MANILA (UPDATED) — Senators have grilled Department of Transportation officials over their decision to continue pursuing Chinese financing for three railway projects, saying Japan offers better loan terms.

The agency explained that Japan’s lending space for the Philippines is "almost depleted," as some projects were already financed through Japanese loans.

The DOTr has requested the Department of Finance to resubmit loan applications to China for the funding support of the PNR South Long Haul Project (North-South Commuter Railway), Subic-Clark Railway and Mindanao Railway (Tagum-Davao-Digos) project.

The request is still being processed by the Investment Coordination Committee for the necessary government approvals.

Poe asked whether the DOTr also considered financing from other countries.

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DOTr Undersecretary Timothy John Batan said that based on the areas of expertise, experience, and financing headroom for the Philippines, it was Chinese financing that "matched."

Pending the result of efforts to secure the loans, the DOTr said some activities for the three railway projects have started, including the right-of-way acquisition.

Batan said the government targets to sign the loan agreement with China for these projects in middle of 2023.

METRO MANILA SUBWAY COST

Poe also questioned the huge increase in the cost of the Metro Manila Subway project.

It jumped to P480 billion from the initial P300 billion, according to the DOTr.

Batan said the Investment Coordination Committee imposed a condition that the subway should be connected to Ninoy Aquino International Airport Terminal 3.

The subway also needs to be connected to the North-South Commuter Railway System.

"A subway train coming from Valenzuela or Quezon City or Makati, for example, from underground, it will slowly go above ground into our North-South Commuter Rail in the Bicutan area, allowing our subway trains to go all the way to Calamba," Batan said.

He added that infrastructure interventions had to be incorporated to address geological conditions and avoid faultlines.

Meanwhile, amid issues in the global supply of microchips used for stored-value cards, the Light Rail Transit Authority is looking at other options, including the use of QR codes for train ticketing.

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PROJECT DELAYS

The Philippines paid over P128 million in commitment fees in 2021 over the delayed implementation of some DOTr projects financed through foreign loans.

The agency cited the COVID-19 pandemic as among the reasons for the delays. Senators urge the DOTr to implement reforms to prevent such delays.

The DOTr said the agency’s new chief has ordered several measures to improve operational efficiency, which include revising all project contracts, identifying the bottlenecks, and working closely with the Department of Budget and Management to ensure the timely release of appropriations and allotments.

The agency is also coordinating with the Office of the Solicitor General to fast track the acquisition of right of way for its projects.

The proposed 2023 budget for the DOTr is P167.1 billion. Bulk of this figure is funding support for the implementation of various railway projects.

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