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Japan financing for Metro Manila subway may be ready by March

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Japan's Prime Minister Shinzo Abe speaks during a news conference at his official residence in Tokyo, Japan, October 6, 2015. -- REUTERS

By Melissa Luz T. Lopez,
Senior Reporter

THE PHILIPPINES hopes to obtain next month an initial financing package from Japan for the construction of the country’s first subway line, following a meeting between the two sides yesterday in Cebu City.

In a statement, the Department of Finance (DoF) said both economies “are looking forward to the signing of the first tranche of the loan for the Metro Manila Subway Project (Phase I) by March 2018.”

Finance Secretary Carlos G. Dominguez III and Socieconomic Planning Secretary Ernesto M. Pernia represented the Philippines during the latest meeting of the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation at Shangri-La Mactan.

Hiroto Izumi, a special advisor to Japanese Prime Minister Shinzo Abe, led the delegation from Tokyo. This is the fourth meeting held by the two parties since March 2017.

The subway plan aims to build a 25-kilometer underground rail system that will connect Mindanao Avenue in Quezon City to the Ninoy Aquino International Airport in Parañaque. Construction is expected to cost P355.6 billion, higher than the previous estimate of P227 billion.

President Rodrigo R. Duterte approved the subway plan in September, with construction expected to start within the first half of 2018. This forms part of the P8.44 trillion “Build, Build, Build” initiative of the administration, which seeks to address connectivity issues and improve the ease of doing business by providing reliable mass transport and road networks nationwide.

Funding for the rail project will be sourced from official development assistance (ODA) from Japan, which will also support two other train lines run by the Philippine National Railways (PNR) which will connect parts of Luzon.

The two countries also committed to fast-track discussions in order to have the subway line to be “partially” operating by 2022, earlier than the original target of mid-2025.

“The Philippine side discussed the progress on the right-of-way acquisition and land resettlement, institutional arrangements on procurement, establishment of Project Monitoring Offices, budget allocation for government counterpart and measures to address cross-sectoral concerns,” the DoF said following the high-level meeting.

For its part, the Japanese delegates outlined steps to “fast-track project/loan processing and implementation” through a shorter review period for procurement, as well as extending grant support for advance works for detailed project designs.

Other agreements signed during Monday’s meeting are a memorandum of cooperation among the Bases Conversion and Development Authority, Japan Overseas Infrastructure Investment Corp. for Transport and Urban Development, and Singapore’s Surbana Jurong for the “New Clark City” project; as well as a partnership between the Department of Information and Communications Technology and Japan Ministry of Internal Affairs and Communications for a technical assistance for a National Broadband Plan.

The two nations expect to sign an exchange of notes for Japan’s financing of a waste-to-energy facility in Davao City in succeeding meetings. Loan packages for the Pasig-Marikina Channel Improvement Project Phase IV and the rehabilitation and improvement of the Metro Rail Transit-3 are also expected “in the coming months.”

Consultations for the PNR North-South commuter lines are likewise ongoing, with financing to be shared by the Philippine government, the Japan International Cooperation Agency and the Asian Development Bank, the DoF said.

Japan’s Mr. Abe pledged to contribute a total of 1 trillion yen ($9 billion) as ODA and investments in the Philippines over the next five years. The two nations agreed to collaborate on projects and issues on regional development, information and communications technology, energy, agriculture, environment, public safety, and disaster prevention.

Tokyo also pledged to deliver heavy machinery to help rebuild Marawi before March, alongside a new commitment to build shelters and community facilities for the city.