Loan signing for subway project set for January
The Duterte administration is targeting to seal a loan agreement with the Japanese government for the country’s first underground train system by January 2018, the Department of Transportation said yesterday.
This followed the so-called exchange of notes between the Philippines and Japan during the 31st Association of Southeast Asian Nations Summit held in Manila earlier this week.
This was considered a “binding commitment” ahead of the signing of the loan for the Metro Manila subway—a P356-billion project (about ¥800 billion) that will link Quezon City and Manila’s Ninoy Aquino International Airport, cutting through the capital’s congested roads.
The loan, provided by the Japan International Cooperation Agency, will run 40 years with an interest rate of 0.1 percent and a 12-year grace period.
The DOTr said the Japanese government had initially committed to finance about ¥600 billion or 75 percent of the subway’s total cost. The initial amount to be released is ¥104.5 billion, with more funds to be disbursed as the project makes progress.
John Batan, transportation assistant secretary for railways, said yesterday the remaining ¥200 billion would be covered by a separate agreement with the “same loan terms as the first tranche.”
The Metro Manila subway project, which will span some 30 kilometers, was given the go-ahead by the board of the National Economic and Development Authority last September.
With the exchange of notes, the DOTr said design activities for the subway project would start later this month.
The DOTr estimated that construction would be fully done by 2025, however it hoped certain sections would be operational by 2022, or when President Duterte’s term ends.
The subway plan was mentioned in 2014, when Jica and Neda jointly released the “roadmap for transport infrastructure development for Metro Manila and its surrounding areas.”
This same study included the “dream plan” of P2.6 trillion worth of infrastructure projects until 2030.
Among the document’s highlights was the often-cited P2.4 billion in daily losses for Metro Manila alone due to road congestion. Left unchecked, that would balloon to P6 billion daily by 2030.
Improving Mega Manila’s mass transit backbone, which includes bus rapid transit systems, was crucial in combating road congestion, the dream plan report noted.
Should those projects be implemented successfully, ridership was seen to increase from 1.5 million in 2012 to 7.4 million by 2030 in Metro Manila.
