PH may drop China funding for railroad project by year-end without Beijing's confirmation

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Metro Manila (CNN Philippines, September 4) — The Department of Transportation (DOTr) may decide to terminate its multi-billion-peso loan reapplication with China for the Philippine National Railways Bicol project by December if talks with the latter remain in limbo.

DOTr Undersecretary Cesar Chavez said that China has not yet confirmed as to whether the P142 billion loan agreement for the Philippine National Railways (PNR) South Long-Haul Project will continue.

"Therefore, after a year and two months before this Committee hearing, the secretary has advised the team to meet with the China Eximbank, to ask them, do you really want us to give us a loan of P142 billion? Otherwise, without P142 billion, there is no civil works contract," DOTr Usec Chavez said during the house committee appropriations on Monday.

As a result, DOTr said that they will decide in December if they will terminate the consultancy contract for the railway line.

"By the end of December, the Department of Transportation will have to go back to NEDA to ask for guidance whether to still request funding from the China Eximbank or to terminate the project management consultancy, and also to withdraw the application, the reapplication for the China Eximbank," Chavez said.

Last year, President Bongbong Marcos ordered the transportation group to renegotiate with China for the loan agreements of railway project funds after the loan application was canceled during the Duterte administration.

The said railway projects were the Subic-Clark Railway Project (₱142-billion), the Philippine National Railways South Long-Haul Project (₱51 billion), and the Mindanao Railway Project's Davao-Digos segment (₱83 billion).

READ: DOTr to renegotiate funding for China-backed railway projects

According to Chavez, the government can still continue the PNR South Long-Haul Project by borrowing from other countries or financial institutions, or by building the railway under a public-private partnership.

"We may go to JICA, we may go to Asian Development Bank, we may go to foreign partners for the electromechanical and the government will still be in charge of the right way of Civil Works with a private contractor," Chavez concluded.