In what could be a significant blow to infrastructure development in the Philippines, the authorities have pushed back the deadline for the first bids for a long-haul rail project.

The 653-kilometre North-South Railway Project is proposed to connect the capital, Manila, with the far south of Luzon island, the largest island in the Philippines archipelago. While passenger-led, the railway is also viewed as a long-term catalyst for cargo and economic development.

First-round bids were to have been submitted by mid-April, but that is now “postponed until further notice,” the website of the government’s Public-Private Partnership Center said. (The centre was not immediately available to comment.)

What prompted the change was a request for two significant modifications, asked for by the Department of Transportation and Communications, which could result in a substantial re-drawing and possible dilution of the plan.

One is a change to what the line does; the other is a response to increased costs.

The former would split the North-South Railway Project into separate commuter line and long-haul projects “with possible changes in the structure of the line,” the site said without providing details.

The second modification would “permit the project to proceed in light of an increase in estimated project costs due, to among others, an increase in estimated capital expenditure resulting from the adoption of standard gauge.” The project had an initial expected cost of P170.7 billion (US$3.79 billion).

While the delay is a set-back for such a project, media in the Philippines have reported enduring and substantial business interests which want a shorter – rather than lengthy – delay.

“We have asked for an extension to somewhere around middle of May,” Karim Garcia, vice president for business development of Metro Pacific Investments Corp. (MPIC), was quoted as telling reporters by The Philippine Star. MPIC could not be reached by Asia Cargo News.

MPIC needs more time to form its consortium, and queries MPIC has posed about the deal have yet to be answered by the DOTC, the newspaper added.

MPIC’s consortium is believed to involve three Filipino companies and two from overseas. It will square off against groups led respectively by local firms Ayala Corp and San Miguel Corporation, India’s IL&FS Transport Networks and the US-based Fluor Daniel, the Star added.

By Michael Mackey

Southeast Asia Correspondent | Bangkok