Public-Private Partnership Center

The Asian Development Bank (ADB), acting as co-advisor to the Philippines for its establishment of a $3.8 billion North-South Railway, said the government may start accepting tender offers for the country’s largest public-private partnership (PPP) project during the current quarter.

The Manila-based lender and its co-advisor, the Development Bank of the Philippines (DBP), said a team is conducting a feasibility study on the 653-kilometer rail line that is to be built from Manila through Legaspi City down to Matnog in the far south of the main island of Luzon, and to Batangas in southwest Luzon.

“We expect to start tendering the project very soon … within the second quarter. The tendering is a multi-stage process, which includes the initial invitation to prequalify and bid,” said Pratish Halady, PPP specialist at the ADB.

In a press briefing on Friday, the ADB announced it has signed an agreement with the DBP to provide joint advice to the Department of Transportation and Communications (DOTC) on the PPP structure and bidding process for the project.

Signed on Thursday, the agreement marks ADB’s first transaction advisory service in the Philippines and its first in the transport sector.

The project seeks to “transform the South Line of the North-South Railway into a dynamic commuter and long-haul service.” Commuter rail operations will be upgraded for the 56 kilometers from Manila to Calamba. The line is intended to connect seamlessly with existing and planned light railway and metro rail transit lines in Metro Manila.

The PPP project is also expected to improve long-haul and commuter stations, repair bridges, and modernize signaling and fare collection systems. In addition to designing and building the railway, the winners of the PPP concession will also operate and maintain the South Line for 30 years, an official statement said.

Ryuichi Kaga, head of ADB’s Office of Public-Private Partnership considers the North-South Railway project as the backbone of transport in the Philippines, noting that swifter links between the southern provinces and the capital city will mean more people can reap the rewards of the country’s strong economic growth.

The project is also considered as one of the 15 key projects for connectivity to the Association of Southeast Asian Nations (Asean).
“As a major part of the Asean transport web, the project will also help connect the Philippines better to the rest of the region,” Kaga said.
Halady stressed that as a high profile Philippine project, the North-South Railway requires significant international sponsor and financier participation.

“It is also a testament of the progress that we have seen in the Philippines and its PPP program, as well as the PPP Center and the DOTC,” he said.

15 May 2015
By Mayvelin C. Caraballo