Senator Gatchalian flags P295 million commitment fees from delayed DOTr projects

The government has incurred nearly P295 million in commitment fees for foreign-assisted transport projects that have been delayed or have yet to secure loans, Senate President Sherwin Gatchalian said Friday.

Gatchalian raised the issue during the Senate finance subcommittee’s deliberations on the Department of Transportation’s (DOTr) proposed budget for 2027, questioning the need to continue paying fees for loans that remain largely unused.

“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.

Commitment fees are charges imposed by lenders for keeping loan funds available even when the money has yet to be drawn by the borrowing government.

As of December 2024, the South Commuter Railway Project accounted for the largest commitment fee at about P91 million, followed by the Davao Public Transport Modernization Project (DPTMP) at approximately P85 million.

The South Commuter Railway forms part of the North-South Commuter Railway (NSCR) system, whose implementation has been pushed back by a year amid problems involving right-of-way (ROW) acquisition.

The DPTMP, meanwhile, has suffered a 56-month delay, or more than four years, with ROW acquisition cited as the main cause, according to DOTr Undersecretary Mark Pastor.

Gatchalian also pointed to four projects that, despite not availing of loans, had collectively accumulated P139,010,554.69 in commitment fees.

These include the DPTMP's second loan from the Asian Development Bank, the EDSA Greenways Project, the Cebu Bus Rapid Transit Project (CBRTP), and the Facility for Accelerating Studies for Infrastructure (Fast-Infra) project.

The senator urged the DOTr to reassess its foreign-assisted projects and drop those that are no longer necessary, saying the government should avoid incurring additional fees for loans tied to projects that are not sufficiently established or progressing.

The issue comes as the government seeks to significantly expand transportation spending in 2027, with the proposed DOTr budget reaching P300.96 billion.

-Paraluman News