Mindanao train on front and center after languishing in the back burner

BY MARIFI S. JARA AND CARMELITO Q. FRANCISCO

IT’S AN OLD IDEA — a Mindanao railway — dating as far back as the late 1930s after the Luzon rail was completed.

Then the Second World War came along and “it was put on the back burner,” National Economic and Development Authority-Davao Region Director Maria Lourdes D. Lim narrated, citing historical information based on government archives that are contained in the latest feasibility study for the Mindanao Railway System (MRS).

Rehabilitation of the Luzon rail was made a priority post-WWII and it wasn’t until 1957 that a train system for Mindanao, the country’s second biggest island after Luzon, was again considered.

A project study was undertaken by the Philippine National Railways (PNR), identifying a 1,570-kilometer (km.) track that would have required a P2.6-billion budget at that time.

It was probably the cost, but no one can say for sure now why the transport system was never pursued. It would remain shelved for more than three decades.

It was under former President Fidel V. Ramos, who started his six-year term in 1992, that the Mindanao
railway got back on the national government’s radar.

But more than two decades later, after numerous plans and studies under different administrations, the railway remained on the drawing board.

“In the past, we were never listened to; sometimes (the national government pretended listening but it was only lip service,” said Vicente T. Lao, chair of the Mindanao Business Council.

Ms. Lim explains that the way government works is that localities and regional agencies basically “compete” for funding and prioritization, particularly for big-ticket projects, and decisions are ultimately made at the national level with socioeconomic, technical as well as political considerations coming into play.

“It helped a lot when President Duterte won,” she said, referring to former Davao City mayor Rodrigo R. Duterte, the first from Mindanao to be elected president.

“And infrastructure investments are really a focus of this administration,” said NEDA-Davao Chief Economic Development Specialist Mario M. Realista.

TRAIN SYSTEM FINALLY TAKING OFF?

The Duterte government is looking to put up as much as P9 trillion worth of infrastructure projects from 2017 to 2022.

In June this year, the NEDA Board’s Investment Coordination Committee (ICC) approved three major railway projects with a combined cost of more than P532 billion.

Two are in Luzon: the P285-billion South Line of the North South Railway Projects and the P211.43-billion Malolos-Clark Railway Project, both planned for funding through official development assistance (ODA).

The third is Phase 1 of the MRS, a 102-km. track covering the Tagum-Davao-Digos (TDD) segment, with the P35.91-billion budget to be sourced from government funds.

Mr. Lao — who, like most in the Mindanao business community he represents has seen and been through a roller coaster of hopes and disappointments from government plans and promises — carries his optimism for the MRS with a grain of salt.

“This time, I hope it will get realized,” he said in an interview before the Department of Transportation (DoTr) announced in mid-August that the House of Representatives’ appropriations committee has already earmarked an initial P6.58 billion to jumpstart the MRS TDD segment.

Rep. Johnny T. Pimentel, a member of the appropriations committee who comes from the Mindanao province of Surigao del Sur, said he is glad to see the project “finally taking off and not being kicked around anymore.”

For the operation and management of the MRS, the House committee on government enterprises and privatization and committee on transportation jointly approved earlier this year several bills, which all seek to create the Mindanao Railways Corp. (MRC)

“The (MRC) bill was originally filed in 1987, during the 8th Congress. It was continuously refiled in the succeeding Congresses, but always failed to reach the Plenary. But now in the 17th Congress, with our President coming from Mindanao and the proposal being among the top legislative agenda of the House, the long-awaited dream may come true with the construction and operation of the Mindanao railways system,” Mr. Sarmiento said.

Senator Juan Edgardo “Sonny” M. Angara, chair of the ways and means committee, said he understands that the MRS is a dream come true for Mindanao’s people.

“A train system can be a ticket out of poverty for many of them. Cheap, reliable and fast movement of goods would increase incomes and value to products,” Mr. Angara said, “It is also a driver for peace because as communities become interconnected, economies are linked, growth spreads, and travel brings cultural exchanges.”

Mindanao’s dream would come at a cost, not just in terms of capital expenditure but also in the first decade of operations.

Based on the NEDA Secretariat’s assessment, the TDD segment would need an average of P290 million in government subsidy for the first 10 years of operations. Construction is scheduled to start by 2018 and completion within two years.

Romeo M. Montenegro, deputy executive director of the Mindanao Development Authority (MinDA), said while the first track of the MRS won’t be immediately profitable, the “long overdue” project should be seen more as a “catalyst for Mindanao’s growth”.

STARTING IN THE SOUTH

The Tagum-Davao-Digos segment within Davao Region, located in the southeastern part of Mindanao was recommended to become the starting point for construction — rather than the Iligan-Cagayan de Oro section in the Northern Mindanao Region as considered in earlier plans — given the “high sectional volumes” in terms of passenger and cargo traffic.

Davao Region’s gross regional domestic product (GRDP, at constant 2000 prices) was higher in 2016, as in the two previous years, at P333.02 billion against Northern Mindanao’s P305.45 billion. In terms of GRDP growth rate, Davao has also been faster at 9.4% compared with Northern Mindanao’s 7.6% last year.

The TDD segment was also considered for its connectivity to the growth areas of General Santos City, Koronadal City, and Cotabato towards the east, and San Francisco, Butuan City, and Surigao City towards the northwest.

Mr. Montenegro, who has been with MinDA and its predecessor Mindanao Economic Development Council since 2001 and been part of the MRS discussions over the years, said the government has to put in infrastructure and transportation systems to encourage private investments, especially in areas that have been neglected.

“With a better transportation system, there will always be someone who will take advantage, to explore areas never been explored,” he said.

While only Phase 1 of the MRS has so far been included in the government’s “Build, Build, Build” priority list, the Duterte administration aims to have at least the funding in place, possibly all through ODA, for the rest of the rail segments.

NEDA Director-General Ernesto M. Pernia has said that China and Japan have expressed interest in the MRS.

Based on the MRS Development Framework, the train system will have an 830-km. main loop and 702 km. in spur or branch lines.

The main circumferential line, aside from the TDD, is composed of the following segments:

Butuan-Nabunturan-Tagum (208 km.)

Iligan-Cagayan de Oro-Butuan (285 km.)

Digos-Iligan (234 km.)

The spur lines are:

Butuan-Surigao (109 km.)

Kabacan-General Santos (141 km.)

Iligan-Zamboanga (338 km.)

Iligan-Dipolog (114 km.)

Cost for each of the planned segments has yet to be determined.

The TDD — the shortest segment at 102 km., with eight stations, one terminal in Davao City and a depot that will be built on a 10-hectare area in Tagum City — will have an average cost of P343 million per km. Using the TDD average as reference, the entire 1,532-km. Mindanao railway would need an investment of about P526 billion.

“What we (in government) have to look out for is the enabling environment and conducive policies to do business here… This (MRS) is a demonstration of the commitment to address infrastructure support. Mindanao has really been behind in competitiveness in terms of infrastructure,” Ms. Lim said.

Mindanao’s six regions — Zamboanga Peninsula, Northern Mindanao, Davao, Soccsksargen (South Cotabato, Cotabato, Sultan Kudarat, Sarangani, General Santos), Caraga, and the Autonomous Region in Muslim Mindanao — had a combined 14.3% contribution to the gross domestic product in 2016. This is in comparison to the regions where the two other railway projects approved by NEDA-ICC are located: the National Capital Region contributed 36.2%, Central Luzon with 9.3% and Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon) with 17.2%.

Ms. Lim said the goal is to boost intra-Mindanao commerce as well as exports through complementing industries among the regions.

PEACE AND ORDER ISSUES REMAIN

As for security concerns, the feasibility study on the TDD segment notes that the Digos-Cotabato-Iligan section is considered to have peace and order issues, which is why it has not been recommended for immediate implementation. “It is hoped that in time, the current situation shall improve,” the study said.

For the TDD, Ms. Lim said the Davao Regional Development Council, where she sits as vice-chair, has already undertaken initial coordination with the security sector, and the military’s 10th Infantry Division has committed to create a special task force to look after the project once it gets rolling.

Secretary Datu Abul Khayr Dangcal Alonto, chair of MinDA, said in November last year that the MRS is intended to serve as a uniting tool for Mindanao.

The Marawi City-born Mr. Alonto, the first Muslim to head MinDA, said not even the crisis in his birth town should deter development programs in Mindanao.

“We cannot let terror, lawlessness, and violence shatter what we have built for Mindanao all these years. We call on our fellow Mindanawons to stay the course – be vigilant, but continue to be warriors of peace by spreading hope not fear,” said Mr. Alonto, who also served as chair of the former anti-government group Moro National Liberation Front.

Back in November, he said, “If a person can have his breakfast in Zamboanga, eat his lunch in Iligan, then dinner in Davao, that is the one, connected and united Mindanao we envision. That is home.”

Marifi S. Jara is BusinessWorld’s Mindanao bureau chief and Carmelito Q. Francisco is BusinessWorld’s Mindanao correspondent.