PH to Ramp up Investments in Rail, Aviation and Maritime Transport

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PH to Ramp up Investments in Rail, Aviation and Maritime Transport 83 INFRASTRUCTURE PH to ramp up investments in rail, aviation and maritime transport The Department of Budget and Management (DBM) said 2019 marks the start of the government’s heavy investments in improving mass urban, aviation and maritime transport infrastructure. This is seen to improve seamless transport within the country which will help enhance economic activities in emerging growth centers. ut of all the key departments, the DBM said the Department of Transportation (DOTr) will have the biggest increase in the 2019 national budget., The ODOTr’s budget will receive an increase of 89.3% to P76.1 billion, P35.9 billion more than the 2018 allocation of P40.2 billion. This will cover the payments for right-of-way access and resettlement, to avoid delays and complications in the implementation of infrastructure projects which will improve the availability and access to rail, air, and sea transport. Overall, the total budget for the Build, build, build program is P909.7 billion, equivalent to 4.7% of the GDP and 24.2% of the total 2019 budget. The DOTr proposes to extend the Philippines’ railway footprint to up to 2,000 kilometers (km) from the current 77 km. For 2019, the government gave the biggest allocation for rail transport projects with P24.59 billion. (see figure on the List of Rail Transport Projects for 2019). loans from the Japan International Cooperation Agency (JICA). Currently, the DOTr is moving forward with the selection of a The first batch of railway projects for 2019 is seen to Japanese contractor who will begin the PNR North 1 railway enhance economic activities in the emerging growth centers by the end of 2018. in the North-South direction. Two of the projects will be part of the North-South Railway Project that will cover 110 km of Another project is the PNR South Commuter line Phase 2. commuter lines stretching from Malolos, Bulacan to Tutuban, This is a 72-km commuter line which will run from Solis to Los Manila in the North, and Solis Tondo, Manila to Los Baños, Baños that will cut travel time between Manila and Calamba Laguna in the South. to 1 hour from the current 2 hours a day. According to the DOTr, both Asian Development Bank (ADB) and JICA are The PNR North 1 Project is a 38-km commuter railway considering co-financing the South Commuter line project. that will cut travel time from Bulacan to Manila to around 35 minutes. This will be extended to the Clark Airport and New Both projects will be seamlessly integrated to serve as Clark City via the PNR North 2 and will reduce overall travel a feeder line to the upcoming Metro Manila Subway. It is time from Manila to Clark to less than an hour. The entire also complemented by similar projects made by the private project will cost up to P300 billion which is funded mainly by sector such as the Makati-BGC Skytrain and the Makati Philippine ANALYST INFRASTRUCTURE September 2018 84 INFRASTRUCTURE LIST OF RAIL TRANSPORT PROJECTS FOR 2019 Source: 2019 People’s Proposed Budget, DBM The government allotted a budget of P24.59 billion to railway projects for 2019 as part of their proposed 2,000-km increase on the country’s railway footprint. This will provide seamless transport between urban, residential and industrial hubs. intra-city subway. As of September 2018, the Makati-BGC investments and tourism in the country. These projects Skytrain is currently being reviewed by National Economic will also connect the country with emerging countries and Development Authority (NEDA) while the Makati intra- and fast-growing cities to help drive economic growth city subway by IRC Properties is waiting for the formal (see figure on the List of Air Transport Projects for 2019). awarding of the project from the local government of Makati. One of the key projects include the New Bohol (Panglao) Meanwhile, the government is also investing heavily International Airport Development which costs P754 in the country’s aviation transport infrastructure, with million. Dubbed as the “Green Gateway to the World,” this P2.16 billion budget. The DBM said that the budget for is the country’s first eco-airport which is up to par with the air transport will facilitate exports, foreign direct international standards in green and sustainable structure. LIST OF AIR TRANSPORT PROJECTS FOR 2019 Source: 2019 People’s Proposed Budget, DBM The aviation transport infrastructure projects in provincial areas will help spur economic development at a more equitable pace. It will also connect the Philippines with emerging countries and fast-growing cities to help drive economic growth. Philippine ANALYST INFRASTRUCTURE September 2018 INFRASTRUCTURE 85 LIST OF AIR TRANSPORT PROJECTS FOR 2019 Source: 2019 People’s Proposed Budget, DBM The overarching strategy for improving the country’s commuter and freight transport is to develop an intermodal transport network. This will ensure connectivity between industrial areas, major cities and rural areas. According to the DOTr, the airport is already 92.14% ADB approves loans and new CPS with PH complete as of July 2018. It is targeted for completion by October 2018. The airport will have a total area of 13,884 The Asian Development Bank (ADB)’s newly approved square meters, 3 boarding bridges, a baggage handling system, loans and country partnership strategy (CPS) seeks and an apron that can accommodate 7 aircraft at a time. to improve the Philippines’ infrastructure, spur local economic development and invest in its human capital. The government will then further expand the capacity of the This will allow the government to leverage resources Panglao airport in 2019, according to the Department of Finance. to achieve their transformative social and economic This is in anticipation of the congestion that may arise from tourism agenda. traffic in the area. Additionally, talks are underway with JICA for a supplemental loan to support the airport’s expansion. Once The Asian Development Bank (ADB) has approved finished, the airport is seen to replace the old Tagbilaran airport and activated a total of $484.3 million in loans and and will be upgraded to handle regional flights within the Asia grants for the Philippines last August 2018. The Pacific. It will accommodate about 2 million passengers annually, amount covered 4 specific projects in support of the compared to the 800,000 passenger capacity of Tagbilaran Airport. country’s efforts in infrastructure development such as the Expanding Private Participation in Infrastructure The government also included maritime transport infrastructure Subprogram 2; Railway Project Implementation Support for 2019, allotting P2.5 billion for these projects (see figure on and Institutional Strengthening; the Philippine National the List of Maritime Transport Projects for 2019). One of the Oil and Co. (PNOC) Batangas Liquefied Natural Gas projects in this sector is the New Cebu International Container Project; and the Flood Risk Management Sector Project. Port Project worth P221 million which will address the existing port congestion in Cebu. The NEDA said that the project The Expanding Private Participation in Infrastructure, has an estimated economic internal rate of return of 20.1%. Subprogram 2 was allotted $479 million. Of the total allocation, $300 million will be financed through the The overarching strategy for improving the country’s ADB’s Ordinary Capital Resources while the $179-million commuter and freight transport is to develop an intermodal loan will be coming from the French Development transport network. This was done through operating projects Agency. The executing agency for this program is the in rail, aviation, and maritime transport as an integrated and Department of Finance (DOF) while the ADB’s role is coordinated network. According to NEDA, this will promote sub- to provide technical assistance (TA). The program is regional cooperation which will ensure connectivity between expected to be completed in October 2019, but the industrial areas, major cities, and rural areas. For years, inclusion of a post-program partnership framework will institutions like the ADB and the World Bank have criticized the allow the government to use TA resources until 2022. Philippines for lacking a cohesive transport strategy. In a report, JICA noted that this has led to significant congestion-driven According to the ADB, this program is focused economic losses which amounts to P3.5 billion daily. The current on consolidating Public-Private Partnerships (PPP) efforts in rail, aviation, and maritime infrastructure projects reforms to stimulate and facilitate the development of through the Build, build, build program show that the country the Philippines' PPP market. It will also ensure that these has a clear vision in steering development across the region. earlier reforms are successfully implemented. It is expected to improve overall private participation in infrastructure development and help reach the target public spending Philippine ANALYST INFRASTRUCTURE September 2018 86 INFRASTRUCTURE The ADB approved a total of $483.3 million last August 2018 to help accelerate the government’s infrastructure program. Their biggest investment is on enhancing Public-Private Partnerships to help increase private sector participation in infrastructure development. equivalent to 7.4% of the gross domestic product by 2022. facilities, a power plant, loading or unloading area for LNG carriers, and supporting infrastructure that will improve the The ADB also gave priority to the Railway Project operations of the Philippine National Oil Company (PNOC). Implementation Support & Institutional Strengthening The project will be the 1st LNG project in the Philippines. with $2 million from the ADB’s Japan Fund for Poverty The finished facility will address the energy supply risk in the Reduction. The agency in charge of its implementation is country as well as reduce the need for fuel imports such as the Department of Transportation (DOTr).
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