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Fate of Mindanao railway up to next administration

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By Arjay L. Balinbin, Senior Reporter

THE Transportation department on Wednesday said it will now be up to the next administration to start constructing the Mindanao railway project, as the government has yet to receive from China a shortlist of bidders for the design-and-build contract.

“Since we haven’t received the shortlist of the design-build contractors yet from the China side, we are unable to proceed with the construction as originally scheduled,” Transportation Undersecretary for Railways Timothy John R. Batan said during a briefing.

“Considering that we are about to undergo a transition into the next administration, one of the policy areas that we would like to defer to the incoming administration would be on the way forward for this,” he added.

The Department of Transportation (DoTr) had to adjust the construction timeline of the P82-billion Mindanao railway project phase 1, a campaign promise of President Rodrigo R. Duterte.

The project’s construction, which will be financed through an official development assistance package from the Chinese government, was first targeted to start in January 2019 with operations by 2021.

In its revised indicative timeline as of Sept. 2021, construction work was expected to begin in April this year. The government expected to start partial operations in October 2022 and full operations in October 2023.

Mr. Batan said the DoTr hopes China will provide the shortlist of bidders “soon,” but this will depend on the policy direction of the incoming Marcos government.

President-elect Ferdinand “Bongbong” R. Marcos, Jr., who is seen to continue strengthening ties with China, had expressed support for the project during the campaign period.

A Chinese consortium composed of China Railway Design Corp. and Guangzhou Wanan Construction Supervision Co., Ltd. recently bagged the P3.08-billion project management consultancy contract for the first phase of the Mindanao railway project.

Apart from the Mindanao railway project, two other major large-scale rail projects with China are the PNR South Long-Haul Project, or PNR Bicol, and the Subic-Clark Railway Project.

“The Mindanao railway project phase 1 is 100 kilometers long. Right-of-way acquisition is ongoing. Of course, there are some issues along the way. We’ve already acquired some properties voluntarily, so we followed the procedures under our laws,” Mr. Batan said.

Terry L. Ridon, convenor of think tank InfraWatch, said the incoming government should decide on the fate of the Mindanao rail project since the loan agreement has not been signed.

“The new president will have to determine various priorities within our current limited fiscal space, and decide whether the Mindanao rail project has a place in it, and whether there are other cheaper alternatives available in the interim,” he said in a mobile message.

“However, as no loan agreement has yet been signed, the new president can still suspend or cancel the project given our very limited fiscal space. He can also reconsider whether Beijing will continue to be our loan partner for this project.”

Sonny A. Africa, an economist and executive director of Ibon Foundation, said the delays in the project might be a “blessing in disguise” and allow the government to review its feasibility.

“The project feasibility study’s original growth assumptions just look quaint now in seeing 6.7% GRDP (gross regional domestic product) during construction and the early years of operation. In the real world, Mindanao growth was at just 5.6% in 2019 before the pandemic, before contracting 5.7% in 2020,” he said in a Facebook Messenger chat.

“Marcos Jr.’s responsibility is not so much starting the project than actually assessing if this is just going to be a white elephant, wasting government funds and being a money pit in the years to come like so many projects during the Marcos dictatorship.”

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