The government has approved financial guarantees for a massive elevated railway line that will extend the congested Metro Rail Transit Line 3 in Metro Manila to Bulacan province.
Delays in that process means the project will not be finished before 2018, Transportation Secretary Joseph Abaya told reporters in an interview last week.
Abaya added that those guarantees, outlined in a so-called performance undertaking, were recently approved by the Department of Finance.
He also said the Department of Transportation and Communications had approved the implementing guidelines for the P62.7-billion project, dubbed the MRT-7. The private sector group that will develop MRT-7 is Universal LRT Corp. Ltd., which is backed by San Miguel Corp. and businessman Salvador Zamora III.
Much focus has been placed on the performance undertaking because it was a key requirement before Universal LRT can secure an official development assistance loan from the Japanese government, which will finance most of the project cost.
The lack of a guarantee, which was typical for the rarely profitable railway business, was also the main reason for years of delay.
“They should commence financial closing [for the ODA loan]. We asked them to do it sooner than 18 months,” Abaya said, citing the typical process for which financing can be secured.
Abaya said he hoped the group can start construction before 2015, but this was not possible, according to construction firm D.M. Consunji Inc., a subsidiary of DMCI Holdings Inc. that won the construction contract to build MRT-7.
“Detailed engineering and financial closing will take at least one year,” DMCI Holdings president Isidro Consunji said in a text message.
Consunji added that since it would take about three years to build MRT-7, the project would be finished around 2018.
San Miguel president Ramon Ang said the company hoped to complete the financial close for the loan in less than a year.
MRT-7 involves the construction of 22.8-kilometer-long rail line, starting from San Jose del Monte in Bulacan and ending in North Avenue in Quezon City.
It would be the first major extension of the MRT-3 in Metro Manila, which operates along Edsa. Abaya said Universal LRT “could do advance works” once it gets the approval from government.
It was earlier reported that the MRT-7’s rail component would initially operate 108 rail cars in a three-car train configuration. Initial capacity is projected at 448,000 passengers a day, but will eventually be expanded to accommodate as many as 850,000 passengers daily.
According to the National Economic and Development Authority, MRT-7 will start from North Avenue station in Edsa, Quezon City, passing through Commonwealth Avenue, Regalado Avenue and Quirino Highway up to the proposed intermodal transportation terminal in San Jose del Monte, Bulacan. It will have 14 stations.