Gatchalian flags P295-M fees paid due to transport project delays

MANILA, Philippines – Senate President Sherwin Gatchalian flagged on Friday P295 million in commitment fees paid by the government for major transport foreign-assisted projects that have long been delayed or failed to secure loans from development banks.

Gatchalian flagged the delayed projects during the Senate finance subcommittee hearing on the Department of Transportation’s (DOTr) budget for fiscal year 2027.

“Whether the project is on time or not, obligation na natin yan for them making the loan available to us. Itong P295 million, these are commitment fees that were incurred because nadelay yung projects. Ganito kalaki yung nilabas natin pero yung project hindi natin narerealize,” Gatchalian stressed.

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(“Whether the project is on time or not, it is our obligation for them to make the loan available to us. This P295 million is commitment fees incurred because the projects were delayed. This is how much we released, but we could not realize the project.)

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READ: DOTr offers P820.5-M compensation to acquire MMSP right-of-way

Commitment fees are paid to lenders for unused or undisbursed loans as compensation for holding the loaned money.

The largest commitment fee as of December 2024 was incurred from the South Commuter Railway Project at around P91 million, followed by the Davao Public Transport Modernization Project (DPTMP) at around P85 million.

To note, the South Commuter Railway Project is part of the  North-South Commuter Railway (NSCR) which has already been delayed a full year due to right-of-way (ROW) acquisition problems.

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Meanwhile, the DPTMP has been delayed by 56 months, or over four years, primarily due to ROW, according to DOTr Usec. Mark Pastor 

“There was an approval for the DPTMT nung 2021 nadelay siya because of the pandemic… Nung nagsimula kami nung 2025 zero right-of-way pa po tayo dito, so that is the main reason for the delay. Out of the 36 parcels of land, we have already secured 24,” Pastor explained.

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(There was an approval for the DPTMT in 2021 but it was delayed because of the pandemic… When we started in 2025 we still have zero right-of-way here, so that is the main reason for the delay. Out of the 36 parcels of land, we have already secured 24.)

The senator further flagged four major projects that did not avail of any loans, but altogether incurred P139,010,554.69 in commitment fees.

These are the DPMPT, on its second acquired loan from the Asian Development Bank; the Epifanio delos Santos Avenue Greenways Project, the Cebu Bus Rapid Transit Project (CBRTP), and the Facility for Accelerating Studies for Infrastructure (Fast-Infra) project.

The EDSA Greenways incurred a total of P49,217,151 in commitment fees despite having no loan availments, and being delayed 45 months by the end of 2024.

DOTr Secretary Giovanni Lopez said the agency has already decided to shelf the EDSA project.

Already delayed by a decade, The CBRTP, which acquired two separate loans from the Agence Française de Développement and the International Bank for Reconstruction and Development, has been penalized with around P69 million in commitment fees for both banks.

It was first approved in 2014, but due to the intervention of the local government and provincial government in 2018, new studies were sought to realign the project, as per Pastor.

“Nung 2021 lamang nasimulan yug procurement and eventually the civil works which was completed for package 1 last year. So inanaugurate po ito and tumatakbo na po yung system in so far as package 1 is concerned. But for package 2 and 3 hindi pa po kumpleto right-of-way,” Pastor explained.

(The procurement and eventually the civil works which were completed for package 1 last year only started in 2021. So it has been inaugurated and the system is running as far as package 1 is concerned. But for package 2 and 3, the right-of-way is not yet complete.)

READ: DOTr: Most of 2027 projects not funded by NEP

With these, Gatchalian recommended the DOTr to review foreign-assisted projects and remove items that are no longer needed to avoid paying more fees, and borrowing money for projects that are not established.

“A loan is a loan. Im not in favor na dahil concessional yung loan, utang tayo nang utang, lalo na wala namang pupuntahan yung utang, kasi that will be part of our debt stock eh. Ang suggestion ko sa dept kung talagang hindi naman talaga kailangan yung ODA (Official Development Assistance) project wag na tayo umutang… Mag review tayo ng kung ano mga items na di na kailangan tanggalin na natin,” Gatchalian stressed.

(“A loan is a loan. I am not in favor of just because the loan is concessional, we will keep borrowing, especially since the debt has nowhere to go, because that will be part of our debt stock. My suggestion to the department is that if the ODA (Official Development Assistance) project is really not needed, then we should not borrow anymore… Let’s review what items are no longer needed and get rid of them,”)

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Lopez, in response, shared that the agency has already begun reviewing projects that it could not afford to pursue. /mr