The Department of Transportation (DoTr) is asking the Department of Finance (DoF) to secure a loan agreement with China that would finance the P142-billion contract for the first 380 kilometers of the PNR Bicol Project — the government’s single, largest rail deal to date.
In a text message to reporters on Wednesday, Transportation Undersecretary for Railways Timothy John Batan said China may finance up to 85 percent of the contract amount, with the balance to be funded by local counterpart budget.
“The final terms of the loan, including the percentage that will be financed by China, will be subject to loan negotiations by DoF,” Batan said.
On Tuesday, Transportation Secretary Arthur Tugade announced that he signed the deal — which covers the construction of the train stations between Calamba, Laguna to Daraga, Albay — on Monday, 17 January.
“For our kababayan in the South who have dreamed of this project for so long, we are finally seeing the light of day. This milestone is a huge leap towards realizing this long-awaited project — the PNR Bicol or the South Long Haul Project,” Tugade said.
“We are grateful to our development partners from China for supporting us in this endeavor and believing that the Filipino people deserve an improved quality of life.”
Meanwhile, PNR General Manager Junn Magno welcomed the development, saying that the project will hopefully “provide comfort and convenience to our commuters.”
The Design-Build contract was signed with the Joint Venture of China Railway Group Ltd., China Railway No. 3 Engineering Group Co., Ltd., and China Railway Engineering Consulting Group Co., Ltd. (CREC JV), for the design, construction, and electromechanical works for the project.
Listed in both the Hong Kong and Shanghai stock exchange, CREC JV ranked 35th on the Fortune Global 500 list and 5th among China’s top 500 enterprises in 2021.
The first 380 kilometers of PNR Bicol from Banlic, Calamba, Laguna to Daraga, Albay will span 39 cities and municipalities, four provinces, and two regions. It will involve the construction of 23 stations, 230 bridges, 10 passenger tunnels, and a 70-hectare depot in San Pablo, Laguna.
Along with its future segments, PNR Bicol will consist of a 565-kilometer railway, connecting Metro Manila to the southern Luzon provinces of Sorsogon and Batangas.
Once fully operational, it will cut travel time between Metro Manila and Bicol from the current 12 hours by road to as short as four hours.
Passenger trains will run at a speed of up to 160 kilometers per hour, while freight trains will run at a speed of up to 100 kilometers per hour.
During construction, the project is expected to generate more than 5,000 direct jobs per year.