DESPITE major setbacks, the government remains committed to implementing the Mindanao Railway Project (MRP) and is now exploring private sector partnerships to bring it to fruition, an official confirmed.
In an exclusive interview with SunStar Davao, Mindanao Development Authority (MinDA) Assistant Secretary Romeo Montenegro said the project remains under the Department of Transportation (DOTr) for further study following the national government’s withdrawal of interest for financial support from the Chinese government.
In a letter dated September 22, 2023, addressed to Chinese Ambassador Huang Xilian, the Department of Finance (DOF) stated that the Philippines is “no longer inclined to pursue the Chinese ODA [Official Development Assistance] financing for the Mindanao Railway Project Phase 1 Tagum-Davao-Digos Segment.”
Montenegro said this development offers the DOTr an opportunity to revisit and possibly redesign the project.
“Our assumption is that they are currently finalizing the design,” Montenegro said during the Climate Solutions Forum held Wednesday, July 16, at Dusit Thani Hotel, Davao City.
The original design approved by the DOTr was a single-track, diesel-powered railway system, contrary to MinDA’s recommendation of a dual-track, electrified design.
He also noted that the project alignment is being reevaluated due to strong opposition from affected residents and businesses.
“The study needs to be completed first. Then DOTr can decide whether to proceed with a government loan, like the previous plan, or open it up to the private sector through an unsolicited proposal,” he explained.
No timeline yet
Montenegro admitted that no definite timeline has been set for the project’s implementation, but emphasized the Marcos administration’s support.
“This remains a national and local government priority,” he said.
However, he cautioned that rushing the project could backfire.
“If the government insists on continuing with a flawed design or pushes through with an alignment that faces strong opposition from communities and businesses, it could be very challenging,” he said.
Montenegro acknowledged the public’s frustration over the project’s slow progress. When asked if the railway will materialize before President Ferdinand “Bongbong” Marcos Jr. steps down in 2028, he said, “We can’t say for sure. There are still more than two years left.”
“We don’t have full control over how circumstances unfold. But as long as we remain proactive in pushing for this project, we can ensure there will be movement,” he added.
Montenegro clarified that MinDA is not directly involved in bidding or implementation. Instead, the agency is lobbying for the project and working to keep it on the national agenda.
Searching for investors
While the DOTr has yet to release updated plans and timelines, Montenegro said the government is actively seeking potential investors.
“There’s strong foreign interest in funding the Mindanao Railway,” he revealed.
Originally, the project was to be funded through a loan from China. Now, the government is considering a Public-Private Partnership (PPP) model.
“This time, we’re looking at not taking out loans since many investors are expressing interest,” Montenegro said, though he did not name specific countries or companies.
“There are several interested parties, but nothing is final yet. We’re pushing for a PPP,” he added.
Should the project proceed under a PPP setup, Montenegro assured the public that passenger fares will remain affordable, as regulatory bodies will oversee pricing.
The Mindanao Railway Project: Tagum-Davao-Digos segment is valued at P83 billion. Once operational, it is expected to reduce travel time between Tagum City, Davao del Norte and Digos City, Davao del Sur from three and a half hours to just one and a half hours. RGL