No funding, no timeline: Bicol, Mindanao rails hang in the balance

MANILA, Philippines — There is still no certainty on whether the Marcos administration can break ground during its term for the P257-billion railways in Bicol and Mindanao without an identified source of funding.

Transportation Secretary Vince Dizon told The STAR that it is now difficult to fix a timeline for the South Long Haul (SLH) Project and Mindanao Railway Project (MRP) Phase 1.

Both the SLH and MRP were supposed to be financed by official development assistance (ODA) from China, but President Marcos withdrew the loan application in 2023 for lack of progress.

Further, there was also a dispute on the interest rates to be attached to the loans, which ignited the talks to turn sour, as Beijing was reportedly demanding above three percent per annum. It did not help that the countries are in dispute over control in the West Philippine Sea.

Halfway into the Marcos administration, there is still no clarity on who would provide the ODA for the revival of the Bicol Express and Mindanao’s first rail project. Given this, Dizon is uncertain whether the SLH and MRP can break ground within Marcos’ term until 2028.

“Yes, these projects remain in the priority list of the President and in the priority list of the DOTr (Department of Transportation). However, it is difficult to say if we don’t have the funding yet. We cannot program a timeline for them,” Dizon told The STAR.

Finance Undersecretary Joven Balbosa confirmed that the government is still on the lookout for a new financing partner who would fund the civil works of the SLH.

Balbosa told The STAR that France has expressed interest to bankroll the project as conveyed by French Minister Delegate for Foreign Trade and French Nationals Abroad Laurent Saint-Martin during his visit here in April.

Balbosa said the DOF is awaiting the DOTr’s  recommendation on a possible replacement for financing the MRP. India is in the running to replace China in funding the first leg of the railway.

The Department of Finance is also exploring other modes of financing, such as packaging it into a public-private partnership (PPP) or blending ODA and PPP. Right now, the feasibility study of the MRP is being updated with the help of the Asian Development Bank.

While funding remains a question, Filipinos have to wait longer for a cheaper and quicker mode of transport between Metro Manila and Bicol Region that would have been resolved by the SLH.

The SLH, costing P175.32 billion, will extend for 557 kilometers from Sucat, Muntinlupa City to Matnog, Sorsogon, mirroring the old line of what used to be the Bicol Express.

For the meantime, the Philippine National Railways is proposing an P18-billion rehabilitation of its inactive line between Calamba, Laguna and Legazpi, Albay in response to commuting needs in Southern Tagalog and Bicol Region.

The amount will cover the restoration of bridges and tracks damaged largely by the typhoons that have hit the Philippines in recent years. Dizon said the DOTr would work on finding a budgetary source for this request.

Moreover, Mindanaoans have to wait further before  the realization of the P81.69-billion first phase of the MRP, from Tagum City, Davao del Norte to Digos City, Davao del Sur. Had the project proceeded as planned, it would have been ferrying more than 134,000 passengers per day by now.

The first segment of the MRP is expected to reduce travel time between Tagum and Digos to just an hour, from three hours currently.

The President has framed his administration as a period for rail renaissance, originally eyeing to open before the end of his term the largest rail projects in Philippine history – the P873.6-billion North-South Commuter Railway and the P488.5-billion Metro Manila Subway Project.

However, the DOTr is burdened with troubles in right- of-way acquisition, delaying the timelines of rail projects, with the subway moved to as far as 2032.