PH, JICA seal P17.62-B loan for MRT-3 upgrade and rehab » Manila Bulletin Business

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PH, JICA seal P17.62-B loan for MRT-3 upgrade and rehab


By Chino S. Leyco

The Department of Finance (DOF) and the Japan International Cooperation Agency (JICA) signed yesterday the agreement providing the Philippines with a loan to upgrade and rehabilitate the Metro Rail Transit Line-3 (MRT-3) System.


Finance Secretary Carlos G. Dominguez III, on behalf of the Philippines, and JICA senior vice president Yasushi Tanaka, signed the 38.1-billlion yen loan (P17.62 billion) for the project for the 16.9-kilometer light rail system with 13 stations spanning across EDSA.

According to the DOF, the loan from Japan aims to improve the safety, reliability and level of service of the MRT-3. Given the urgency of the rehabilitation of the existing MRT-3 rail system, the Philippine government again adopted the “fast and sure” approach” with Japan in processing the approval of the loan for the project, in record time of less than three months.

The board of the National Economic and Development Authority (NEDA) chaired by President Duterte gave the go-signal for the project on August 22, which was then followed 77 days later by this afternoon’s signing of the loan agreement.

“This is by far the fastest loan processing we have completed,” said Dominguez after the signing ceremony and exchange of notes on the loan agreement.

Dominguez thanked Japan for its “generous financing support” for the project and for moving as fast as the Philippine government had done to get the rehabilitation of the MRT-3 started. As for the riding public, Dominguez said: “I would like to assure our harried commuters that we will rebuild and reinvent this vital rail service as quickly as possible.”

He said the MRT-3, which has “degraded to a sad state” and “brought our commuters unspeakable hardship” to the point of becoming “a symbol of where our country fails” will not only be rehabilitated but its operations also expanded and modernized with the help of this ODA loan from Japan.

The day before this event, Foreign Affairs Secretary Teodoro Locsin Jr. and Ambassador Koji Haneda had signed the Exchange of Notes on the Japanese loan for the MRT-3 rehabilitation project.

The MRT-3 rehabilitation project will cost a total of P21.96 billion (approximately $413 million), of which JPY38.1 billion (about P18.76 billion or USD362 million) will be funded by an Official Development Assistance (ODA) loan from JICA. The remaining amount of P3.19 billion (about $62 million) will be funded locally.

Under the terms of the accord, the loan covers an interest rate of 0.10 percent per annum for non-consulting services and 0.01 percent per annum for consulting services, with a maturity period of 40 years inclusive of a 12-year grace period.

“This is by every measure a very soft loan that will enable us to address a very pressing problem,” Dominguez said.

Dominguez said the project will address the problems of the decrepit MRT-3 system in the “most comprehensive fashion” through the replacement of all worn-out tracks, upgrading of the train’s obsolete signaling system, and general overhaul of the 72 light rail vehicles that are already 15 years old. This rehabilitation project will result in the expansion of the MRT’s current degraded capacity and modernization of all its subsystems, he said.

Dominguez said that with the upgrades to be done, the Department of Transportation (DOTr), which is the implementing agency for the project, expects the number of operating trainsets for MRT-3 to increase from 15 to 20 at peak hours, with time intervals of train arrivals reduced by half from 7 minutes to only three-and-a-half minutes.

With its system rehabilitation, MRT-3 is also expected to increase its train speed from 30 kilometers per hour to 60 kph.

Dominguez said the project includes the addition of carriages “to fulfill the original design of the stations.”

According to DOTr, it tapped the services anew of Sumitomo-Mitsubishi Heavy Industries (MHI), the original maintenance provider of MRT-3. Sumitomo started last Oct. 15 even before the loan agreement was signed to help accelerate the process of rehabilitating the rail system.

Its maintenance contract was terminated in 2012 by the then-Department of Transportation and Communications (DOTC), and then awarded to another service provider.

From servicing 500,000 passengers per day in 2012, the MRT-3 was only able to accommodate around 388,000 passengers in 2017 owing to the deteriorating condition of the system, which led to train stoppages, system failures, engine breakdowns and faulty air conditioning units.

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