A HOUSE leader has thanked Department of Transportation (DOTr) Secretary Jaime Bautista for reiterating the commitment of the Marcos administration to substantially complete the Philippine National Railways (PNR) South Long-Haul Project before 2028.
In addition to a statement given on Monday by Bautista on the matter, House Committee on Ways and Means Chairman and Albay Representative Joey Sarte Salceda cited a conversation with Transport Undersecretary Cesar Chavez, where the undersecretary for rails said China appears to be “willing” to continue the Bicol railway project.
“Undersecretary Chavez told me that Secretary Bautista will be reporting to the Cabinet soon so that the economic team can decide moving forward. For now, given how much progress has already been made on the Bicol rail, it appears that the best way forward is to just keep the arrangement with China, subject to some changes on interest rates,” Salceda said.
“P14 billion in project management consultancy has already been consummated for the project. What’s left to fund is civil works, the trains, and electromechanical equipment. If the Department of Finance [DOF] decides to resume the loan application, construction can start very soon after,” Salceda explained.
Salceda added that other partners are still being explored, but given that the consultancy was already awarded and that the loan was already approved, “the easiest way forward is to just return to the way things were prior to the suspension of the agreement.”
“The interest rate being offered by China is not that bad given current interest rate levels. The 20-year yield for Philippine bonds is currently at 6.745%. So, 3% is a discount,” Salceda added.
Salceda said he is hopeful that the question of funding will be resolved by this year.
“Secretary Bautista has also been very reassuring. He wants this to push through. I have also brought this up to Finance Secretary Diokno, whose decision on the loan will be the most important one,” Salceda said.
Salceda said that the Bicol railway project will be “part of the spine of Bicol’s transport system.”
“Railway remains the cheapest and most efficient way to transport cargo over long distances. There is no close substitute. So, Bicol rail will boost economic activity, as well as trade with the rest of Luzon,” Salceda said.
“We also see Bicol rail as crucial to the progress of other regions, such as the Waray region, the President’s maternal homeland. Trade between Waray and Luzon passes through the Matnog port, and rail will make Manila to Waray logistics costs cheaper if we can connect Matnog and Manila by rail,” he said.
“That will ultimately provide massive opportunities for these two historically neglected regions,” Salceda added.