No money yet from ‘friend’ China for costlier part of Mindanao railway

By: - Reporter / @bendeveraINQ
/ 05:02 PM July 15, 2019

The more expensive initial phase of the massive Mindanao Railway Project running through the Davao Region would be funded by the Philippines as no agreement has been reached yet with China for funding despite the Duterte administration’s tight embrace of the Asian behemoth as a friend.

In a statement on Monday (July 15), the National Economic and Development Authority (Neda) said the Interagency Coordinating Committee-Cabinet Committee (ICC-Cabcom) last week approved a proposal to more than double the projected cost of the Mindanao Railway Project Phase 1 (Tagum-Davao-Digos) segment to P82.9 billion.


The project, approved in 2017 by the Neda Board chaired by President Rodrigo Duterte, was estimated to cost only P35.9 billion but the ICC-Cabcom gave the go signal to push the project cost up to cover “changes in cost of structural and construction works, among others,” according to the Neda.

The ICC-Cabcom also approved the plan to build an additional Davao satellite depot for the rail system, which further increased its cost.


Last April, the Neda said in a report that the 102-kilometer non-electric railway for the Davao region would be built by the Department of Transportation (DOTr) using official development assistance (ODA), or foreign government, funds.

Last May, Socioeconomic Planning Secretary and Neda chief Ernesto M. Pernia told reporters that the project will be financed by China.

In October last year, the ICC-CabCom approved the change in financing to ODA from local funding and instructed the DOTr to revisit the project’s scope.

But Socioeconomic Planning Undersecretary Jonathan L. Uy told the Inquirer on Monday (July 15) that despite the change in project cost last week, “right now, it is a locally funded project.”

Uy, in a text message, said there had been no “formal endorsement yet between the Philippine and Chinese governments” for any loan for use on the project.

At last week’s ICC-Cabcom meeting, economic managers also agreed to increase the cost of repairing the Guadalupe Bridge in Makati City from P4.3 billion to P7.9 billion because of “changes in construction technology,” plans to build detour bridges and hire more workers to shorten construction period.

A deadline extension to August 2023, well beyond Duterte’s term, had also been approved.


On another project, the 639-km Philippine National Railway (PNR) South Long Haul which would extend PNR services to the Bicol region, the ICC-Cabcom included a management consultancy contract, worth P14.39 billion, in the project’s scope of work.

The Neda said the Philippine and Chinese governments would sign two loan agreements—one for the main railway project and another just for the management consultancy for Chinese construction officials.

The PNR South Long Haul project had been awarded to China Railway Design Group on Nov. 15, 2018 with financing from a loan from China.

The PNR South Long Haul project would connect by railway Manila and Sorsogon province in Bicol. /TSB

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TAGS: China, cost, Davao, DOTr, funds, Mindanao, NEDA, project, Railway
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