Low interest rates were also cited as a factor behind choosing Japan over China. Besides, all creditors spread their risks and fund other projects elsewhere instead of pouring resources in just one place. The economic principle that having more sellers works to the buyer’s advantage is as true in infrastructure as it is in other settings. Such rivalry also diminishes the market power and leverage of a traditional dominant partner and enhances the host country’s bargaining position. The entry of new players compels established ones to offer better terms in light of competition. In fact, Japan’s and the ADB’s current exposure with the Metro Manila Subway and the Calamba-to-Clark North-South Commuter Railway (NSCR) raised concerns about their ability to underwrite other flagship projects. However, given the country’s burgeoning infrastructure needs, working with more – not fewer – partners is better. The Japan-led Asian Development Bank (ADB), another key funder of numerous projects in the Philippines, is also headquartered in Mandaluyong in Metro Manila. This is understandable given Japan’s long track record in the country and Tokyo’s time-honored position as the Philippines’ top donor.
Two weeks ago, several senators expressed a preference for Japan building the country’s railways. But this assumes Manila does not miss the train again.
This would place it not far behind the region’s burgeoning rail buildup. The country foresees substantial completion of the three rail lines before Marcos leaves office in 2028. With Manila renewing negotiations for the three railways, the country may no longer be Southeast Asia’s odd man out in terms of excluding China as a partner for railway work. Thus a decade since Manila terminated Northrail, China had become an engine powering regional connectivity. It is also building Indonesia’s Jakarta-Bandung High-Speed Railway, which will be Southeast Asia’s first and is slated for completion next year, and Malaysia’s East Coast Rail Link, expected to be done by 2026.Ĭhina is also in talks with Thailand and Myanmar for similar rail deals. This engineering marvel became a key showcase of China’s massive BRI.īeijing also completed Vietnam’s first metro line last year. It is directly linked to Kunming, capital of southwestern China’s Yunnan province, via the Yuxi-Mohan line. The US$5.9 billion, 422km undertaking features 75 tunnels that run for 198km and bridges that span 62km. Last year, China delivered Laos’ railway after just five years of arduous work in the mountainous northern part of the landlocked country. Unmatched railway costs-per-kilometer and the astonishing speed with which it completes projects make China a powerhouse in the global rail sector. This excludes railway projects abroad, especially after the roll-out of its Belt and Road Initiative (BRI) in 2013. Since 2008, it also laid out 37,900km of high-speed rail courses. China and rail sectorīetween 20, China constructed 9,485km of standard railways at home – an average annual growth rate of 1.07%. Indeed, much has changed since the Philippines walked away from a project that could have linked Manila with Clark, a bustling economic hub that hosts an international airport in the central region of the main island of Luzon.
It has developed world-class engineering and technical capacity, and its financing now is competitive with prevailing standards. Manila’s desire to enlist a new infrastructure partner is driven by several factors. It wants to address its huge connectivity gaps, catch up with its neighbors and leverage public works as a stimulus to fuel recovery from the Covid-19 pandemic.Ĭhina will enter the Philippine railway scene brimming with confidence. And it might do so in a grand fashion, simultaneously executing three railways with a combined length of about 739 kilometers, more than nine times that of the Northrail project it lost in the past. Thus, after a botched rail deal in 2003, China is at the cusp of finally breaking into the Philippine railway sector.
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