DOTr eyes ODA, PPP as funding sources for 3 major railway projects

By: Philippine Resources November 27, 2023

The Department of Transportation (DOTr) is eyeing official development assistance (ODA) or public-private partnership (PPP) schemes to finance three big-ticket railway projects after it dropped China as a partner to bankroll the projects.

Transportation Secretary Jaime Bautista said the South Long-Haul Project, Mindanao Railway Project, and Subic-Clark Railway would be financed through ODA and PPP, with the government shelling out for right-of-way acquisition.

“Itong tatlong (These three) railway projects na ito can either be financed by ODA, public-private partnership, or the government. We’re looking at those three sources to finance these projects,” Bautista said in a news release Thursday.

“'Yung right of way, hindi 'yan covered ng ODA. So, ito ay magiging gastos ng gobyerno (Right-of-way is not covered by ODA so this is a government expense).”

The DOTr is looking at the Japan International Cooperation Agency, the World Bank, and the Asian Development Bank as options to finance the projects.

Bautista said the agency must first seek approval from the National Economic and Development Authority to update each project’s cost due to the delay in its implementation, as well as the rising cost of materials and labor.

“For us to be able to continue these projects, we need to get approval from NEDA for increase in cost,” he added.

Advisory services

Meanwhile, the DOTr signed on Wednesday contracts with the Public-Private Partnership (PPP) Center and International Finance Corp. (IFC) for advisory services for the development of several transportation projects in the aviation and railway sectors.

Under the contract, the IFC will provide the DOTr transaction advisory services for the modernization and upgrading of several regional airports.

The agreement will also strengthen the Light Rail Transit Line 2 (LRT-2) in terms of its rehabilitation, expansion, and operations.

“(The) designation of the IFC as transaction advisor is a significant step towards the early completion of selected projects in aviation and railways,” Bautista said.

He said the private sector’s involvement in government programs adds premium to each project.

“We highly value partnering with private business in actualizing our transport projects,” he said, citing such PPP projects as the Clark International Airport, Mactan-Cebu International Airport, and the LRT-1.


Article courtesy of the Philippine News Agency

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