Firm of Duterte’s campaign donor poised to bag Davao railway project

DAVAO CITY (MindaNews / 21 Nov) – The Udenna Corporation of Dennis Uy, business tycoon and campaign funder of President Rodrigo R. Duterte, has the “upper hand” over other possible competitors in building the planned monorail project in Davao City after securing the original proponent status (OPS) from the Department of Transportation.

City Planning and Development Office head Ivan Cortez shows on Wednesday (21 Nov 2018) a design of a monorail project for Davao City created by Philtram/Maglev Vision Corp. MindaNews photo by ANTONIO L. COLINA IV

Uy’s firms Udenna and Chelsea Holdings created a consortium with China Telecom known as Mislatel that was officially declared as the country’s new major telco player after the National Telecommunications Commission (NTC) En Banc issued its confirmation order on November 19.

Davao City Planning and Development Office (CPDO) head Ivan Cortez told MindaNews in an interview on Tuesday that Udenna has yet to secure endorsements from the City Development Council, Regional Development Council, and City Council of Davao as these are the requirements of the National Economic Development Authority-Investment Coordination Committee (NEDA-ICC) to begin the evaluation of the firm’s “unsolicited proposal.”

The Udenna has scheduled a presentation before the City Development Council this month, he said.

The estimated cost of the rail project is P30 billion.

Cortez said Uy’s company submitted its unsolicited proposal in December 2017 but the city government told them to send its proposal directly to DOTr as the agency is responsible for overseeing the “implementation of the rail system in the country.”

After it satisfies all the requirements set by the government, he said the NEDA will subject the rail project to a Swiss Challenge procedure but added having granted the OPS already gives UDENNA the upper hand already as it can have “the right to match the best offer (of other interested parties) that might come out during the bidding.”

“The most crucial of the documentary requirement is the financial viability and capacity of the proponent to undertake the project. That will be reevaluated and assessed by the NEDA-ICC,” he said.

Cortez said any rail system is classified as a “national project” and that the city government could not provide Udenna a counterpart support for it because any “unsolicited project” should be at no cost to the local government in accordance with Public-Private Partnership Ordinance of the city.

Swiss Challenge

The homegrown company was granted with OPS because it is the only one that complied with the documentary requirements, he said.

The Korean Engineering Company submitted its unsolicited proposal in 2015 while Philtram/Maglev Vision Corp., in partnership with state-run China Railway Engineering Consulting Group Inc., in January 2017.

The two firms can still join the bidding, Cortez said.

Any project can be considered unsolicited when it is not listed as one of the projects to be implemented by the city, introduces new technology, and requires no financial support from the city in the implementation of the project, Cortez added.

“In their second presentation to the Transport and Traffic Group, they already were harping on getting a guarantee from the (city) government. That’s why we already recommended them to go directly to the national government because the city government cannot provide them the guarantee that they are asking for. It’s a guarantee that can only be provided for by the national government,” he said. 

According to Cortez, the DOTr responded favorably to the company’s proposal and granted them the OPS.

“Just like other rail systems from the other parts of the world, there really is a need for government to also chip in in terms of operation or in terms of capex (capital expenditure) simply because as of now all operations of the railway system in the world is subsidized largely by the government,” he said.

Cortez added it might be impossible for Udenna to bear all expenditures without subsidy from the national government.

He said implementation of the project could start between 2020 and 2021.

Priority project

The intra-city urban rail transport system has been identified as one of the high-priority projects in the 27-year Infrastructure Modernization for Davao City (IM4Davao) to address the traffic congestion here.

Under IM4Davao, the first phase of the 15-km mass transit main line phase 1 will run from Davao-Bukidnon Road to J.P. Laurel Avenue Cor. R. Castillo St.

Other components of the railway, which are eyed to be completed by 2045, include a 6.6-km extension 1 (from Toril to Davao-Bukidnon Road); and construction and operationalization of 7.3-km extension 2 (from J.P. Laurel Avenue Cor. R. Castillo Street, to Mudiang, and to airport), 6.9-km spur line from J.P. Laurel Avenue to Tagum Digos Central Station, and 3.6-km spur line form Maharlika Highway and Junction of Davao-Bukidnon Road.

The earlier plan of the city is to implement the High Priority Bus System first before the railway. But Cortez said the city will have both implemented simultaneously considering the growing demand for mass transit. (Antonio L. Colina IV / MindaNews)