Malolos-Clark rail delayed on payment issues

MANILA, Philippines — The government has failed to pay a contractor of the Malolos-Clark Railway Project (MCRP) on time, delaying the delivery of the infrastructure by nearly a year from its original target of 2024.

Transportation Undersecretary Cesar Chavez told The STAR that the government faces at least two issues with Package N-05 awarded to South Korea’s POSCO Engineering and Construction Co. Ltd. of the MCRP.

The Department of Transportation (DOTr) faces delays in turning over to POSCO the property where the infrastructure is expected to be built.

Chavez said DOTr suffered a five-month delay in settling its dues to POSCO as agreed upon under the contract. He disclosed that the five months worth of delayed payment would be settled in February.

“There are two major issues in the N-05 contract. First, there are delays in the handover of land to the contractor. Second, there are delayed payments. The payments are five months delayed, but are expected to be settled next month,” Chavez said.

As such, Chavez said the DOTr had to move the target completion of the MCRP by nine months to June 2025 from the original schedule of October 2024.

In a statement, Transportation Secretary Jaime Bautista said the DOTr is working with POSCO to resolve the issues obstructing the civil works for the Malolos to Clark railway.

Bautista said the segment awarded to POSCO has to be completed within the revised deadline, especially as it would house the depot serving the North-South Commuter Railway (NSCR).

“This is a very important part of the NSCR, considering that the operations control center of the project would be located here. The operations control center is the heart of the operations. It is then important that we complete this as planned and on time. There are issues that need to be resolved [and] the DOTr will work closely with the contractor,” Bautista said.

Based on a report, the 36-hectare site where the depot will be constructed used to host several fruit-bearing trees. The government encountered delays in cutting all of them down as it turned over the property behind schedule.

By the end of 2022, POSCO reported that it has finished a third of the segment it was tasked to put up, which all in all comprises 48 buildings and facilities making up the depot.

The Asian Development Bank and the Japan International Cooperation Agency extended $4.76 billion to the Philippines for the completion of the MCRP that is expected to reduce travel time between Malolos, Bulacan and Clark, Pampanga to just 30 minutes.