MRT-3 (File photo from Philippine Daily Inquirer)
The Philippines and Japan have reached a deal on the rehabilitation and maintenance of the congested Metro Rail Transit (MRT) that has suffered at least 500 disruptions in 2017, according to the Department of Transportation (DOTr).
DOTr OIC Undersecretary for Railways TJ Batan on Tuesday said that Japan has committed to extend official development assistance for the MRT’s rehabilitation and maintenance efforts through a loan agreement.
“The arrangement with Japan involves obtaining Official Development Assistance (ODA) financing under Japan International Cooperation Agency’s (JICA) Special Terms for Economic Partnership (STEP),” Batan said in a statement.
Batan said that under ODA projects with the Philippines, terms include 0.1% interest per annum, 40 years payment period, and 12 years grace period for the principal.
“Japan is committed to extend official development assistance for the MRT-3 Rehab and Maintenance Project. The loan agreement that will be signed is for formalizing the specific terms of Japan’s assistance for MRT-3,” he said.
Japan has agreed to let JICA conduct a feasibility study in January to February, Batan said.
This would be followed by the signing of a loan agreement and procurement of a rehabilitation and maintenance provider around March to April, he said.
The mobilization of a new Japanese provider was expected within the 2nd quarter of 2018, Batan said.
“The procurement of a Japan-nominated rehabilitation and maintenance provider will be done pursuant to JICA’s procurement guidelines. Given the urgent need to restore MRT-3’s reliability and capacity, Japan has given assurances that it will nominate a provider that is highly qualified, and has a robust and reliable track record,” he said.
“These developments show that we are wasting no time and effort in rehabilitating and restoring the reliability and capacity of MRT-3. This year, we will make significant improvements to MRT-3, and that is our commitment to the Filipino commuters,” Batan said.
The Department of Transportation (DOTr) blamed the disruptions of the MRT on the “poor performance” of Busan Universal Rail Inc. (Buri) in maintaining the congested transit line.
Last October, the DOTr issued a notice of termination against Buri for failing to “ensure the availability of contractually obligated number of trains, and more importantly, to put in operation reliable and efficient trains.”
“The termination was intended to promote accountability and ensure that taxpayers’ money is not being spent on a non-performing service provider,” Batan said. /je