Duterte gov’t calls off auction for South Line of North-South Railway

MANILA, Philippines (UPDATED) – The Duterte administration has called off the public-private partnership (PPP) auction for the South Line of the North-South Railway Project (NSRP), and will instead finance the project through official development assistance (ODA) either from China or Japan.

Budget Secretary Benjamin Diokno made the announcement on the sidelines of the 22nd Association of Southeast Asian Nations (ASEAN) Transport Ministers Meeting in Pasay City on Thursday, November 17.

“We will instead look for financing – either Japan or China. With the government, we can borrow with a lower cost. We don’t need return on investment,” Diokno said.

He said that the National Economic and Development Authority (NEDA) Board has raised the cost of the railway project to “between P250 billion and P260 billion” from P170.7 billion. (READ: PH bids out biggest PPP: P171-B North-South railway deal)

“We also changed the costing because what we want is narrow gates. It is now between P250 billion and P260 billion,” Diokno added.

But on Monday, November 21, Diokno clarified that what he meant was the government wanted “a measurable gauge” not “narrow gates.”

The railway project is one of the 9 projects that the NEDA Board chaired by President Rodrigo Duterte approved on Monday, November 14.

Operations for PPP?

The railway PPP deal will involve commuter lines connecting Tutuban in Manila to the southern peripheries of Metro Manila, and a long-haul network to the Bicol provinces. The South Line will also include an initial terminus in Legazpi City and a branch line eventually connecting to Matnog in Sorsogon.

It was in July 2015 when the administration of former president Benigno Aquino III started inviting interested bidders to participate in the auction of the project.

The Aquino administration even targeted to award the railway PPP deal in March 2016, but the project did not move forward since the previous administration released the invitation to bid notice last year.

“Kami na lang magpapagawa (We will just be the one to develop it) just like the SCTEX (Subic-Clark-Tarlac Expressway) model,” Diokno said. The construction of SCTEX was funded through Japan ODA, while its operation and maintenance was auctioned off.

“Later on, we will let the private sector manage it like the SCTEX model,” he added.

Once the Philippine government has secured funding, the budget chief said it will take “4 years to construct the project.”

Transportation Secretary Arthur Tugade was also sought for comment but could not be reached as of press time.

The big-ticket railway deal will involve:

• The 56-kilometer Commuter Rail service, for daily riders on the Tutuban, Manila to Calamba, Laguna route
• The 478-kilometer Long-Haul Rail service, for travelers on the Tutuban, Manila to Legazpi, Albay route.

The South Line of North-South Railway may also have the following extensions:

• The 58 kilometers from Calamba, Laguna to Batangas City, Batangas; and
• 117 kilometers from Legazpi, Albay to Matnog, Sorsogon

Meanwhile, the government already inked a $2.37-billion loan from Japan for the North Line of North-South Railway deal in November 2015.

The North Line of the railway project involves a 36.7-kilometer railway connecting Tutuban, Manila, and Malolos, Bulacan. – Rappler.com