PH, Japan ink USD935-M loan deal for Metro Manila subway project

By Aerol John Pateña and Joann Villanueva

March 16, 2018, 8:42 pm

<p><strong>SUBWAY FOR MANILA</strong>. Finance Secretary Carlos Dominguez III (seated 3rd from left) and Japan International Cooperation Agency Chief Representative Yoshio Wada (seated 4th from left) sign the first tranche of the Official Development Assistance loan agreement for the construction of the PHP355.6-billion Metro Manila Subway Project on Friday (March 16, 2018). The subway project is the biggest under the government’s “Build, Build, Build” program. Also present during the signing were Budget Secretary Benjamin Diokno (2nd from left) and Transportation Undersecretary for Railways Timothy John Batan (far left). <em>(Photo courtesy of DOTr)</em></p>

SUBWAY FOR MANILA. Finance Secretary Carlos Dominguez III (seated 3rd from left) and Japan International Cooperation Agency Chief Representative Yoshio Wada (seated 4th from left) sign the first tranche of the Official Development Assistance loan agreement for the construction of the PHP355.6-billion Metro Manila Subway Project on Friday (March 16, 2018). The subway project is the biggest under the government’s “Build, Build, Build” program. Also present during the signing were Budget Secretary Benjamin Diokno (2nd from left) and Transportation Undersecretary for Railways Timothy John Batan (far left). (Photo courtesy of DOTr)

MANILA -- The government of Philippines and Japan signed Friday a loan agreement for the construction of the Metro Manila Subway Project (MMSP), the biggest project under the government’s “Build, Build, Build” program.

The initial tranche of the Official Development Assistance (ODA) from the Japan International Cooperation Agency (JICA) amounted to JPY104.53 billion (USD935 million) with an interest rate of 0.10 percent per year for non-consulting services and 0.01 percent yearly for consulting services, to be repaid within 40 years, inclusive of a 12-year grace period.

Finance Secretary Carlos Dominguez III and JICA Chief Representative Yoshio Wada signed the loan agreement. Budget Secretary Benjamin Diokno and Transportation Undersecretary for Railways Timothy John Batan for the Philippine government, outgoing Chief Representative Susumo Ito, and Japanese Embassy representative Noboru Kageyama also attended the event.

Phase 1 of the 25-km. underground railway has an estimated cost of PHP356.96 billion (USD7.05 billion) and will have 14 stations from Mindanao Ave. in Quezon City up to the Ninoy Aquino International Airport (NAIA), Dominguez said in his speech after the loan signing.

Dominguez said the loan deal is “a very generous package from JICA”.

The finance chief said there is a plan to have a North Zone extension for the underground railway system that will run up to Bulacan and a South Zone that will reach Cavite.

He said initial operation of the project is targeted to start by 2022 for the first three stations, namely Mindanao Ave.-Quirino Highway, Tandang Sora and North Ave. while full operation of the whole Central Zone has been set for 2025 and is expected to serve some 370,000 passengers daily in its opening year.

“The timely completion of the subway project will crown the aggressive infrastructure program the administration of President Duterte has initiated. It will likewise crown the achievement of the economic diplomacy the Duterte administration has undertaken,” he said.

Dominguez said the signing of the two succeeding tranches “will depend on how fast we implement the first project and how quickly we can get it operational”.

He also said that spaces in the stations will be maximized as this will be leased and revenues from this will be used to pay off the loan.

For his part, Wada said the project is seen as one of the major solutions to Metro Manila’s traffic woes, which according to a JICA survey, cost about PHP3.5 billion a day.

“As the Philippines’ trusted partner in development for many years, JICA offers our support to the construction of the subway project so that Philippines can sustain its growth trajectory, and improve the quality of life of many Filipinos through seamless mobility and connectivity,” he said.

Some of the rail system’s stations will be built near government agencies.

Batan, for his part, said, “Previously thought by many to be impossible, today’s milestone in realizing the Philippines’ first subway project is a testament to the adage that bold problems require bold solutions and that bold solutions require bold and visionary leaders to deliver.”

He said Transportation Secretary Arthur Tugade has instructed his officials to ensure that stations of the underground rail system will be “as close as possible if not on government property”.

“This is in connection with a strategy that we have been following -- of trying to capture value from this investment. So we are going to invest a lot of money in building the project and making that investment will create value as a consequence. And as much as possible we selected station locations that will maximize the return of that value to the government coffers,” he said.

Batan said some of these stations will be the North Ave. station, near the Veterans Memorial Medical Center; the Katipunan station, which will be at a Camp Aguinaldo property; and the Bonifacio Global City station, which will be near the Bases Conversion and Development Authority office in Taguig and the Villamor Air Base in Pasay City. (PNA)

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