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UNIVERSAL LRT Corp. (ULC) plans to borrow money from
foreign banks to fund the bulk of the investment requirements for
the Metro Rail Transit (MRT) Line 7, a company executive said.
Eli Levin, Universal LRT chief
executive officer and managing director, told reporters Wednesday
that of the total investment of $1.23 billion, about $926 million
will be sourced from creditors and another $309 million would
involve equity investments.
Of the $926 million in
borrowings, $126 million will be in the form of untied loans to
finance the civil works portion of the project and the remaining
$800 million will come from export credit agencies.
The equity investment will come
from the contractors, multilateral institutions such as the Asian
Development Bank and World Bank, and real-estate developers, he
said.
Levin said financial closure for
the project is expected in 18 months after the contract is awarded
to ULC.
“If we can have the final
contract signed by June this year then we could start construction
at the end of 2008 and finish it by mid-2012,” he added.
Under a Swiss challenge, ULC, as
the original proponent, has the right to match the best bid for the
project.
The challenger has to top
ULC’s offer in terms of internal rate of return (IRR), project
cost, government advances, business plan to make the project deficit
neutral, and set aside a performance bond.
Based on its business plan, the
company will develop 7,300 residential units, 900 office units and a
90,000-square meter gross-mall area in a 195-hectare estate in
Bulacan province. Tax revenues will partly finance the $1.235
billion 17-kilometer railway.
ULC estimated its annual rate of
return from MRT 7 operations at 11.7 percent, with excess revenues
to be shared with the government.
MRT 7 will have a 22-kilometer
elevated track running from Tala in Novaliches to North Avenue
corner EDSA passing through Lagro, Fairview, Commonwealth Avenue
before joining MRT Line 3 in North Avenue.
The project is intended to serve
commuters to and from the north of Metro Manila, including
Novaliches, Fairview, Caloocan and Bulacan, and involves the
construction of a 17-km asphalt private road at the Marilao Exit of
the North Luzon Expressway that would terminate at the intermodal
terminal in Tala.
--Darwin G. Amojelar
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