Funding part of P370.8-B financing package from Japan
By Ronnel W. Domingo, Inquirer Business
The government has secured a fresh flow of funds for the P488.5-billion Metro Manila subway project, the Philippines’ first underground railway, as the Department of Finance (DOF) signed with the Japan International Cooperation Agency (Jica) a P112.9-billion loan.
The government of Japan through Jica is providing funding for 76 percent of the project cost—approved by the National Economic and Development Authority’s board last September—through a P370.8-billion loan package.
The Philippine government will shoulder the remaining 24 percent of the cost, at P117.7 billion.
This second-tranche loan is payable in 27 years with a grace period of 13 years, for a total maturity period of 40 years.
Tokyo and Manila signed in March 2018 the agreement for the first batch of funds, about P47.58 billion that will also mature in 40 years.
Funding from Japan will come in three or four more tranches, which Jica will release based on the project requirements, and will be subject to further discussions between Jica and the Department of Transportation (DOTr)—the project’s chief implementing agency.
The subway project involves a 33.1-kilometer electromechanical system that will power a 27.5-kilometer railway line with a depot in Valenzuela that connects to Bicutan in Taguig City and Ninoy Aquino International Airport (Naia) Terminal 3 in Pasay City.
The project will also cover the physical integration segment with the North-South Commuter Railway (NSCR) System from FTI in Taguig City to Bicutan.
This entails the construction of a depot and 17 stations, two of which will be built through a separate loan under the NSCR System, and the procurement of 30 train sets.
The preparation of the detailed engineering design and bidding documents for the project started in November 2017, financed by a grant from Jica.
Also, in January 2018, the DOTr and Jica signed a grant-financed technical cooperation agreement for the establishment of the DOTr Railway Office, which is intended to support capacity building for the operation and maintenance of both the Philippines’ current and new railway systems.
IN PHOTO: Finance Secretary Carlos Dominguez III (left) and Jica chief representative Eigo Azukizawa signed the 253.31-billion yen (about P112.9 billion) second tranchefunding for the construction of the Metro Manila Subway Project.