India back in the mix as railways financier

MANILA, Philippines — India is back in the mix as a potential backer of the Philippines in reviving the Bicol Express and in building Mindanao’s first railway that would require a combined P257 billion in funding.

Acting Transportation Secretary Giovanni Lopez yesterday said his agency is considering India to fund the Philippine National Railway (PNR) South Long Haul and Mindanao Railway Project (MRP).

“When we were in India with the President, part of our discussions with the government of India was if they found it interesting to invest in the Bicol South Long Haul and MRP,” Lopez said on the sidelines of the Economic Journalists Association of the Philippines Infrastructure Forum.

Lopez said the Department of Transportation (DOTr) prefers a government-to-government deal in funding the two railways. This is why India, alongside France, is being considered as a financing partner.

India was floated as an alternative funder for the two projects when talks with China collapsed in 2023.

However, over the years, India vanished in the conversation as the Philippines pitched the railways to traditional partners like France and the US.

India’s rail system is managed by state-owned operator Indian Railways, which is in charge of an infrastructure network of more than 42,000 miles.

In 2022, Indian Railways transported about eight billion passengers and 1.4 billion tons of cargo through its portfolio of 13,000 passenger trains and 8,000 freight trains.

Based on data from the International Trade Administration, Indian Railways is estimated to land up to $715.41 billion in investments until 2030.

Lopez said the DOTr is open to receiving fresh offers from multilateral partners.

The DOTr is bent on landing a new funder to get the PNR South Long Haul and MRP back on track.

The railways were supposed to be backed by China. However, President Marcos withdrew their loan applications in 2023, reportedly due to disputes with Beijing over interest rates.

The PNR South Long Haul, requiring P175.32 billion, will span 557 kilometers between Sucat, Muntinlupa and Matnog, Sorsogon, mirroring the old line of the Bicol Express.

The first phase of the MRP, on the other hand, costs P81.79 billion, providing Mindanao its first railway with trains operating between Tagum, Davao del Norte and Digos, Davao del Sur.