Railways Philippines 2012 A Presentation for the American Chamber of Commerce By Rene Santiago, Managing Director, Bellwether Advisotry Inc. 29 February 2012
Outline of Presentation Introduction • Why the interest on rail • Historical context Intra-urban Rail lines • Lines 1 and 2 and proposed Extensions • MRT 3 and upgrade • MRT 7 • Others (BRT, Monorail, Cebu MTS) Inter-urban rail lines • PNR Main Line South (existing • PNR Commuter South • Northrail • Panay Railway • Mindanao Railway Conclusions and Q&As
1 - Introduction Rail in Manila‟s history Electric Tramway, 65kms in 1905 and 85 kms by 1925 Ridership: 35,000 per day in 1906, and 126,000 in 1920: MERALCO: an American company w/50-year franchise, owned and operated the electric tram, up to 1945. Closure of rail after WW2, gave rise to jeepneys Like other cities in many countries, the emergence of automobiles in the 1920s led to the decline of railways, and/or government takeover
1 - Introduction Antecedents of PNR• General plan for Railways in Luzon prepared in 1876, with the Ferrocaril de Manila-Dagupan opened in 1892 Built via a concession granted to Dagupan Station Manila Railway Company Ltd (a British firm), w/guaranteed 8% ROI At its peak,1,140 kms operational line; managed by a SOE that was a model of corporate efficiency Tutuban Station Source: Iwata, Shizuo, “Development of Public Transport in Metro Manila, Philippines”, 1993.
1 - Introduction Why the interests on rail? USA not a global rail supplier/exporter (except, perhaps in locomotives) Philippines railway sector is "small fish in a big ocean" 50-km urban rail lines, less than 10% of daily trips in MManila 422-km Main Line South (Bicol); 2 trips/day on Mnl-Naga (today) Special emphasis on High-speed Rail in "Arangkada Forum“ Very few countries can justify HSR USA still in the throes of heated debates; Acela Express nearest to HSR Nostalgia, for the grand railroads of yesteryears?
2 – Intra-Urban Rail Rebirth of Rail in Manila • 1972 Study -proposed a system of expressway and railway network (ala Tokyo), including 135.1 km of subway • 1977 MMETROPLAN study, recommended street-level tram car along Rizal and Taft Avenue • 1979 - Decision to build LRT Line 1, 15- km, fully-elevated • 1984 - Partial operation of Line 1 • 1985 - Metrorail Network Study, proposed LRT Lines 2, 3 and 4 • 1989 - Failure of BOT bidding for Line 2 • 2001-02 – Opening of Lines 3 and 2 Premised on the belief that a large metropolitan area can only be sustained by rail, and that urban transit is the business of government
3 – Intra-Urban Rail Metro Manila Rail MRT-7 (22-km)5.4-km North Loop was Contract signed in 2009;completed in 2010; but Oct 2010 expiry extended;interface with MRT-3 still Concession flipped 2x;unfinished Currently in holding pattern LRT-2 East (4-km) 3 F/S since 2006, could‟ve been tendered in 2008; JICA F/S in 2011, per DOTCLRT1-SEP (12-km) request;2002: construction was On-going study (again!)supposed to start (SNC-Lavalin contract)2006: PPP implementationper IFC study, aborted2009: Unsolicited proposal MRT-3 (17-km)via JVA •Frequent system2010: DOTC study to breakdown, due to overloading;merge with MRT-3 & bid •MPIC proposal toout O&M takeover, double capacity, &2011: Service contract for upgrade system in limboOM&R2012: ???
3 – Intra-Urban Rail Flavor of the Month for LRT-1 SEP Project Cost ~Php59 Billion •June 2012 tender, via so-called “Hybrid” PPP •CW to be funded & built by private investor •Rolling Stock & Satellite depot via ODA (hence, gov‟t) •30-year Concession, Fares adjustable with CPI •Winning bidder takes over line management, from start
3 – Intra-Urban Rail Other Mass Transit Projects No study (pre-fs or FS) yet; Maybe, 2026 Unsolicited proposal (B-O-O) of Ayala Land for a BRT System on Ayala Avenue presented to DoTC in Oct 2011; no response BRT System for MetroCebu and Davao City 2009 study and proposal, backed by IBRD
3 – Provincial/Inter-Urban Rail Decline of inter-urban railways Manila-Clark (Northrail) •10% accomplishment from 2006-2010Main Line North •Works suspended since 2010closed in 1984 •Impasse with Sinomach, likely to follow the T-3 fiasco Main Line South (448-km from Mnl- Naga) Operations ceased in 2006 due to typhoon- induced damage Re-opened in 2011, 2 trips/day Rehab plan ~Php29 billion
3 – Provincial/Inter-Urban Rail “Zombie” Railway Projects Reviving a 1985 „carcass‟ The Mindanao Railway fantasy
4 – Conclusions Concluding Remarks Expect no acceleration in project implementation • But, miracles do happen (rarely) Absence of a coherent and sustained rail policy • LRTA and PNR are financially bankrupt; financial re-structuring plans unacted, for more than 10 years already • Toxic environment for rail to flourish and thrive (e.g., amateurs at the helm, low fares, poor maintenance, etc.) High Interests on rail from ODA & Private Sector • Lending portfolio of ADB (strategy 2020) for urban transport to scale up by 5x in 5 years • Big players (SMC, Ayala, MPIC, foreign investors, etc) on-the-prowl for opportunities [Texan saying:“Big Hats, No Cattles”]