DOTr inks P142 billion deal for PNR Bicol

MANILA, Philippines — The government can now apply for a loan with China for the financing of the Philippine National Railways (PNR) Bicol project after the Department of Transportation (DOTr) signed a deal with a group of Chinese contractors for the construction of the project’s first phase.

The DOTr signed a P142-billion contract with the joint venture of China Railway Group Ltd., China Railway No. 3 Engineering Group Co. Ltd. and China Railway Engineering Consulting Group Co. Ltd. for the design, construction and electromechanical works for the first portion of the PNR Bicol project.

The first 380 kilometers of PNR Bicol from Banlic, Calamba in Laguna to Daraga, Albay will span 39 cities and municipalities, four provinces and two regions.

It will involve the construction of 23 stations, 230 bridges, 10 passenger tunnels, and a 70-hectare depot in San Pablo, Laguna.

“For our kababayans in the south who have dreamt of this project for so long, we are finally seeing the light of day. This milestone is a huge leap toward realizing this long-awaited project – the PNR Bicol or the South Long Haul Project. We are grateful to our development partners from China for supporting us in this endeavor and believing that the Filipino people deserve an improved quality of life,” Transportation Secretary Arthur Tugade said.

With the signing of the contract, the DOTr can now request the Department of Finance (DOF) to apply for a loan with China to finance the project.

According to the DOTr, the DOF will prepare and submit the loan application to China.

Once the DOF successfully negotiates the loan, the agency will then sign the agreement with China.

For Chinese official development assistance projects, the DOTr explained that a contract comes before a loan, unlike with the Asian Development Bank and Japan International Cooperation Agency where a loan comes first before a contract.

“Generally, China may finance up to 85 percent of the contract amount, with the balance to be funded by local counterpart budget. The final terms of the loan, including the percentage that will be financed by China, will be subject to loan negotiations by the DOF,” DOTr Undersecretary for railways TJ Batan said.

PNR Bicol, along with its future segments, will consist of a 565-kilometer railway connecting Metro Manila to the southern Luzon provinces of Sorsogon and Batangas.

The railway project will cut travel time between Metro Manila and Bicol from the current 12 hours by road to as short as four hours.

Passenger trains will run at a speed of up to 160 kilometers per hour, while freight trains will run at up to 100 kph.

The project is expected to generate more than 5,000 direct jobs per year during construction.