GPH-JICA Loan Agreement Signing for the First Tranche Loan for the Metro Manila Subway Project (Phase I)
March 16, 2018
I would like to thank the Japan International Cooperation Agency (JICA) for its support in making this subway project a reality.
This Project, which is the Phase I of the Metro Manila Subway Project, is so far the biggest single project under the Build, Build, Build program of President Duterte. For the first phase, we calculate a total project cost of 356.96 billion pesos (USD7.05 billion). This phase, covering the Central Zone, involves the construction of about 30 kilometers of underground railway with 14 stations with the possible extension of 1-2 more stations being planned by DOTr, from Mindanao Avenue to the Ninoy Aquino International Airport (NAIA).
The first tranche of the Loan Agreement for this Project amounts 104.530 billion yen or about 935 million USD. It carries an interest rate of 0.10% per annum for non-consulting services and 0.01% per annum for consulting services; to be repaid within 40 years inclusive of a 12-year grace period.
The project includes a depot in Valenzuela, electro-mechanical systems and rolling stock, and the establishment of a Philippine Railway Institute (PRI). The Institute will provide training as well as do research and development on regulation, train operations and maintenance. This will build a corps of expert train personnel to manage not only the subway system but all the commuter rail lines of the country. It is about time that our commuter lines be run by real experts.
The subway system has been part of the joint NEDA-JICA Roadmap for Transport Infrastructure Development of Metro Manila and its surrounding areas. Because of its cost, we considered this component of the infrastructure plan a dream. With the generous support of Japan and the fiscal space we enjoy thanks to the tax reform program—also called TRAIN—what was once considered a dream has now become a reality.
The detailed engineering design for the subway, which is being funded under a JICA grant, is currently ongoing. The design includes flood management features and applies the best seismic technology there is. We will acquire tunnel boring equipment to hasten the construction period. The Philippine government commits to working on this project25/8 to get it done at the soonest possible time.
In line with the “Fast and Sure” approach, the Philippine government processed the loan approvals for this project within 6 months only, from the NEDA Board approval on Sept. 12, 2017 up to the signing of the Loan Agreement today. We are targeting May 2022 to begin operation of the first three of the subway stations—Mindanao Avenue-Quirino Highway, Tandang Sora, And North Avenue. The entire Central Zone will be operational by 2025, including the commercial space for the subway stations that will help defray the cost of operating this facility.
The plan for the subway line envisions a North Zone that will extend to Bulacan and a South Zone that will extend to Cavite. I am confident that the succeeding administrations will get this done.
The timely completion of the subway project will crown the aggressive infrastructure program the administration of President Duterte has initiated. It will likewise crown the achievement of the economic diplomacy the Duterte administration has undertaken.
Thank you very much. I will see you all at the inauguration of the nation’s first subway station …
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