Spanish group pulls out of P200-B rail project

The Spanish-led consortium has pulled out of the controversial P200-billion Mindanao Railway Project (MRP) and the government has decided to take over the project development and feasibility study before bidding portions of it to private developers.

The Presidential Committee on Flagship Programs and Projects (PCFPP) said government has formed a task force to take over to conduct the feasibility study and prepare the project blueprint.

PCFPP chairman Roberto Aventajado told reporters that the task force had attempted to track down the original proponents of the project to determine the status of the feasibility study and engineering design development.

"We weren't able to find any of them, they're all gone including Prophil Development Corp. which registered the project with the Board of Investments," Aventajado said.

The multi-billion peso railway development project was registered for incentives at the BOI in December 1996. After being packaged, the Spanish government had signed a memorandum of understanding with the BOI to signify its willingness undertake the feasibility study.

However, its proponents have not followed it up since then and efforts to locate them showed that neither Prophil no its other local partner, Euroma Development Corp. still existed.

This spawned criticisms that it was a ghost project that served no other purpose than to meet government's investment targets at the time, bloating it from P200 billion to P400 billion.

"The thing is that this is a good project, Mindanao needs it so the government will pursue it," Aventajado said. "We want to be able to complete at least one segment before the end of the Estrada administration."

The project proposes to link 15 provinces in Mindanao and has been certified as a flagship project. He said the Cagayan de Oro-Iligan stretch was likely to be completed first. This is an 86-kilometer section estimated to cost P74 million.

According to Aventajado, the task force has contracted a San Francisco California-based consultancy group, Andrew Drake & Associates, to conduct the feasibility study, prepare the blueprint and identify at least one segment that could be completed within the next four years.

"The Spanish group can still bid for the project if it is still interested," he said. "Our concern is to undertake the feasibility study and package the project for bidding under the build operate-transfer scheme."

Prophil, an affiliate of Promet Berhad of Malaysia, had originally planned to undertake the project with a consortium consisting of Euroma, Construcciones y Auxillia de Ferrocariles and Cobra instalaciones y Servicios S.A.

Aventajado earlier said government had also held exploratory talks with a Japanese firm as well as an Indian firm which expressed keen interested in at least one segment of the 1,435-kilometer railway network.

Following the disappearance of its original proponents, government decided break the project up into segments and award the contract to various interested parties just to complete the network.