The Philippine government is still negotiating with China to secure loan financing for the Philippine National Railways’ (PNR) South Long Haul Project.
“Negotiations are ongoing with China,” PNR General Manager Jeremy Regino told reporters at the sidelines of the 43rd annual ASEAN Railway CEOs' Conference in Makati City on Tuesday.
Regino said the government has a “timetable” on its negotiations with the Chinese government, and that “I am not privy to disclose the timetable.”
Nevertheless, the PNR chief said the Department of Transportation (DOTr) and the Department of Finance (DOF) are preparing contingency measures should talks with Beijing fail.
"The DOTr and DOF are studying and evaluating other options for [financing] as well as a hybrid approach where the government will partially fund the project along with an Official Development Assistance (ODA) from other partners," Regino said.
In July 2022, DOTr Undersecretary for Railways Cesar Chavez revealed that the Chinese government did not act on the Duterte administration’s request for loan financing for three major railway projects, which include the South Long Haul Project.
"If you remember, the reason why the negotiations stalled in the previous administration [was due to the] discussion on the rate of interest. Had there been an agreement on the rate of interest before, it would have been done," Regino said.
The contract for the construction of the P142-billion South Long Haul Project—also known as PNR Bicol—from Banlic, Calamba to Daraga, Albay was awarded to 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) in January.
At least 85% of PNR Bicol’s cost was supposed to be financed through a loan from the Chinese government.
Regino said that the Philippine government is aiming to seal a financing deal at a 2.5% interest rate, lower than the previously negotiated 3% proposed by China.
Moreover, the PNR chief said that recent tensions at the West Philippine Sea involving Philippine and Chinese maritime forces will not affect the negotiations for loan funding for the South Long Haul Project.
"Negotiations are ongoing, and I don't think [WPS] was a factor. It is more on how interested the Chinese government is in the project. It is a matter of how badly or enthusiastically they would want to pursue the project," Regino said. — BM, GMA Integrated News