Signing of the Loan Agreement for the
Metro Rail Line 3 Rehabilitation Project
November 8, 2018
His Excellency Koji Haneda, Ambassador of Japan to the Republic of the Philippines, JICA Senior Vice President Yasushi Tanaka, JICA Chief Representative Yoshio Wada, Department of Transportation Undersecretary Timothy Batan, fellow workers in government, friends in the media, good afternoon.
Today, we will begin fully addressing the problem that is the MRT-3.
The MRT-3 is a 16.9-kilometer mass rail transit system serving the busiest route in the National Capital Region. It was designed to carry the commuter traffic along EDSA in order to free this thoroughfare of buses and other traffic. That, of course, did not happen. Over the last decade, the reliability of this rail transit system simply deteriorated to a point where the MRT-3 actually operated buses to move the passenger load.
I will not go into the harrowing details about how this rail line degraded to its sad state. We all know the details. Over the past years, the MRT-3 operated with less trains that were running slower, carrying less people and suffering intermittent breakdowns to the point of becoming the symbol of where our country fails. It brought our commuters unspeakable hardship and contributed to the road congestion we have to endure.
But help is on the way.
The Metro Rail Transit Line 3 Rehabilitation Project will address the problem in a most comprehensive fashion. It will not only rehabilitate one, two, or three sub-components of the rail line. It will rehabilitate them all, including replacement of worn out tracks, upgrading of the train’s obsolete signaling system, and general overhaul of the 72 15-year old light rail vehicles, resulting in the expansion of its current degraded capacity and modernization of all its sub-systems.
When completed in a few years from now, we will increase the number of operating train sets from 15 to 20 at peak hours, increase our operating speed from 30 kilometers per hour to 60 kilometers per hour, and slash by half the time between trains from 7 to 3.5 minutes.
This project will cost a total of P21.96 billion (roughly $413 million). Of the total amount, P18.76 billion (about $362 million or Y38.10 billion) will be covered by the JICA official development assistance financing agreement we signed today. The remaining P3.19 billion will be funded from local sources.
The JICA component has a maturity of 40 years, which includes a 12-year grace period. It carries an interest rate of 10 basis points per annum for non-consulting services and 1 basis point per annum for consulting services. This is by every measure a very soft loan that will enable us to address a very pressing problem.
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 August 22, 2018. Today, November 8, we are signing the loan agreement. 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.
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.
I would like to assure our harried commuters that we will rebuild and reinvent this vital rail service as quickly as possible.
Thank you and good day.
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