DOTr bares status of rail project contracts
UNDER the applicable Executive Agreements between the Government of the Philippines (GoP) and the Government of the People’s Republic of China (GoPRC), the Department of Transportation (DOTr) has procured and awarded contracts for the Subic-Clark Railway Project’s (SCRP) engineering, procurement, construction, and commissioning (EPCC) contractor, the PNR South Long Haul (SLH) Project’s Design-Build (DB) contractor, and the Mindanao Railway Project’s (MRP) Project Management Consultant (PMC).
Following DOTr’s award and signing of the above contracts, according to the applicable GoP-GoPRC Executive Agreements, DOTr endorsed the agreements to the Department of Finance (DOF) for the DOF to submit and negotiate the corresponding loan applications with GoPRC.
In 2021-2022, DOF submitted loan applications to China Eximbank for the SCRP EPCC contract and the PNR SLH DB contract, among others awarded by other GOP implementing agencies.
In May 2022, DOF informed China Eximbank that the submitted loan applications will only be valid until May 31, 2022, and that if the applications are not approved, they shall be automatically withdrawn.
DOTr said that this is in light of the upcoming government transition and deference to the incoming administration.
The SCRP EPCC Contract loan applications and the PNR SLH DB were not approved as of May 31, 2022.
In June 2022, the DOF advised China Eximbank that the loan applications for these contracts, among other contracts of other implementing agencies, are deemed “automatically withdrawn”.
Former Finance Secretary Sonny Dominguez said that he “canceled the application instead of keeping it in suspended animation,” in a text message to DOTr Undersecretary for Rails Cesar Chavez on the China ODA (Official Development Assistance) Rail Projects
Considering the withdrawal of the previous loan applications, the current DOTr leadership immediately wrote and coordinated with DOF to initiate policy discussions on the way forward for the above three China ODA Rail Projects.
Policy discussion for the above three China ODA Rail Projects was also initiated at the July 12 Cabinet Meeting, during which President Ferdinand “Bongbong” Marcos Jr. commented that “as a matter of policy, we should encourage more investment in rail we should focus more on rail transport.”
