Government Infrastructure News Analysis

Back on the rails

Manila-Clark Railway
Manila-Clark Railway

Anyone remember the NorthRail Project? You’re forgiven if you don’t; it goes back to 2003. Talking about it ran through two entire presidential terms – those of Gloria Macapagal Arroyo and Benigno “Noynoy” Aquino. Fourteen years of talking, disputing (Philippine courts got heavily involved of course; we can always depend on them for substantial delays), feasibility studies, plan revisions, imponderable right-of-way quibbling, political wrangling, stoppages, compensation disputes, budget over runs, abandoned negotiations, more feasibility studies, more plan revisions, cancellations and everything else that ubiquitously goes into the mix of failed industry for which government projects in the Philippines have traditionally been so renowned.

Well, finally, the present government has wrestled this troublesome project back on track and has promised to have what is now known as the Manila-Clark Railway – a rail link between the capital and the proposed Clark Green City in Pampanga – up and running by 2021 at the latest; one year before the end of Rodrigo Duterte’s term as president.

The history of this line is studded with bad management, soured corporate relations, broken contracts, financial anomalies, corruption and alleged corruption, unfathomable management decisions and a political will that ran hot and cold. Between 2003 and 2008, under Arroyo, the entire project was shunted into suspension, incurring further cost obligations. In 2012, under Aquino, it was scrapped once more amid renewed corruption allegations and lingering legal issues.

If NorthRail is a lesson in anything, it’s in how not to run a project. It was an on-again-off-again saga that careened from being a flagship enterprise of two presidents to a debt-trap before leaping the rails and ending up in a siding full of mothballs. It went from being a promising golden goose to an albatross to a white elephant; a trumpeted goal of two governments that turned to abject embarrassment.

On Monday, the last five stations in a chain of 17 which connect the system from Manila to Clark, were marked on a schematic by Transport Secretary, Arthur Tugade, at a ceremony which should draw a line under nearly a decade and a half of inertia, stubbornness, squabbling and gross mismanagement.

Leaving aside the poor execution, what Arroyo and later Aquino got right though is that this project was always going to be a vital piece of infrastructure. The 55-minute journey from Tutuban in Manila to Clark International in the Clark Freeport Zone – to be operated by Philippine National Railways (PNR) – is expected to serve 350,000 passengers a day in its first year of operation.

Taking that number of people off the roads going into and through Manila will provide immense relief to “Carmaggedon” as the traffic-snarled capital is irreverently known. It also provides a swift commute for tourists and travellers between Clark International Airport and the country’s capital and an efficient rail corridor feeding Clark Freeport Zone, a vibrant drive belt of commerce and light industry.

In 2011, the-then mayor of San Fernando, Pampanga’s provincial capital, described NorthRail as the “much-awaited missing link in the total development of Central Luzon”.

The 106-kilometer route will be serviced by 13 engine units each pulling eight carriages at a top speed of 75 miles an hour. Construction is scheduled to start around November.

The scheme, funded through Official Development Assistance made available from the Japan International Cooperation Agency (JICA), has a project cost set at PHP255 billion (US$5.08 billion). The original cost – leaving aside variations in the plans – had been US$503 million. This had ballooned to around US$1.3 billion and then to an estimated US$2 billion by 2012. Admittedly the current scheme is greatly expanded and more ambitious, but as an example of the cost of delays this will do until a better one comes along.

We believe this project is now in safe hands. Tugade knows this part of the country well and knows how to get things done there. As its CEO and president he purged Clark Development Corporation (CDC) – a unit of the government-owned Bases Conversion and Development Authority and the administrator of Clark Freeport – of its sluggish, corruption-laden culture and poor financial returns, transforming it into a dynamic operation with good governance and impressive profits.

He’s always known he’d have to do something similar here; as with CDC, Tugade inherited a basket case with the chopped-and changes NorthRail project. But under his leadership and supervision – as well as that of Public Works Secretary, Mark Villar – we don’t foresee the sloppy management of the past returning. Once more, this rail line is a flagship project of a Philippine president; but his time it’ll be delivered. In fact, he hopes to have it running by 2020, a year earlier than the JICA deadline for the rollout.

In a recent press release issued by the Department of Transport he said: “This big project; it used to be just all talk. But under the Duterte administration, we will make it into a reality. For the first time, a rail project will connect Manila to Central Luzon and it will be completed under the Duterte administration”.

Here are the 17 stations that form the Manila-Clark Railway. In Metro Manila: Tutuban (the main Philippine National Railway terminus in Tondo), Caloocan, Valenzuela, Meycauyan, Marilao, Solis. In Bulacan province: Bocaue, Balagtas, Guiguinto, Malolos, Calumpit. In Pampanga province: Apalit, San Fernando, Angeles, Clark, Clark International Airport, and the proposed Clark Green City. This line, when completed, will form a main transport artery though a highly populated region of Luzon, the country’s large northern island.

So what can go wrong? We are, after all, talking about something that’s been a millstone around the necks of two previous administrations.

We’re confident the system will be delivered on time, if not ahead of time. We also believe there’s unlikely to be any financial shocks in store as there were in the past; the budget’s been cast and will be tightly managed through to project delivery by Budget and Management Secretary, Benjamin M. Diokno.

But while the rail system has always been government owned – corruption aside for a moment – it’s regularly been strapped for cash. Hopefully, that’s now been remedied. Of the PHP3.35 trillion 2017 national budget, 10.6% (PHP355.7 billion) has been allocated to the development of the country’s transport infrastructure – that’s for everything, roads, seaports, airports and railways.

The one area where we have some reservations at this time is in the operation of the railway and the rail services. PNR – the state-owned rail company – has a long less-than-impressive history as a rail operator.

This company, under various incarnations, will be 125 years old this year – its birthday’s in November. But in all that time, it’s failed to make its mark. It’s not by any normal definition “National” – there are no commercial railway operations in the entire Visayas and Mindanao regions. As a national railway system it’s a joke. It’s barely even regional: PNR’s entire commuter operations comprise one rail service in Metro Manila, and local-line services between Sipocot, Naga City and Legazpi City in the Bicol Region.

If you add all that up it comes to slightly over 62 miles of track – in other words, it’s put on two miles of line each year since it started; taken from its inception as Philippine National Railways – the name change came in 1964; 53 years ago – it’s managed to increase its track by just over one mile a year.

The company had its heyday in the 1970s when it plied 680 miles of line between the provinces of La Union and Camarines Sur. But rampant neglect of rail and rolling stock; burgeoning squatter communities taking over the lines; mismanagement and corruption – that all-too-familiar cocktail of failure – and devastating damage done by violent weather systems, all took their toll. Two typhoons in 2006 virtually drew the shutters on the Manila-Bicol “Express” service which has been suspended since 2012. Only the local routes survived.

This is a pathetic record for a nationalised industry. And so, no matter how good the engineering; how state-of-the-art the infrastructure that’s going in, if the management of its services is allowed to degenerate as they have in the past; if officials and employees turn it once more into their personal gravy train; if rolling stock and rail line and stations are allowed once more to fall into disrepair; if mending typhoon-damaged line and railway infrastructure are slow tracked; if squatter colonies are again allowed to take over sections of the system and hold the government and the commuting public to ransom; the US$255 billion that’s being invested in the Manila to Pampanga line will have been for nothing.

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