Issues with PPA may derail freight rail project

About a billion pesos in train set acquisition, P300 million in track rehabilitation within Manila International Container Terminal (MICT) and another P300 million for a rail connection to the Tutuban station of Philippine National Railways (PNR) are at stake in a project delayed by poor coordination between two government agencies.

PNR general manager Joseph Allan C. Dilay told reporters that “right of way” issues with the Philippine Ports Authority (PPA) had resulted in the deferment of the signing of an agreement between PNR and private firm Mrail Inc., a subsidiary of Manila Electric Co. (Meralco).

The parties concerned were supposed to sign on Thursday a nonexclusive track usage agreement, which would allow the Meralco to use PNR’s tracks in moving cargos between MICT and the Laguna Gateway Inland Container Terminal (LGICT).

Both ports are operated by International Container Terminal Services Inc. (ICTSI), which would have been the first client for the freight railway service of Mrail.

ICTSI and Mrail were all set to spend almost P1 billion on three train sets that would allow them to cope with the demand for cargo movement to and from MICT, said Mrail president and CEO Ferdinand G. Inacay. The partners will also revive the tracks within MICT and connect them to the main PNR tracks—a project that is seen to cost about P300 million.

Separately, PNR is rehabilitating its train tracks and may have to add new ones from Tutuban to just outside the MICT, Dilay said. This is expected to cost about P300 million.

Dilay said the freight rail tracks would be separate from the Tutuban-to-Alabang commuter line project to be built under a public-private partnership or PPP program via competitive bidding.

ICTSI is the contracting party but projects in the port area should still be approved by the PPA. On the right of way issue, it seems the PNR and PPA need to agree on details on where the rail tracks going inside the MICT would go and what fees, if any, would go to which party. The scheduled signing between PNR and Mrail on Thursday was canceled because PNR still had to iron out details with the PPA first, Dilay said.

The contract signing could take place in about two weeks, he said.

The agreement between PNR and Mrail, once signed, will allow Mrail to operate a freight train service in the existing PNR tracks or a minimum of eight round trips per day with an average daily container transfer of 600 TEUs from the MICT and LGICT and vice versa. The freight trains will be operational 24/7.

The freight train service is seen to support the manufacturing industry and facilitate import-export logistics. It will also provide PNR the opportunity to improve its rail system and open up another source of revenue to complement its commuter service.

ICTSI had a freight train service in the 1990s but it stopped in 2002.