DoTr to terminate 2 railway contracts with Chinese firms

THE Department of Transportation (DoTr) on Monday said it plans to terminate two railway contracts after China failed to act on the funding requests by the Philippine government.

Transportation Secretary Jaime Bautista said the country has two existing contracts for the two railway projects with Chinese companies — the P142-billion contract with the joint venture of China Railway Group Ltd., China Railway No. 3 Engineering Group Co. Ltd. and China Railway Engineering Consulting Group Co. Ltd. to build the first 380 kilometers of the Philippine National Railway Bicol (PNR Bicol) Project from Banlic, Calamba, to Daraga, Albay, and the P51-billion Subic-Clark Railway project awarded to China Harbour Engineering Co.

The PNR Bicol will consist of a 565-kilometer railway, connecting Metro Manila to the provinces of Sorsogon and Batangas.

The government also entered into a contract with China Railway for a project management consultancy worth P14 billion. Of the P14 billion in assistance, Bautista said the government has drawn P1.4 billion.

The project is expected to provide high-capacity freight service to support the industrial areas along the Subic-Clark corridor by serving as the link to the airport at Clark Freeport Zone and the seaport at the Subic Bay Freeport Zone.

Bautista said the government has to terminate these contracts because China will no longer finance these two railway projects.

«For the Philippine National Railway Bicol Project, we will do it before the end of the year,» he said.

«Since there was no loan, the contracts were not valid,» Bautista added.

Earlier, Finance Secretary Benjamin Diokno informed China that the Philippines is no longer inclined to pursue Chinese Official Development Assistance financing for the Mindanao Railway Project Phase 1 – Tagum-Davao-Digos Segment.

Bautista said the government was talking to Korea, Japan and India to fund these three railway projects. The agency is also looking at private groups and government funding to finance these projects.