DOTr looks to Japan for stalled rail projects after China backout

The Department of Transportation (DOTr) is open to other sources of financing for the three stalled major infrastructure projects.

According to Transportation Secretary Jaime Bautista, the country is considering working with Japan and the Japan International Cooperation Agency (JICA) for the projects.

"Actually, we are not limiting our options to China," Bautista said in an interview on ANC on Monday. "We can also consider working with Japan and JICA."

The three railroad projects that China backed out from funding are the line connecting Calamba to Bicol, another line from Tagum to Davao and Digos, and from Clark to Subic.

Bautista said he already met with Japanese officials in the past week and floated the idea of having them fund the said infrastructure projects.

“We want to have different options. We want to see to it that these options are available and it will really fast-track the construction and implementation of these projects,” he said.

The DOTr in July said the Chinese government did not act on the Duterte administration’s request for loan financing for the projects, and was therefore considered "withdrawn" and therefore had to be renegotiated.

The contract for the construction of the P142-billion South Long Haul project of the Philippine National Railways (PNR) was initially awarded to a 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).

At least 85% of the project — connecting Banlic in Calamba to Daraga in Albay —  was supposed to be financed through a loan from the Chinese government.

The P83-billion Tagum-Davao-Digos segment of the Mindanao Railway Project did not proceed as scheduled, as China was not able to submit a shortlist of contractors for the design-and-build contract. It was a campaign promise of former President Rodrigo Duterte.

Meanwhile, the construction of the P51-billion Subic-Clark Railway Project was awarded to China Harbour Engineering Co. in December 2020, with loan applications submitted by the finance department to China Eximbank, but were not acted upon.

The DOTr over the weekend said it has agreed to restart negotiations with the Chinese Embassy in Manila for the projects.

In the same interview, Bautista said that the projects may not be finished under the term of President Ferdinand “Bongbong” Marcos Jr.

“Six years may not be enough but I think if we start it and we do it right, we should be able to substantially complete the project[s] before the term of President Bongbong ends,” he said.  —KBK, GMA News