DOTr studies new Mindanao railway, seeks lender 

The Department of Transportation (DOTr) is set to update the feasibility study on the Mindanao Railway Project (MRP) to finally onboard a lender for the project’s development two years after the Marcos Jr. administration backed out from a Chinese financing deal, according to a report by Manila Bulletin.

Transportation Undersecretary Timothy John Batan said the agency has been working to secure a new development partner to finally kickstart the construction of the MRP.

Batan said the DOTr has been hearing insights from interested parties for the project, but these fail to pan out due to concerns that the feasibility study, which lenders use to gauge the project’s value, is now outdated.

The feasibility study for the MRP’s first phase—which covers the railway from Tagum City, Davao del Norte, to Digos City, Davao del Sur —was completed during the first half of the Duterte administration.

The DOTr has since tapped funding from Manila-based multilateral lender Asian Development Bank (ADB) for the updating of the feasibility study.

“Now that we are talking to alternative development partners, one of what they are looking for from us is an updated feasibility study,” Batan said during the agency’s budget hearing on Thursday, Sept. 4.

The undersecretary said this new study will cover the recently completed pre-feasibility study on MRP’s third phase, which was earlier moved forward to the second phase.

In particular, the study will transition to pre-feasibility to a full-pledge feasibility study, which is the more detailed outline for the project.

The update second phase of the project covers Laguindingan Airport in Cagayan de Oro City to Villanueva in Misamis Oriental.

“The feasibility study for phase one and phase two, and that is what we will use as a basis for our continuing discussion with other development partners,” said Batan.

Batan noted that among the interested development partners for the project include the ADB, France, India, and South Korea.

The DOTr will offer the MRP’s feasibility study for bidding among interested consultants within the second half of the year.

The conduct of the study is expected to begin in the mid-2026, with a completion target in the first half of 2027.

The Philippines withdrew its request for official development assistance (ODA) from China in 2023 due to the project’s slow progress and concerns involving high interest loans, on top of the ongoing dispute between the two countries in the West Philippine Sea.

Failure to sign a new agreement after three years compelled the Department of Budget and Management (DBM) to earmark zero funding for the MRP in the DOTr’s proposed budget next year.

The DOTr initially proposed a %u20B15.46-billion budget for the railway for right-of-way (ROW) acquisition.

The DBM, however, has set aside %u20B11 billion of unprogrammed appropriations (UAs) in case the DOTr finalizes a new agreement with a lender until next year.

UAs, which are only released when the government collects additional revenues, has been earmarked %u20B1249.9 billion for next year.

The DOTr has a budget of %u20B1197.33 billion in the National Expenditure Program (NEP) for next year, a massive 63-percent dip from the agency’s request to the DBM of %u20B1531.74 billion.

Alongside the MRP, projects that received zero funding include Light Rail Transit (LRT) Line 2 East Extension, Metro Rail Transit (MRT) Line 4, South Long-Haul project, among several other big projects.

DOTr Acting Secretary Giovanni Lopez has called on lawmakers to raise the agency’s funding, including key transportation projects, as part of his push to significantly ease the commuting experience for Filipinos.

“Hopefully you can increase our budget to include some equally important projects that were not included in our NEP,” Lopez told the House committee on appropriations.