‘No clear funding source yet for Bicol Express revival’

MANILA, Philippines — A plan to revive the Bicol Express is still uncertain as China, the supposed financier of the project, is yet to decide whether it will lend P142 billion to the Philippines.

This, as the Department of Transportation (DOTr) plans to terminate its project management consultancy contract with China Rail Design Corp. (CRDC) for the redevelopment of the Bicol Express.

When sought for the progress of the Philippine National Railways (PNR) South Long Haul, also known as PNR Bicol, Transportation Undersecretary Cesar Chavez said the government has yet to secure China’s approval to finance the project.

As such, Chavez asked Transportation Secretary Jaime Bautista to recall the project management consultancy contract with CRDC if China remains undecided on whether it will loan P142 billion for PNR Bicol. He suggested that Beijing be given a deadline until the end of the year.

Once the consultancy is terminated, Chavez said the government could start pitching PNR Bicol to other financiers. He cited, for example, the possibility of turning to the Asian Development Bank and the Japan International Cooperation Agency for funding.

Also, the government may look at the option of offering PNR Bicol to the private sector through a public-private partnership, a modality that the Marcos administration is pushing for.

Lawmakers, for their part, are wondering why the DOTr is seeking P3.08 billion for PNR Bicol when funding for the project remains uncertain.

In response, Chavez said the amount would bankroll the acquisition of right of way for PNR Bicol to ensure that the alignment is ready once funding is available.

China was supposed to fund the construction of PNR Bicol, as well as the P83 billion Mindanao Railway Phase 1 and P50 billion Subic-Clark Railway. However, former Finance secretary Carlos Dominguez withdrew the loan application due to the reported inaction of Beijing.

Further, Dominguez warned that China may impose an interest rate of three percent, surpassing the level offered by other funders like Japan’s 0.1 percent. In spite of this, President Marcos told his economic team to renegotiate the loans for the three railways with China.

In 2019 the Duterte administration awarded the P14 billion contract for the project management consultancy of PNR Bicol to CRDC, allowing the Chinese firm to design the rail line that seeks to revive the Bicol Express.

The PNR Bicol proposes to reactivate and reconstruct the railway in Southern Tagalog and Bicol Region, running for nearly 600 kilometers from Calamba, Laguna to Daraga, Albay.