loan financing for the Philippines’ three major railway projects.
In September 2022, however, DOTr said the Philippines will be resubmitting its loan applications for three China-funded projects.
Fast-forward to October this year, Bautista said, “We inherited these projects and since there’s not much movement on the financing [so] we requested the Department of Finance to help us look for other funding sources.”
On Wednesday, Oct. 25, the Transportation chief confirmed the Philippines is no longer pursuing Chinese loan financing for the Mindanao Railway Project.
“In fact, the Department of Finance already sent a letter to China informing them that we will not pursue the loan anymore,” Bautista said, referring to the Chinese ODA financing for the Mindanao Railway Project.
In a letter to Chinese Ambassador to the Philippines Huang Xilian dated Sept. 22, Finance Secretary Benjamin Diokno informed Beijing that the Philippine government is “no longer inclined to pursue Chinese ODA financing for the Mindanao Railway Project Phase 1-Tagum-Davao-Digos Segment.”
While the Finance chief did not cite any reason, Bautista had said that negotiations for loan financing were not moving.
Asked if the rising tension between Manila and Beijing was to blame, the Transportation chief said, “Hindi naman (Not necessarily) because that problem has been there even before this tension in the West Philippine Sea.”
The Philippines has existing contracts for the two railway projects with Chinese companies.
In particular, the contract for the construction of the P142-billion Philippine National Railways (PNR) South Long Haul project or the PNR Bicol from Banlic, Calamba to Daraga, Albay was awarded to joint venture of China Railway Group Ltd., China Railway No. 3 Engineering Group Co. Ltd., and China Railway Engineering Consulting Group Co. Ltd. in January.
On the other hand, the construction of the P51-billion Subic-Clark Railway project was awarded to China Harbour Engineering Co. in December 2020.
Meanwhile, the Tagum-Davao-Digos segment of the Mindanao Railway Project did not proceed as scheduled as China was not able to submit a shortlist of contractors for the project’s design-and-build contract. (GMA Integrated News)
