The construction of the P62.7-billion Metro Rail Transit Line 7 may be delayed again, if San Miguel Corp. fails to meet the Feb. 19 deadline to submit financial closure on the project.
Financial closure refers to the process of completing all financial transactions related to the project.
Transportation Secretary Joseph Emilio Abaya told reporters San Miguel’s Universal LRT Corp. had yet to submit financial closure after receiving the performance undertaking for the MRT 7 project from the government in October 2014.
San Miguel, through unit San Miguel Holdings Corp., is a majority-owner of ULC, the proponent of the MRT 7 project.
The issuance of the performance undertaking triggered the obligation of ULC to achieve financial closing within 18 months from the receipt of the PU.
A performance undertaking represents a recognition of the obligation of the Philippine government through the Transportation Department under the concession agreement, particularly the remittance of semi-annual amortization payment in favor of ULC.
“The clear deadline is Feb. 19, if they don’t, the Neda board approval will expire and they are required to go back to Neda. So, we are hoping that they can get the financial close before Feb. 19,” Abaya said.
San Miguel president Ramon Ang earlier said the company aimed to start the construction of MRT 7 project in the first quarter of 2016.
Construction of MRT 7 has been delayed for about seven years, because of the proponent’s failure to secure a performance undertaking from the Finance Department.
MRT 7 involves the construction of a 22.8-kilometer rail system from North Ave. at the corner of Edsa in Quezon City, passing through Commonwealth Ave., Regalado Ave. and Quirino Highway up to the proposed intermodal transportation terminal in San Jose del Monte City, Bulacan. The project will cover 14 stations.
It also includes the construction of a 22-kilometer road that will connect to North Luzon Expressway near the Bocaue exit.
The railway is expected to serve some 2 million commuters in the northern parts of Quezon and Caloocan cities and the towns of Bulacan province.
ULC also plans to develop 900,000 square meters of commercial space in San Jose del Monte throughout the concession period.