Manilla, 31 August 2016 – The government of The Philippines has received a proposal from a South Korean firm to build a railway in Metro Cebu, the country’s Socioeconomic Planning chief said, signaling a growing interest from abroad, as authorities push for more infrastructure projects outside of Metro Manila.
A South Korean firm has suggested a Light Railway Transit (LRT) line that would connect the busy Visayan metropolis, foster its development and consequently, provide an alternative hub for workers and businesses, the National Economic and Development Authority (NEDA) Director-General Ernesto M. Pernia told reporters last week.
“The Cebu LRT is an unsolicited proposal put forward to the DoTr (Department of Transportation) and also to the Cebu authorities. Putting more infrastructure in Metro Cebu would draw investors, workers and businessmen away from Metro Manila to Cebu, because Cebu is also a very attractive metropolitan area,” Mr. Pernia said.
The proposed Cebu railway is still in the early stages of study, the Cabinet official said and will be subjected to a Swiss challenge if approved for rollout.
Mr. Pernia said it should be possible to complete the planned Cebu LRT before President Rodrigo R. Duterte steps down at the end of June 2022, if the contract is awarded early next year.
The proposed Cebu LRT will have to be evaluated by the NEDA Technical Board, elevated to the Investment Coordination Committee and then to the NEDA Board for final approval before the project can be subjected to a Swiss challenge, Mr. Pernia said.
This plan will complement a bus rapid transit system for Cebu that is funded by the World Bank.
Mr. Pernia added that foreign contractors have also expressed an interest in building a separate railway in Mindanao, a project that was tagged as a priority by Mr. Duterte in his first State of the Nation Address last July 25. He said builders from South Korea, Japan and China are “interested” in the 2,000-kilometer (km) railway project which is currently under a feasibility study.
One segment of the planned Mindanao railway will traverse the cities of Digos, Davao and Tagum and connect to the northern cities of Butuan, Cagayan de Oro and Iligan. A separate line will link Zamboanga del Sur and Zamboanga City to Cagayan de Oro and Malungon, Sarangani.
“We are going to spend on infrastructure in the regions away from Metro Manila to help decongest this already very crowded urban industrial region and bring economic development in these lagging regions, especially Visayas and Mindanao,” he said.
The government is open to allowing more foreign companies to build local infrastructure to leverage their experience, on the condition that workers must be Filipinos and construction must be carried out 24/7, Mr. Pernia said.
Budget Secretary Benjamin E. Diokno said infrastructure spending is expected to reach P7 trillion from 2017 to 2022, starting with an P860.7-billion allocation next year which is equivalent to 5.4% of the gross domestic product.
Earlier this month, the NEDA ICC endorsed 10 big-ticket infrastructure projects for the President’s approval, bringing them closer to being offered to investors.
A number of railway projects have been taken under the government’s public-private partnership program , which has seen contracts for 12 projects cumulatively worth some P217.4 billion awarded, since it was launched in the third quarter of 2010, although the P5.61-billion Philippine Orthopedic Center modernization contract was rescinded by winning bidder Megawide Construction Corp. in November last year.
Awarded projects include the P64.9-billion (inclusive of a P19.3-billion official development assistance component) LRT Line 1 Cavite Extension (CavEx) plus an operation & maintenance project.