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Big firms eye Mindanao rail project

Massive venture a priority under Duterte regime
/ 01:07 AM August 01, 2016

BIG LOCAL and foreign conglomerates are taking a closer look at a massive railway line linking key cities in Mindanao, a “high priority” project of the Duterte administration, despite scant details released so far.

Top officials of San Miguel Corp., Malaysia’s MTD Group and the group of businessman Manuel V. Pangilinan said they were keen on exploring the project. An executive of Ayala Corp. said they were withholding comment until further details were released.

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The Department of Transportation last week announced it was open to accepting unsolicited proposals for the Mindanao railway project.

This mode of procurement was avoided during the Aquino administration, which had a public bias against unsolicited proposals. This refers to project proposals offered by the private sector to be eventually placed under a Swiss challenge, where rival groups are allowed to submit a better offer than the proponent for a chance to win the deal.

Cherie Mercado, transportation department spokesperson, said in a text message that the Mindanao railway line was a “high priority” project but she declined to give added details, suggesting the project was still in the early stage of planning.

She said the department’s railways group still needed to consult with stakeholders, meaning affected communities, business groups and local government units, “on the best alignment” for the project.

Nevertheless, San Miguel Corp. president Ramon S. Ang said they would study the project, as did Ferdinand Inacay, president of the railways unit of Pangilinan-led Manila Electric Co.

MTD Philippines president Isaac David said his group would like to participate in the project, but only as part of a much bigger consortium of companies, given its massive scale.

“It’s a project that we know to construct. However, the project does not only involve construction, it can also involve real estate development,” David said.

Ayala Corp. managing director John Eric Francia said the group needed more details, as it did not have adequate information on the government project.

“We still don’t know the financial viability of the project,” David said.

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The project has been on the drawing board for years, but it never materialized. Historically, railway projects have been focused in Luzon, in particular the capital district of Metro Manila, the center of the country’s political and economic influence and also where road congestion is at its worst.

That policy has shifted with President Duterte, Davao’s long-time mayor and the first Philippine President to hail outside Luzon in more than five decades.

The National Economic and Development Authority (Neda) said last year that it was conducting the study for the Mindanao rail project, which was envisioned to link Cagayan de Oro, Iligan, Zamboanga City, Butuan, Surigao, Davao and General Santos.

Earlier reports said the railway project, once finished, would span 2,000 kilometers and would be broken up into several phases.

“The proposed railway transport service will play a major role toward improvement of Mindanao’s intra-island accessibility, linkages and seamless multimodal transport networks,” Neda said in its terms of reference in seeking consultants for the project.

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TAGS: Business, Duterte Administration, economy, Mindanao, mtd group, News, San Miguel Corp., Trains
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