[Cancelled] China Eximbank provides $219.78 million preferential buyer's credit for Project Management Consultancy of the Philippine National Railways South Long Haul Project

[Cancelled] China Eximbank provides $219.78 million preferential buyer's credit for Project Management Consultancy of the Philippine National Railways South Long Haul Project On October 20, 2016, China Eximbank and the Government of Philippines signed a Memorandum of Understanding (MoU) on financing cooperation.

Then, on September 12, 2017, the Government of Philippines’ National Economic and Development Authority (NEDA) Investment Coordination Committee approved the Project Management Consultancy of the Philippine National Railways South Long Haul Project.

Approximately one year later, on August 29, 2019, China Eximbank and the Government of Philippines signed a USD 219,776,242.63 preferential buyer’s credit (PBC) loan agreement [NO.1420103022019211444 CHINA EXIMBANK PBC 2019 NO.9 TOTAL NO.492] for the Project Management Consultancy of the Philippine National Railways South Long Haul Project.

The PBC was scheduled for disbursement in four separate tranches to support four components of the consultancy contract. The first tranche of USD 68,043,275.33 was scheduled for disbursement in 2019-2020. The second tranche of USD 99,333,958.50 was scheduled for disbursement in 2021-2022. The third tranche of USD 39,341,504.56 was scheduled for disbursement in 2019-2020.

The fourth tranche of USD 13,057,504.24 was scheduled for disbursement in 2025 or later.

After President Ferdinand Marcos Jr. assumed office in 2022, he ordered renegotiation of a few loans secured under his predecessor, including the loan for the National Railways South Project. However, negotiation was unsuccessful. The Felipino government set a deadline for China Eximbank to approve its loan application for the project by May 2022.

As China Eximbank did not approve the loans, the Felipinos considered the loan agreements for projects are "now considered withdrawn" according to Philippines DOTr Undersecretary for Railways Cesar Chavez. The Phillippine government is seeking alternate funding for the project. In April 2025, France reportedly expressed strong interest in stepping in as key financier.

Discussions involving Japan, South Korea and India are also ongoing.

The proceeds of the PBC are to be used by the borrower to finance 81% of a PHP 14,380,420,814 commercial (consultancy) contract signed on November 17, 2018 between the Philippines’ Department of Transportation and a consortium consisting of China Railway Design Corporation and Guangzhou Wanan Construction Supervision Co.

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The consultancy contract has four components: (1) Project Design, (2) Procurement and Tender Assistance, (3) Project Management, and (4) Construction Supervision.

The services to be rendered by the Project Management Consultancy cover the detailed engineering and design; preparation of the terms of reference (TOR) and bidding documents for a ‘Design and Build’ procurement for the civil works, rolling stock, and electromechanical system; and the construction supervision.

The Project Management Consultancy will also provide tender assistance, which includes, among others, the market study, administration of the ‘Limited Competitive Bidding’, and tender award to the contractors and suppliers.

The Philippine National Railways (PNR) South Long Haul Line will run for 653 km, connecting Metro Manila with the Bicol region.

The project involves the complete reconstruction of the legacy PNR railway into a single-track (initial), at-grade railway.

In order to ensure seamless interoperability for the entire Philippine railway network, ETCS signaling standards have been adopted for PNR Long Haul and for all railway projects integrated with the network.

Construction of a 653 km rail line will traverse the following sites: (a) Manila, (b) Los Baños, Laguna (c) Lucena, Quezon (d) Gumaca, Quezon, (e) Naga, Camarines Sur, (f) Legaspi, Albay, (g) Sorsogon City, Sorsogon, (h) Matnog, Sorsogon, and (i) Batangas City, Batangas. The PNR South Long Haul Line Project is expected to be divided into the following segments (as per DOTr Reference No.

PB18-237-8): Segment A is from Manila to Naga, Camarines Sur Segment B is from Naga to Legazpi, Albay Segment C is from Legazpi to Matong, Sorsogon Segment D is from Calamba, Laguna to Batangas Port, Batangas.

China Railway Design Corporation (previously known as the "Third Railway Survey and Design Institute Group Corporation”) and Guangzhou Wanan Construction Supervision Co. Ltd are the contractors responsible for implementation. In August 2020, China Eximbank apparently disbursed the first tranche of the PBC.

Then, on November 17, 2021, the Department of Budget & Management declared that the consortium of China Railway Group Ltd, China Railway No. 3 Engineering Group Co., LTd and China Railway Engineering Consulting Group Co. Ltd were the Single Calculated Responsive Bid for the Design & Build Contract for the PNR South Long-Haul Project.

Then, on January 17, 2022, the same consortium of Chinese firms signed a commercial contract with the Philippines’ Department of Transportation (DOTr) for the design, construction, and electromechanical works for the first 380 kilometers of PNR South Long Haul (also known as PNR Bicol).

This contract is expected to be financed with the proceeds from a separate Chinese Government loan or grant (‘ODA’).