THE government has clinched another concessional loan deal from Japan International Cooperation Agency (JICA), involving $2 billion to fund an elevated railway project aimed at decongesting traffic in Metro Manila.
Finance Secretary Cesar Purisima and JICA Chief Representative Noriaki Niwa signed on Friday an official development assistance (ODA) loan agreement for the first phase, or north segment, of the North-South Railways Project.
Under the agreement, JICA will give the loan in Japanese yen-denominated funds to the government.
The loans carry an interest rate of 0.10 percent per annum for non-consulting services, and 0.01 percent per annum for consulting services; and a maturity of 40 years inclusive of 10 years grace period.
As of end-July, JICA has extended 18 ongoing and two new project loans, amounting to about $2.8 billion, as well as eight ongoing grant-in-aid projects, with a total amount of about $116 million.
The NSRP is divided into two parts: Phase 1 will be for the north segment, and Phase 2 for the south segment.
The northern part will run from Malolos in Bulacan province, north of Metro Manila, to Tutuban district in the city of Manila.
This north segment, which the JICA loan will fund, will be handled by the Department of Transportation and Communications. (DOTC).
The south segment, meanwhile, will go as a public-private partnership (PPP) project, to be funded and constructed mainly by the winning bidder.
“Japan is one of our strongest development partners in the world, with total ODA in loans and grants given to the Philippines second only to the World Bank,” Purisima said.
“Infrastructure projects are sometimes not financially viable but are very economically desirable—the cheapest sources of financing are thus given premium. Thus, we thank the government and people of Japan for the faith they have put in our economic partnership and for the investment they have put in our future.”
“Traffic congestion is a clear and immediate challenge that can affect a country’s economic competitiveness,” Niwa, on the other hand, commented. “It’s timely for the Philippines to start its railway projects to ease traffic and improve mobility of logistics and ordinary commuters. The Philippines’ transit lines of LRT/MRT (Light Rail Transit and Metro Rail Transit) extend to about 50 kilometers (km) versus cities like Tokyo which has 300 kilometers subway network. By helping develop Metro Manila’s mass transit system, we can expand growth and develop surrounding cities.”
For the northern part of the NSRP, the DOTC will construct a 37-kilometer elevated commuter railway, with 10 stations running from Malolos, Bulacan to Tutuban, Manila.
The south part of the NSRP under PPP, meanwhile, involves the construction and operation of a 653-kilometer commuter railway from Tutuban to Calamba, in Laguna province, and a long haul rail operations on the branch line from Calamba and Batangas province and from Legaspi, Albay to Matnog, Sorsogon.
The whole NSRP will also require a total of 104 cars and the installment of electro-mechanical systems.