The governments of the Philippines and Japan, through the Department of Finance (DoF) and the Japan International Cooperation Agency (JICA), formally signed the P18-billion loan agreement for the Metro Rail Transit 3 (MRT-3) Rehabilitation Project on Friday.
Finance Secretary Carlos Dominguez III and JICA senior vice president Yasushi Tanaka signed the loan agreement, witnessed by Ambassador of Japan to the Philippines Koji Haneda, Department of Transportation (DoTr) Undersecretary for Railways Timothy John Batan, Transportation Undersecretary for Planning Reuben Reinoso, along with officials from the DoF, the Embassy of Japan and JICA.
“I would like to thank the Government of Japan for the generous financing support extended and for moving as expeditiously as we have to get this rehabilitation started,” Dominguez said.
The process for obtaining the loan proved rigorous.
From January to April this year, a JICA study team, composed of 150 Japanese and Filipino engineers, conducted a comprehensive system inspection of the MRT-3. JICA then held a fact-finding mission in April to verify the results of the study and subsequently, a loan appraisal mission for the project in May.
Following the system inspection and fact-finding and loan appraisal missions, the project underwent review and approval by the National Economic and Development Authority (NEDA) Investment Coordinating Committee (ICC), which consists of the DoF, NEDA, Office of the Executive Secretary, Office of the Cabinet Secretary, Department of Budget and Management, Bangko Sentral ng Pilipinas, Department of Energy and Department of Trade and Industry.
“We recognize the urgency of the problems this rail system created. Because of that, we expeditiously acted on this loan agreement. The NEDA Board approval for this project was granted on 22 August 2018. This is by far the fastest loan processing we have completed. It underscores the fast and sure approach that have been adopted by the Philippines and Japan in their key infrastructure projects,” Dominguez added.
Through JICA, the loan amounting to 38 billion yen or P18 billion will cover the overall rehabilitation and maintenance works of the MRT-3. The loan carries an interest rate of 0.1 percent per year, payable in 40 years, with a grace period of 12 years.
“This is good news for Filipino commuters who will have improved access to safe and reliable transportation, while also meeting the Philippine government’s priorities to reduce traffic congestion in Metro Manila, attract investments and improve the quality of life of the people,“ Tanaka said.
The project will run until 2022, which includes the rehabilitation and maintenance of the system’s electromechanical components, power supply, rail tracks, depot equipment, and overhaul of its 72 18-year old Light Rail Vehicles (LRV).
After the rehabilitation, MRT-3 will increase its number of operating train sets from the current 15 to 20 at peak hours, increase train operating speed from 30 kilometers per hour to 60 kilometers per hour and slash by half the time between trains from the current 7-10 minutes to up to 3.5 minutes.
“We sign the loan agreement for the MRT-3 Rehabilitation Project, which is going to restore MRT-3 to its high-grade infrastructure condition, to deliver fast, reliable and safe transportation to the more than 600,000 commuters that used to use the MRT-3 everyday,” Transportation Undersecretary Batan said.
The rehabilitation of the MRT-3 is the third of four railway projects under the Duterte Administration’s “Build Build Build” Program. The signing of the loan agreement for the North-South Commuter Railway Extension Project is due in the coming weeks. Previously, loan agreements were signed for the Metro Manila Subway Project in March and the establishment of the Philippine Railway Institute in January.