DOTr bares plans for China to fund entire Mindanao Railway project

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Metro Manila (CNN Philippines, May 19) — China may fund all phases of the multi-billion-peso Mindanao Railway project, the Department of Transportation (DOTr) revealed Saturday.

"The ongoing multi-agency and government-to-government discussions are aimed at evaluating whether to finance Phase 1 of Mindanao Railway with Official Development Assistance (ODA) from China," the DOTr said in a press release.

The ODA is a government aid, a loan or grant that aims to promote the economic development of developing countries.

The first phase of the railway project, spanning over 100 kilometers, will connect the cities of Tagum in Davao del Norte, Davao City, and Digos in Davao del Sur. It is expected to reduce travel time from 3.5 hours to 1.3 hours.

The project costs around P36 billion, which was initially supposed to come from the national budget under the General Appropriations Act.

But the DOTr said it might be better for China to finance the entire project, whose cost has yet to be revealed.

"Since China already expressed intent to finance the future phases of Mindanao Railway, there is concern that if Phase 1 is not implemented by China, it will be more difficult to get China's support for the much longer future phases of the Mindanao Railway Project," the agency added.

The DOTr said this phase is "on track" with its target completion date of 2021 amid allegations the project is being delayed as there are certain officials manipulating the bidding process by favoring certain contractors.

During the 2016 campaign, then presidential candidate Rodrigo Duterte said he would prioritize the Mindanao Railway project, which he said would be feasible if the country can strike a deal with China. He also said he was willing to ''shut up'' about the South China Sea dispute if China could build him a railway in the south.