North-south commuter railway will require P5-B subsidies–Neda

FILIPINO taxpayers need to extend an average of P5 billion worth of subsidies for the North-South Commuter Railway (NSCR) System approved by a Cabinet panel, according to the National Economic and Development Authority (Neda).

Apart from the subsidy, the Investment Coordination Committee (ICC) Cabinet Committee (CabCom) last week also recommended to the Department of Transportation (DOTr) the generation of additional revenues on account of the 76-percent increase in the project’s cost.

With the change in scope of the project, the total cost of the NSCR, a project of the DOTr and Philippine National Railways (PNR), increased to P777.55 billion, from P440.88 billion. The project is funded by loans from the Japan International Cooperation Agency (Jica) and the Asian Development Bank (ADB).

“The government will subsidize an average of P5 billion per year to cover capital, operating and renewal costs of the project—an investment that is expected to generate substantial economic activity, create more jobs, increase incomes and deliver a more comfortable commuting experience,” the Neda said in a statement.

“The DOTr was instructed by the Committee to implement measures that would allow the national government to maximize non-farebox revenues, such as incremental taxes from increased property value through revenue-sharing arrangements with concerned LGUs and through the development of national government properties in the project area,” it added.

The increase in project cost is attributed to three factors as determined by the detailed engineering designs, such as the shift to elevated viaducts instead of at-grade structures to improve operational efficiencies and safety.

The Neda said factors pushing up costs include the adoption of standard gauge instead of narrow gauge, in compliance with government standards to ensure seamless operations for all sections; and the increase in the number of trains and change from single to double tracks for the Malolos-Clark Railway Project (MCRP).

The cost will also cover resettlement activities, meeting the social and environmental safeguards of the ADB and JICA. This will also ensure proper housing and welfare support for around 12,901 affected informal settler families.

The project will bring together the NSCR Phase 1 (Malolos-Tutuban), the PNR South Commuter Railway (Solis-Calamba) and the MCRP, creating a 147-kilometer elevated, double-track and seamless connection from Clark International Airport to Los Banos, Laguna, with 36 stations.

The NSCR System will link with existing railway lines such as the LRT 1, LRT 2 and MRT 3, as well as with the upcoming Metro Manila Subway.

According to the DOTr, the NSCR System, compared to other railway projects in Asia, is more cost-effective. Per kilometer, the project costs about $100 million.

The rail system is expected to be partially operational by 2022 with a daily ridership of 340,000 passengers. It will be fully operational by 2023 with a daily ridership of 550,000 passengers.