MRAIL, ICTSI to invest P10B in cargo rail line

July 29, 2016 at 13:30

“In our discussions, we should be able to run the first service 24 months from the time we have the formal signing,” MRAIL President and Chief Executive Officer Ferdinand G. Inacay told reporters in a media briefing held yesterday.

The multibillion-peso project is a revival of ICTSI’s similar operations that carried freight from and to the ports of Manila International Container Terminal (MICT) and ICTSI-owned Laguna Gateway Inland Container Terminal (LGICT), which started in 1998 until operations were suspended in 2003.

As was the case with ICTSI before it closed operations of the railway, the project will be using track controlled by Philippine National Railways (PNR).

The company will also be rolling out two more phases that would eventually consolidate three ports in Luzon.

“[The first phase is] to connect Manila Port to Calamba. The next phase is Manila Port to Clark… And then the third phase is really to connect Clark to Subic and Calamba to Batangas,” he said, adding that the right to way of the Clark to Subic link is still under evaluation. There are no specific timelines for the second and third phases.

But for now, the railway subsidiary of Manila Electric Co. (Meralco) will focus on its planned freight transport operations from Manila to Laguna. Out of the P10-billion cost of the project, Mr. Inacay said that the company alloted P2.70 billion for capital outlay, involving 8 locomotives and 120 wagons.

Mr. Inacay said that the board of PNR approved the project in January this year. However, in the same month, the formal signing of the freight train track usage agreement between MRAIL and PNR was postponed, delaying a deal that would otherwise allow the company to rent the tracks to haul freight for 25 years.

Explaining the delay, Mr. Inacay said that the Office of the Government Corporate Counsel (OGCC) approved the transaction on April 28, a few days away from the May 9 election, which got the project caught up in the election ban; the transition to the new government was also a factor.

However, Mr. Inacay is “optimistic” that the signing will go through under the current administration, because of pronouncements by President Rodrigo R. Duterte and Transportation Chief Arthur P. Tugade in favor of rehabilitating national railways to decongest the capital and nearby regions.

“[With support from] the new administration… we’re just sorting out a few items which they want to include in the project… we have indications that in the first 100 days, [all of these will be addressed] and then we can have a signing,” he said.

Explaining the items recommended by the government, which included the rehabilitation of rail tracks, he said: “These are not show-stoppers. In fact, this is expanding what we intend to do.”

Moreover, Mr. Inacay said that there are environmental benefits from the project, aside from road decongestion.

“In a study conducted by the Ministry of Transport of Japan… a truck [generates] 150 grams of carbon emission per ton kilometer, whereas for rail it’s only 20. Actually 21 grams. Meaning to say that you reduce carbon emission in the city using the train system.”

“When this is operational, the number of trucks [hauling 40-foot containers] that you see on the road today, will be reduced by a minimum of 200 trucks per day to as many as 600 trucks per day… That’s going to provide a very significant benefit to our road system,” he said.

Meralco closed at P325.20, gaining P3.60 pesos or 1.12%. ICTSI rose 0.69% to P65.95.