China funding for long-haul rail project seen available in 2018

The Department of Transportation is targeting to secure loan commitments from China in 2018 for the funding of a long-haul railway line that will connect Manila to Matnog, Sorsogon, in the Bicol region of southern Luzon.

Cesar Chavez, DOTr undersecretary for rails, said the project, formally known as the Philippine National Railways South Long Haul project, was among the “first basket” of infrastructure deals to be funded and built with China’s help.

He said on Friday that a memorandum of understanding between Manila and Beijing would be signed during the Asean Summit in November this year.

“After the loan agreement for the project is signed in 2018, the loan proceeds will become available under GAA [General Appropriations Act] 2018 unprogrammed appropriations,” Chavez said, referring to funding for the 2018 national budget.

On the government’s “Build, Build, Build” online portal, the PNR South Long Haul is expected to cost around P151 billion to build. It is a 581-kilometer standard gauge railway line, which mainly involves the “complete reconstruction of the legacy PNR railway into a single track, at-grade railway.”

“The railway will connect cities, international seaports and economic zones, allowing for faster transportation of passengers and freight,” according to the government website.

Chavez said the PNR South Long Haul project would be operational by the second quarter of 2022, or before President Duterte’s term ends.

“Implementation works for the project are also ongoing, especially for right-of-way acquisition,” he said. Chavez noted that between P800 million and P7 billion have been appropriated for the project for the 2016 and 2017 budgets, respectively. He said another P3 billion had been requested for 2018.

The PNR South Long Haul project is one of three railway projects approved by the board of the National Economic and Development Authority last Sept. 12.

Also given the go-ahead was the PNR South Commuter line, a 72-km railway system that will run from from Manila to Los Baños, Laguna. The PNR South Commuter project, which will also be financed via an official development assistance (ODA) loan of yet to be determined origin, has a budget of P134 billion and is slated for completion by December 2021.

Also approved by the Neda Board chaired by President Duterte was the P355.6-billion Metro Manila subway project, which will run from Quirino Highway in Quezon City, to Taguig and end at the Ninoy Aquino International Airport complex in Parañaque City.

The DOTr said the plan was to start construction by end-2018, with completion seen by 2025.

The country’s first subway will be funded by a loan from the Japan International Cooperation Agency, with signing targeted around November this year. It will be a 40-year loan with an interest rate of 0.1 percent and a 12-year grace period.