It was a boast that was delivered in typical Rodrigo Duterte bombast, during his first State of the Nation Address on July 25, 2016:
“We shall pursue…the Mindanao Rail Project. Hindi ako nagyayabang pero totoo talaga ito (I’m not boasting; it’s really true). In six years lalabas talaga ito (it will be real), I assure you, because it’s going to materialize.”
Was he the first to promise on the Mindanao Rail Project? In fact, he was building on the previous administration. In 2016, there already was a feasibility study done in 2015 and approved by the NEDA. It announced the line would link major cites including Cagayan de Oro, Iligan, Zamboanga City, Butuan, Surigao, Davao, and General Santos. In 2013, Cagayan de Oro Rep. Rufus Rodriguez proposed to the Aquino administration to include the project under the Public-Private Partnership, which it did. The feasibility study alone, which determines the project viability, was funded to the tune of P30 million.
The project was to start with a northern Mindanao hub because that is the part of Mindanao that has access to all the rest of the island. That was also the original plan of Manuel L. Quezon who was the first to envisage a Mindanao railway back in 1936.
And then the plan was relocated to the Davao region. What happened? “To build on the dream of Duterte,” Arthur Tugade said. NEDA rubber-stamped the Davao relocation in 2017. And because of the strategic rethink, the cost ballooned from P35.26 billion to P81.69 billion.
Here is where we need to be discerning of the bigger picture. Duterte’s economic managers were just rubbing his ego by relocating the Mindanao railway dream to his Davao region, which was not the immediate hub needed. In fact, it was impossible to produce a hub from that part of Mindanao because that simply is the geographical reality. It was in the southeastern part and it had no access to all the rest of the island. It was frivolous because it entailed a new study and brought the costs up.
And then the critical part – it was no longer a PPP (funded by the private sector at no cost to government) but was to be funded by an official development assistance from China. In fact, it was touted to be part of China’s controversial Belt and Road Initiative, which had put many countries in a debt trap. Work for the railway was now to be conducted by a Chinese contractor, because that was a condition of China.
Duterte made a state visit to China in October 2016. On his way home, he stopped by Hongkong where he announced to Filipinos there that he was bringing home around $24 billion in Chinese investments and loan pledges. One of these was the Mindanao Railway Project.
China’s consul general Li Lin in Davao City said the money for the railway would be “soft loans that will earn low interest rates.” He lied.
What was the truth about those loans? China wanted a 3% interest rate for the loan. It was outrageously costly. Japan’s offer asked for a very low interest rate of only 0.1%. In short, Duterte brought on us a debt pile that could have further imperiled the budget deficit.
And so the new government had no choice but to make the morose announcement: there is no money to continue the Davao railway project. The announcement was made only after Duterte left office. They probably saw it fit to do so, because China simply took Duterte for a ride. That is the long and short of it.
So what happened to the Duterte promise that was supposed to be propelled by his “strong political will” and his “pivot to China? It was just all hot air propelled by a pivot to nowhere.
The blogger JoeAm summed it up in a tweet that has gone viral: “So China diddled while Duterte fiddled. There is no benefit to appeasement with a self-involved China.”
We had been scammed. – Rappler.com
Antonio J. Montalván II is a social anthropologist who advocates that keeping quiet when things go wrong is the mentality of a slave, not a good citizen.
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