The said contract is for the first phase of development at Mindanao, the second largest island in the Philippines. The four groups namely China Railway International Group, China Civil Engineering Construction Corporation, China State Construction Engineering, and China Communications Construction Company are state-owned enterprises. The capital for the entire project is funded by China and understandably use of Chinese contractors was a condition of the loan. The cost of the first phase, $ 1.6 bn, is more than twice the original estimate.
According to Eymard Eje, Assistant General Secretary, Department of Transportation, at least three out of the four interested contractors shall bid for the scheme and the Chinese Government will be deciding who those would be. Post this evaluation, The Philippines Government will decide the winner based on the bids offered.
The Mindanao scheme is the first rail project outside the main Philippine island of Luzon. The project will boast of 102 km. long rail line connecting Tagum City, Davos City, The Capital, and Digos City. When fully functional, this rail project will reduce travel time between Tagum and Davos quite considerably. The significance of the project can be also be ascertained from the fact that it is referred to as a lifelong dream that would help connect Mindanao’s economic area to other world markets. Philippine President Rodrigo Duterte had named this scheme in his Governments top priority projects in 2016 but more than halfway into his term, the project is yet to start. However, Eje maintains that the construction will start in the first quarter of 2020 and could be partially operated by 2023.