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DOTr eyes asking DOF to loan P142B for PNR Bicol contract


The Department of Transportation (DOTr) will proceed with securing the financing for the P142-billion contract to design and build the first package of the Philippine National Railways South Long Haul project for PNR Bicol.

In a classificatory statement shared to reporters through Viber, Transportation Undersecretary Timothy John Batan said the DOTr is about to proceed to requesting the Department of Finance (DOF) to apply for a loan with China to finance the contract.

The DOTr and the joint venture of China Railway Group Ltd., China Railway No. 3 Engineering Group Co. Ltd., and China Railway Engineering Consulting Group Co. Ltd. (CREC JV), on January 17, signed a P142-billion Design-Build contract for the design, construction, and electromechanical works for the PNR Bicol project's first 380 kilometers from Banlic, Calamba to Daraga, Albay. 

“Generally, China may finance up to 85% of the contract amount, with the balance to be funded by local counterpart budget,” Batan said.

“The final terms of the loan, including the percentage that will be financed by China, will be subject to loan negotiations by DOF,” he added.

After the DOTr submits the signed contract, the DOF then prepares and submits the loan application to China, and negotiates for the loan.

“After DOF successfully negotiates the loan, DOF signs the Loan Agreement with China,” the DOTr official said.

Batan noted that for China official development assistance (ODA) projects, the contract comes before the loan unlike with the Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) where it's loan first then contracts).

“The Contract that we signed does not become effective until the Loan Agreement with China becomes effective,” Batan added.

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

The contract will involve the construction of 23 stations, 230 bridges, 10 passenger tunnels, and a 70 hectare depot in San Pablo, Laguna, it added.

The PNR Bicol project is one of the flagship projects of the Duterte Administration under the “Build, Build, Build” program.

The DOTr said the PNR Bicol will consist of a 565 kilometer railway, connecting Metro Manila to the southern Luzon provinces of Sorsogon and Batangas.

Once fully operational, it will cut travel time between Metro Manila and Bicol from the current 12 hours by road to as short as four hours, according to the DOTr.

It said passenger trains will run at a speed of up to 160 kilometers per hour, while freight trains will run at a speed of up to 100 kilometers per hour.

During construction, the project is expected to generate more than 5,000 direct jobs per year, it added.

The National Economic and Development Authority (NEDA) Board has approved the financing of the PNR Bicol project through ODA from China. —LBG, GMA News