Cost of Mindanao Railway Phase 1 jumps by 130% to P82.9 billion

MANILA, Philippines – The National Economic and Development Authority (NEDA) Board's Investment Coordination Committee-Cabinet Committee (ICC-CabCom) approved a massive price increase for Phase 1 of the Mindanao Railway project to cover the changes in cost of construction works.

In a statement on Monday, July 15, NEDA said it approved a 130% cost increase to P82.9 billion from the previously approved cost of P35.9 billion.

Phase 1 will traverse Tagum City, Davao City, and Digos City, spanning over 100 kilometers. It aims to reduce travel time from 3.5 hours to just 1.3 hours. (READ: Will Malacañang look into Mark Tolentino's Mindanao railway allegations?)

A satellite depot in Davao City was also approved for Phase 1, further adding to the cost.

Based on the government's timetable, construction is expected to start in the 3rd quarter of 2020. The railway will be up and running by 2022.

Socioeconomic Planning Secretary Ernesto Pernia previously told reporters that the project would be funded by China, but no deal has been struck yet.

The ICC-CabCom also approved a cost increase for the Metro Manila Priority Bridges Seismic Improvement project from P4.3 billion to P7.9 billion, an 83% increase.

This would cover the technology to be used for the Guadalupe Bridge in Makati City, the putting up of temporary detour bridges in Guadalupe, and an additional work shift to reduce the construction period, among others.

The committee also noted the inclusion of a project management consultant with a cost of P14.39 billion in the scope of works for the Philippine National Railways South Long Haul project.

"We see changes in scope and cost as opportunities to optimize the project components and update the estimates. The government aims to speed up implementation while ensuring quality," Pernia said.

They also approved the following changes in other infrastructure projects:


Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.