P200-B rail project offered to foreigners

Government is offering the controversial P200-billion Mindanao Railways Development Project (MRDP) to foreign developers, and the Presidential Committee on Flagship Projects is now holding talks with various groups interested in undertaking parts of the project.

Branded as a ghost project, the MRDP has been in the freezer since it was approved by the Board of Investments (BOI) on Dec. 23, 1998. It made up half of government's P400 billion investment target that year.

PCFP Chairman Robert Aventajado said the committee had followed up the project with its original proponent but he said they "didn't seem that serious" when government started discussing the details of the plan.

Aventajado said the committee has more or less given up on the original proponent and has initiated discussions with various foreign groups.

However, because of the sheer size of the undertaking, Aventajado said government would have to divide the project into parts that could be offered to various developers instead of looking for a single proponent which would be difficult.

Aventajado said government is now negotiating with a Japanese company, a Spanish group and an Indian consortium.

"The official policy for this project now is to open it to whoever is interested," Aventajado said. "We want them to do the pre-feasibility study and advance the cost and then we will get the proposal from them."

According to Aventajado, Mindanao Autonomous Region Chairman Nur Missuari wants to complete the Cagayan de Oro/Iligan/Pagadian segment first but the PCFP is more inclined to complete the Cagayan de Oro/Bukidnon segment ahead of the other portions.

Aventajado said the Japanese group is interested in undertaking the first phase but he did not reveal what stage the negotiations has reached so far. When completed, the MRDP will give Mindanao its first extensive railways system that will cut across the entire island to link key cities and provide and alternative to the often dangerous and incomplete road system.

Its official proponent and the one who applied for registration at the BOI was Prophil Development Corp., the same group that planned to undertake the Laguna de Bay/Pasig River project which will involve the development of the waterway as well as some land reclamation.

The approval of the mammoth P200-billion project allowed the incumbent Ramos Administration to meet its investment target of P400 million which stood at only P200 million by the time the project was approved for incentives under Executive Order 226.

Records show that after being approved by the BOI during the term of chairman Melito Salazar, the proponents were given until 1997 to complete all preliminary works prior to actual registration including design engineering studies, feasibility studies and fund sourcing.

However, BOI records show that Prohil simply allowed the deadline to lapse without making any follow ups. -