₱102 billion Manila-Bicol railway stretch for bidding in early 2015

Photo courtesy wikipedia.org
Photo courtesy wikipedia.org

By Johnny C. Nunez

LEGAZPI CITY, 5Sept2014 — The reconstruction and rehabilitation of the Philippine National Railways (PNR) south system, that links Manila to Bicol may be bidded out within the next six months under the Public-Private Partnership scheme, with a budget that may reach P102 billion.

In a recent TV interview, Department of Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya said the project is getting a strong push in the national agenda, and forms part of the North-South Commuter Railway (NSCR) system that extends up to the Ilocos region.

Albay Gov. Joey Salceda said the PNR south railway system is a critical factor to development in Luzon. Its rehabilitation has long been awaited and has been aggressively pushed by the Bicol Regional Development Council (RDC) which the governor chairs.

The project was the subject of a series of meetings last week among Salceda, Economic Planning Secretary Arsenio Balisacan, DOTC Secretary Abaya, and Public-Private Partnership (PPP) program Executive Director Cosette Canal.

Salceda said there was a general consensus “to pursue it as the south-bound system under the NSCR, which has a net present value of P78 billion and economic internal rate of return (EIRR) of 19%.”

“We agreed to aggressively push the railway program in the national agenda, and we all agreed that almost all railways in the world involve national subsidies,” said Salceda on his meeting with Balisacan, during the Philippine Launch and Press Conference for the 2014 Human Development Report, August 20.

“As RDC chair, I reiterated our position that the Manila-Bicol railway is critical to development as it promotes rural tourism, empowers Bicol labor to compete in the labor markets of Metro Manila and elsewhere in Luzon, and provides a multi-modal transport means for bringing agricultural products and manufactured goods of Bicol to the rest of Luzon,” he explained.

For instance, Salceda added, the vegetables of Guinobatan’s Inascan Valley should be as competitive in the Divisoria wholesale market as the vegetatbles from Benguet and Baguio City.

During the meeting with Abaya and Canal where they agreed that the PNR south system shall be pursued under the NSCR, Salceda said they estimated the Investment cost of P74 billion to P102 billion, with a critical cost shared by the public investment budget since it is a national priority program.

Salceda initiated a national railways summit in Metro Manila June last year and presented the prospects for a modernized PNR South-Luzon system. He said the railways industry should be placed at the center of the national agenda, adding that “railway development should be a natural companion strategy for the Bicol industry cluster, for development to trickle down and development growth sustained.

He said he had a meeting last August 12 with PPP officials and was briefed on the Integrated Luzon Railway Project which awaits the report from the Canadian Pacific Consulting Services, the PPP Center’s transaction adviser, and “the indications were encouraging.”

Based on the briefing, Salceda sought an audience with the DOTC, National National Economic Development Authority (NEDA) and the PPP.

“While I insisted on a standard gauge, I was assured by DOTC Undersecretary Timmy Lichauco that the existing narrow gauge can go 150 kph to 180 kph, which should reduce the Tutuban-Legazpi trip down to three to four hours,” he shared.

Salceda said the possible bidding for the project as a PPP venture could be by the first quarter of 2015. A meeting with them is scheduled September 4.

Other regions in Luzon, the Metro Manila Development Authority and the Calabarzon RDC have signified interest in the railway development initiative of Salceda, aimed at interconnecting the north and south railways to the Metro Manila system. (PNA)


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