The Finance Department and Japan International Cooperation Agency on Thursday signed a 38.1-billion-yen (P18.76 billion) loan agreement for the upgrading and rehabilitation of Metro Rail Transit Line-3 system.
Finance Secretary Carlos Dominguez III signed on behalf of the Philippines, while Jica senior vice president Yasushi Tanaka signed on behalf of the government of Japan. The project aims to improve the safety, reliability, and level of service of the 16.9-kilometer light rail system with 13 stations spanning across Edsa.
The Finance Department said given the urgency of the rehabilitation of the line, the Philippine government adopted the “fast and sure” approach” with Japan in processing the approval of the loan for the project, in the record time of less than three months.
The board of the National Economic and Development Authority chaired by President Rodrigo Duterte gave the go-signal for the project on Aug. 22, which was followed 77 days later by the signing of the loan agreement Thursday.
“This is by far the fastest loan processing we have completed,” Dominguez said after the signing ceremony and exchange of notes on the loan agreement.
Dominguez thanked Japan for its “generous financing support” for the project and for moving as fast as the Philippine government had done to get the rehabilitation of the MRT-3 started.
Dominguez assured the riding public that the government “will rebuild and reinvent this vital rail service as quickly as possible.”
He said the MRT-3, which has “degraded to a sad state” and “brought our commuters unspeakable hardship” to the point of becoming “a symbol of where our country fails” would not only be rehabilitated but its operations also expanded and modernized with the help of this ODA loan from Japan. Julito G. Rada
A day before the signing, Foreign Affairs Secretary Teodoro Locsin Jr. and Ambassador Koji Haneda had signed the exchange of notes on the Japanese loan for the MRT-3 rehabilitation project.
The MRT-3 rehabilitation project will cost a total of P21.96 billion ($413 million), of which 38.1 billion yen ($362 million) will be funded by an official development assistance loan from Japan.
The balance of P3.19 billion (a$62 million) will be funded locally.
Under the terms of the accord, the loan covers an interest rate of 0.10 percent per annum for non-consulting services and 0.01 percent per annum for consulting services, with a maturity period of 40 years inclusive of a 12-year grace period.
“This is by every measure a very soft loan that will enable us to address a very pressing problem,” Dominguez said.
Dominguez said the project would address the problems of the decrepit MRT-3 system in the “most comprehensive fashion” through the replacement of all worn-out tracks, upgrading of the train’s obsolete signaling system and the general overhaul of the 72 light rail vehicles that are already 15 years old.”
The rehabilitation project will result in the expansion of the MRT’s current degraded capacity and modernization of all its subsystems, he said.
Dominguez said that with the upgrades to be done, the Department of Transportation, the implementing agency for the project, expected the number of operating train sets for MRT-3 to increase from 15 to 20 at peak hours, with time intervals of train arrivals reduced by half from 7 minutes to only three-and-a-half minutes.
With the system rehabilitation, MRT-3 is also expected to increase its train speed from 30 kilometers per hour to 60 kph.
Dominguez said the project would include the addition of carriages “to fulfill the original design of the stations.”
The DOTr tapped the services of Sumitomo-Mitsubishi Heavy Industries, the original maintenance provider of MRT-3.
Sumitomo started the maintenance services on Oct. 15 even before the loan agreement was signed to help accelerate the process of rehabilitating the rail system.
From servicing 500,000 passengers per day in 2012, the MRT-3 was only able to accommodate around 388,000 passengers in 2017.