ILOILO City – With many potential investors, the state-owned Panay Railways, Inc. (PRI) is optimistic that the revival of Panay Island’s railway system will materialize.
Ten foreign investors have expressed interest in doing the work.
“They are from Turkey, the United States, Saudi Arabia, Japan, England, and China,” said Cesar Capellan, Panay Railways, Inc. (PRI) chief operations officer.
This Jan. 15, the investor from Istanbul, Turkey will be meeting with PRI officials here and Mayor Jerry P. Treñas.
Capellan said the visit was originally planned for December 2022 but was postponed due to the holidays.
He is hopeful that the visit will result in the signing of a memorandum of undertaking (MOU) between the investor from Turkey and PRI, outlining the responsibilities of both parties.
If this is accomplished as soon as possible, a feasibility study may be conducted, and the results will be forwarded to the National Economic and Development Authority (NEDA) Region 6 for further viability study.
But while Capellan is optimistic, he also said the process would take time. Unsolicited proposals for Panay railways’ revival have to undergo a Swiss challenge.
A Swiss challenge is a form of public procurement that requires a public authority that has received an unsolicited bid for a public project or for services to be provided to the government to publish the bid and invite third parties to match or better it.
Capellan also said the project would most likely be done through the public-private partnership (PPP) – build-operate-and-transfer (BOT) scheme.
Under the BOT scheme, the investor will be given 25 to 50 years to operate the railways.
The contractor undertakes the construction and maintenance. It shall operate the facility over a fixed term during which it is allowed to charge facility users appropriate charges sufficient to enable the contractor to recover its investment, plus a reasonable rate of return thereon.
Capellan said the revival of Panay railways would need an estimated US$1.5 billion just for Phase 1 which covers the 117 kilometers of railway tracks from Iloilo City to Roxas City.
“Phase 1 includes civil works, locomotives, human resources, and relocations, among others,” said Capellan.
Panay railway’s original route was 117 kilometers long and included 19 permanent and 10 flag stations. It connected the then-towns of La Paz and Jaro (now districts of Iloilo City); Pavia, Santa Barbara, New Lucena, Pototan, Dingle, Dueñas, and Passi City in Iloilo; and Dumarao, Dao, Panitan, Cuartero, and Loctugan in Capiz. It reached Roxas City.
Capellan said the revived railway system will have an expanded area of coverage. Phase 2 will see the construction of new railway routes from Roxas City to Kalibo, Aklan, going to Caticlan in Malay, Aklan.
Phase 3 will cover the new railway route from Caticlan, Malay, Aklan to San Jose, Antique; and Phase 4 will cover the new route from San Jose, Antique to Iloilo City via Iloilo province’s San Joaquin and Miag-ao towns.
In July last year, President Ferdinand Marcos Jr. announced in his first State of the Nation Address (SONA) he wanted to revive the railway systems in the country.
The Panay railways started operating in 1907. In Iloilo City, its trains ended at the passenger terminal along the wharf next to the Customs House and near where the current Iloilo City Hall stands. Trains ran across what is now the Drilon Bridge from La Paz and down the banks of the Iloilo River to Muelle Loney at the Port of Iloilo.
However, operations ceased in 1983 due to mounting losses./PN
