PH, China to sign management consultancy loan for Manila-Bicol railway

The Philippine National Railways’ abandoned train operations in Lucena, Quezon will be revived in the Manila-Bicol railway project. (FILE PHOTO BY DELFIN MALLARI / INQUIRER SOUTHERN LUZON)

MANILA, Philippines — The Philippine and Chinese governments will sign the loan agreement covering project management consultancy for the railway project that will run between Manila and Bicol during President Rodrigo Duterte’s visit to China later this month, the Department of Finance (DOF) said.

As for the initial phase of the Mindanao Railway Project in Davao Region, Socioeconomic Planning Secretary Ernesto M. Pernia said last week that “it’s scheduled for [financing by] China, as of now.”

The National Economic and Development Authority-Investment Coordination Committee-Cabinet Committee (Neda ICC-CabCom) last month approved to more than double the project cost of Mindanao Railway Project-Phase 1 (Tagum-Davao-Digos Segment) to P82.9 billion from P35.9 billion previously.

Pernia, who heads Neda – the state planning agency, said the increase in project cost took into consideration the railway’s alignment crossing a mountainous area.

In October last year, the ICC-CabCom approved the change in financing to official development assistance (ODA), from local funding previously, for the 102-kilometer railway to be built in Region 11 by the Department of Transportation (DOTr).

As for the P175.3-billion, 639-kilometer South Long-Haul Project of the Philippine National Railways (PNR), Finance Undersecretary Mark Dennis Y.C. Joven last week said that the P14.39-billion project management consultancy will be among the five agreements tentatively scheduled for signing by Filipino and Chinese officials on the sidelines of the President’s upcoming official visit to China.

The ICC-CabCom also last month approved the inclusion of the project management consultant, inclusive of value-added tax (VAT) and contingencies, in the scope of works for the PNR South Long-Haul, which will connect Manila and Sorsogon province.

“Contract [for PNR South Long-Haul] was awarded to the China Railway Design Group on Nov. 5, 2018. The project management consultancy contract was signed on Nov. 17, 2018. The review of the loan agreement is ongoing,” Neda earlier said in a report.

The Philippine and Chinese governments had agreed to sign two loan agreements separately covering the project management consultancy and the design-build contracts of the PNR South Long-Haul Project, according to Neda.

Joven said the four other agreements possibly to be signed with China this month included a framework between the DOF and China International Development Cooperation Agency (Cidca) spelling out the process for the Philippines to take out renminbi loans from China; cooperation between the Bureau of Customs and its counterpart Chinese customs agency; an X-ray donation to the BOC by China; and a phytosanitary inspection initiative.