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Mindanao Railway Project - Phase 2


#MindanaoRailway Project Phase 2: General Santos - Koronadal. It will be interesting to see what path they will take. Will they straight to General Santos then Koronadal, or will they go to Koronadal as a semblance of the existing plan and have General Santos be a spur line from Koronadal. Thanks to @Selo Marquez for the heads up on this report.


Mindanao Railway Project to take 10-15 years to complete
Ellson Quismorio


It may take the combined terms of at least two more Philippine presidents before the Mindanao Railway Project (MRP) gets completed.

This can be gleaned from Department of Transportation (DoTr) Undersecretary Timothy John Batan’s remarks Tuesday before the House Committee on Mindanao Affairs wherein developments on the MRP were tackled.

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“Currently we only have investment approval from NEDA for the Tagum, Davao-Digos segment. That’s the first 100 kilometers only. Now we are working on Phase 2 which will bring us into General Santos and then to Marbel (South Cotabato). And for the future phases, we are still working on the feasibility studies,” Batan said.

“We are drawing the big picture, we are putting in place the big picture so that at least we do one, two, or three phases at a time. Eventually, maybe we are looking at anywhere from 10 to 15 years for all of this. We will finish this gradually and cover the entirely of Mindanao,” added the Transportation official.

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Batan said that Phases 1 to 3 are the only ones with clear plans, although only Phase 1 has had any detailed feasibility study. “As you have noticed, what we need are feasibility study resources.”

“The Chinese government is giving us a grant for the conduct of a detailed feasibility study for Phase 2. That grant funding is currently being processed by CITCA (China International Development Cooperation Agency). We are pushing (to) finalize documentation for Phase 2 within the year so that we can proceed with the detailed feasibility study for Phase 2 throughout next year and potentially for NEDA Board investment approval by 2022,” he explained.

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This NEDA study covered the entire MRP in its initial plan of just three phases or stages. The project has since been expanded to 10 phases by virtue of the detailed feasibility study conducted on Phase 1.

Asked for the amount of money needed to complete all needed feasibility studies for the MRP, Batan said he doesn’t have a figure although the pending grant for Phase 2 “would be a good indication.”

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Where should the 2nd Phase of the Mindanao Railway Project be?


Conventional wisdom attributes the selection of the Tagum-Davao-Digos route as Phase 1 of the Mindanao Railway to fact that the President that designated the railway project a "flagship project" hails from Davao City. Pundits had chalked the decision to a classic case of "to the political victors go the spoils". While there is merit to this jaded conclusion, it is also prudent to consider the economic justification for this course of action.

Let us explore this in the following sections:

Making a railway sustainable
The strength of the regional economy matters
Next steps

Making the railway sustainable

The oldest railway system in the Philippines is the Luzon-based Philippine National Railways (PNR). At its height, the system maintained 797 kilometers of track from La Union to Bicol. By 2014 however, this coverage had shrunk to less than 100km of track. Less than the intended length of track for Phase 1 of the Mindanao Railway.

To protect the billions of pesos that are earmarked for the implementation of the Mindanao Railway, it is important to understand how and why the PNR declined to its current state. Lessons must be learned to avoid repeating them with the MRS.

Based on the experience of the Philippine National Railways (PNR), its path to degradation and decay was accelerated, in no small measure, to its over-dependence on passenger traffic as its primary source of revenue and the loss of its freight business. PNR General Manager Junn Magno explained the importance of cargo traffic to the PNR's future in this interview given to Bicol media. (Proceed to time index: 3:00).


The following Philippine Daily Express article from 1983, shared be Gorio Belen the Philippine Railway Historical Society FB page, reinforced GM Magno's point above. It summarizes what happens when a railway is overly dependent on government subsidies to stay operational and lacks measures to achieve a measure of profitability.

Therefore, if the Mindanao Railway is to be given a proper jump-start in its operations, it is important that its inaugural phase be situated in the most economically vibrant region of Mindanao.


The strength of the regional economy matters

A sustainable railway is one that will not only fill passenger seats, but will also support commercial needs. According to a study funded by the World Bank (see page 36).

Railways cost structures are at their most highly competitive when railways can operate large trains, well-loaded with traffic, over a heavily used network, by organizations with a lean and market-oriented corporate management. Train size and payload provide train operating economies; train density plus heavy network use provide infrastructure economies; and corporate structure yields administrative overhead economies.

These findings match the the PNR's own experience. Railways must be maximized to be profitable, and freight traffic is key.

As shown in the following table -- with data drawn from the Philippines Statistics Authority -- the Davao Region has consistently been the stronger regional economy in Mindanao. This gives it an advantage in generating kind of the activity that would maximize a railway.

In addition to the Davao Region's economic advantage, there is also the matter of population density. A relatively larger concentration of potential passengers also presented a key consideration.

Prior to the Duterte administration, discussions about the Mindanao Railway had always centered around Cagayan de Oro as being the most likely hub for the system. In addition to vocal support by prominent national leaders such as Senator Aquilino Pimentel, the prevalence of heavy industry in Northern Mindanao also made it a serious contender as a starting point for the railway system. It remains a consistent close second to Davao in terms of both economic strength and population -- as per PSA data.

The ground work for the Tagum-Davao-Digos leg of the railway is already well underway. The surveys have been completed, notices to homeowners have all already been sent out. Phase 1 will be in Davao.


Next steps

The only question remaining at this point is: Where will Phase 2 be?

The answer to this may lie in a recent presentation to Congress. Atty. Clipton Solano, Project Manager for the Mindanao Railway Project Management Office, gave the House of Representatives an update on the Mindanao Railway Project on October 23, 2020. There, Atty. Solano revealed that the MRPO was looking into starting feasibility studies for a railway to Koronadal and General Santos City -- in the SOKSARGEN region. The presentation used for the update appears below.

Note: The graphic above has stirred up interesting discussions on this website's companion page on Facebook. See here: https://www.facebook.com/MindanaoRailWatch/posts/3148726888728043
This selection is reportedly not yet final as the study for this southbound phase has yet to yet started. The DOTr has NOT issued an official public summary for the table above. Therefore, what follows is speculative and based solely on an analysis of open-source information.

But the following are reasonable justifications for prioritizing the Digos-General Santos-Marbel route. Points for comparison between a northern and a southern expansion of the the railway given the location of Phase 1 is not as straight-forward as one would think.

While Northern Mindanao has a significantly stronger economy than SOKSARGEN, General Santos -- one of the destination cities -- is significantly closer to Davao City than Cagayan de Oro. Even if the southern line is extended to Koronadal City, it would only add an addition 58km to the Phase, which would still be shorter than a line to Cagayan de Oro via Bukidnon. This would make for a shorter, and thus more affordable, railway. Resulting in a more favorable rate of return

While the alignment survey for both lines have yet to be completed, a line through Bukidnon would arguably traverse more challenging terrain than a line to General Santos and Koronadal. It is worth noting that the terrain that the Tagum-Davao-Digos railway traversed is the reason by the two-track railways was modified to a single-track railway to manage project cost.

Cagayan de Oro to Davao (262km est.)     General Santos to Davao (150km est.)            

The population sizes of SOKSARGEN and Northern Mindanao are very similar, but slightly in favor of Northern Mindanao. But the proximity SOKSARGEN to Phase 1 allows a southbound railway to increase the addressable market of Phase 1 by 4.5 million passengers at a fraction of the cost of connecting Phase 1 with Northern Mindanao.

Further study is required to ascertain if the significantly stronger economy of Northern Mindanao, compared to SOKSARGEN, would offset the increased cost.

Funny, I was thinking similarly when I reviewed the plans for the railway a while back: that southward expansion would be much closer to the next major city.

Follow-up expansion should probably work on building the north-south inland corridor for Mindanao so that railway can connect major ports in the south to the ones in the north.

Posted on Reddit

--- Quote ---This article surprised a number of people because it indicated that Phase 2 of the Mindanao railway would connect General Santos City next to the Davao Region instead of Cagayan de Oro.

While at first glance CDO made sense given that Northern Mindanao was the second largest regional economy and had the second largest population in Mindanao. But given its distance from Phase 1, it would also mean greater cost. A direct route via Bukidnon have it go over challenging terrain.

Going via Butuan would mean going through a much longer route with no strong markets in between. According to data from the Philippine Statistics Office, the regional economy of the Caraga region ranks 5th out of the 6 regions of Mindanao.

As PNR General Magno related on an interview with Bicol TV early 2020, cargo is what makes a railway profitable. The PNR’s decline was reportedly traced to when it started relying entirely on passenger traffic because if the loss of freight service.

If the Mindanao Railway it have any hope realizing a return on investment, it needs cargo. Cargo, in turn, stems from economic activity between point. The stronger the economy on either end of the railway, the greater demand for cargo.

Enter Phase 2. General Santos is closer to Davao and is in SOCKSARGEN region which is the 3rd largest regional economy in Mindanao. It is low-hanging fruit for expansion of coverage for the railway and building profitability that would subsidize the rest of the Mindanao Railway
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At the Mindanao Speaks Up forum that Mindanao Development Authority organized in February 10, 2021, Niel Bonto, from the MRPO, updated attendees on the status on Phase 2 of the railway. The next phase would connect the Davao Region with General Santos City and Marbel. Negotiations with China had been proceeding quietly for months, and by July 2020, terms of reference for the conduct of the feasibility study had already been drafted. The DOTr was simply awaiting confirmation of the start of the study by a Chinese contractor.



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