Government billed P1.8 billion for railway delays

MANILA, Philippines — A change in railway strategy is becoming more imminent for the Department of Transportation (DOTr), as delays in big-ticket projects have required the payment of P1.8 billion to lenders.

Acting Transportation Secretary Giovanni Lopez has thus instructed rail officials to wrap up pre-construction works, especially on right-of-way (ROW), before the DOTr applies for loans.

Data shared with The STAR showed that the government has been billed commitment fees of up to P1.76 billion by lenders as of July.

Lenders collect commitment fees on borrowers based on the unused portion of a loan, so the longer a borrowing is untapped, the higher the charge. It compels borrowers to maximize their loans and finish their projects on time.

However, Lopez said commitment fees on rail projects have been piling up yearly. The DOTr is forced to hold out the use of loans because projects face ROW delays.

“We try to avoid as much as possible the commitment fees (because) when you enter a contract, and the government itself has delays because of right-of-way and everything, lenders charge us,” Lopez told The STAR.

The first project the DOTr wants to test out its new strategy on is the Metro Rail Transit Line 4 (MRT-4), the proposed 12.7-kilometer line between Ortigas and Taytay, Rizal.

Lopez said the DOTr wants to clear pre-construction requirements for the MRT-4 before it signs a loan with the Asian Development Bank.

The ADB will lend $1 billion to the Philippines to construct the MRT-4. This will be paired with another loan, worth $650 million, from Beijing-based Asian Infrastructure Investment Bank.

However, the ADB’s latest project data sheet pushed the approval timeline for the loan to March 2030. For Lopez, the adjustment grants the DOTr more time to complete engineering design and site acquisition.

The DOTr will also be busy completing the North-South Commuter Railway (NSCR) and the Metro Manila Subway Project (MMSP), both of which would only be finished by early 2030s due to delays.

“As much as possible, we don’t want to increase our loans for now, so we would finish first the NSCR and the subway,” Lopez said.

The MRT-4, though dwarfed by the NSCR and MMSP, will serve the commuting demand in one of the busiest thoroughfares in Metro Manila – the Ortigas-Rizal corridor.

Based on initial plans, the MRT-4 will host 10 stations in its alignment, running through Quezon City, Pasig, Cainta and Taytay. It is expected to reduce travel time between Taytay and Ortigas to just 30 minutes, from three hours right now.

As such, the DOTr is bent on establishing an exclusive bus lane in Ortigas for the meantime. The project will span 30.5 kilometers, reaching up to Aurora Boulevard, with 65 stops in the pipeline.

Lopez said the DOTr is identifying how a busway in Ortigas would look like, because emulating the one in EDSA may be challenging to do given the difference in infrastructure availability.

EDSA is able to host a median busway – with stations in the middle – since the highway is built with an existing railway in the Metro Rail Transit Line 3.

Aside from the Ortigas-Aurora corridor, the DOTr is planning to set up busways on C5 Road and Quezon Avenue, which are also lacking rail transport.