Japan may lend $346M for MRT-3

JAPAN is considering a 38.101 billion-yen (about $346 million) official development assistance (ODA) loan for the rehabilitation of Metro Rail Transit (MRT)-3, and an additional 4.37 billion yen for the ongoing construction of the New Bohol Airport.
The Department of Finance (DoF) said in a statement over the weekend that Japan has expressed its intention to provide the new loan packages during the fifth meeting of the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation on June 20 in Tokyo.
“Finance Secretary Carlos G. Dominguez III said that during the 5^th meeting of the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation, Japanese officials expressed their government’s intention to provide indicative official development assistance (ODA) loan financing of about 38.1 billion yen for the MRT Line 3 Rehabilitation Project and an indicative supplemental loan of some 4.37 billion yen for the second phase of the New Bohol Airport Construction and Sustainable Environmental Protection Project ‘subject to the necessary Philippine and Japanese Government approval processes,’” the DoF statement read.
According to the Ministry of Foreign Affairs of Japan, about twice as many trains in the 17-kilometer railway should be operational by 2022 after the rehabilitation period.
The Department of Transportation (DoTr) said the Philippine and Japanese governments started negotiations and feasibility studies for the MRT rehabilitation in January, after both parties exchanged notes on the ODA terms.
Meanwhile the new ODA loan for Phase 2 of the New Bohol Airport — which is expected to be completed this month — will meanwhile cover the increase of construction costs due to “the subsequent large currency exchange rate fluctuations and other factors.”
This will supplement the 10.7 billion-yen loan Japan provided in 2013.
Both loans will have an interest cost of 0.1% per annum, payable in 28 years with a 12-year grace period, and will require the participation of Japanese contractors.
Both countries also firmed up the proposed pipeline of infrastructure projects to be built with Japanese assistance.
These include the: Malolos-Clark Philippine National Railways (PNR) North 2 Project; the Tutuban-Laguna PNR South Commuter Line; the Pasig-Marikina River Channel Improvement Project; and the Road Network Development Project in Conflict-Affected Areas in Mindanao.
“We are targeting to sign the Exchange of Notes for both projects in November 2018,” Mr. Dominguez said. “We will also exert efforts to achieve the challenging goal of making the North rail section partially operational by 2022.”
“Both sides will continue to have consultations at the technical working level to accelerate implementation and address challenges for the railway projects,” he added.
Both parties also reported the progress of ongoing projects such as the land acquisition and relocation of utilities for Metro Manila Subway Phase 1.
The Philippines and Japan also agreed to explore further cooperation in urban development projects in Cebu and Davao, particularly in the areas of information and communications technology, energy, agriculture, environment, public safety, and disaster prevention.
Both countries signed the Letter of Intent for Technical Cooperation between the Department of Energy (DoE) and the Japan Ministry of Economy, Trade, and Industry on the Action Plan on Electric Power, which aims to help resolve issues plaguing the Philippine power sector, such as the need to improve generation efficiency and electrification rates.
They also signed the amended joint venture agreement between the Bases Conversion and Development Authority and the Surbana Jurong Group, which “restates their commitment” to develop New Clark City.
According to the DoF, there are about 12 Japanese ODA projects “already delivered” since the new administration took over.
Mr. Dominguez and Socioeconomic Planning Secretary Ernesto M. Pernia led the Philippine delegation, while led by Chief Cabinet Secretary Yoshihide Suga and Shigeru Kiyama, the special advisor to the Cabinet, represented Japan.
“This is now our fifth meeting since March 2017 and it is evident that our frequent meetings are beginning to bear positive results. Indeed, our commitment and efforts to fast-track loan processing and project implementation are gaining headway,” Mr. Dominguez told the Japanese delegation.
“As a result of these high-level meetings, our various agencies have been coordinating regularly to implement our agreed and joint actions to facilitate and hasten project implementation,” he added.
Mr. Suga said: “This joint committee has been (convening) for the important plan in developing multi-layer bilateral cooperation since we discussed cooperation in various areas such as traffic and transport infrastructure problems, the Metro Manila Subway project, peace and development in Mindanao, safety and counter-terrorism measures and information and technology.” — Elijah Joseph C. Tubayan