Luzon infra projects lined up

Six major infrastructure projects worth P30 billion are scheduled to be completed this year at the so-called Luzon Urban Beltway "super-region." The North Luzon Exporessway will soon be connected to the South Luzon Expressway under the ³Luzon Urban Beltway² scheme. In a statement, Secretary Edgardo D. Pamintuan, super-region head, said the projects include the P29.33-million terminal radar and the P68-million passenger terminal expansion at the Diosdado Macapagal International Airport in Clark Special Economic Zone; the P20.97-billion Subic-Clark-Tarlac Expressway, the P6.9-billion Subic Bay Port Development project, the P50-million Lucena Port improvement, and the P1.3-billion road connecting the North Luzon and South Luzon expressways via the C-5 road. The timetable will span from March to November, Mr. Pamintuan said, noting that the Clark airport radar is due in March. The Subic Bay Port’s completion will follow in June. The Clark airport passenger terminal is scheduled to be completed in August, while the Lucena Port will be finished by September. Segment 1 of the North and South Luzon expressway connection is due in October while the Subic-Clark-Tarlac Expressway will be completed by November. The Luzon Urban Beltway, which covers Central Luzon, the National Capital Region, Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon), Marinduque, and Mindoro, is one of the five "super-regions" designated by President Gloria Macapagal Arroyo in her 2006 State of the Nation Address. The infrastructure projects at the Clark airport are being funded by state firms. The Subic-Clark-Tarlac Expressway and the Subic Bay Port will be funded through official development assistance from the Japan Bank for International Cooperation (JBIC). The North and South Luzon expressway connection is being undertaken by the Manila North Tollways Corp. Meanwhile, the Japanese government has agreed the finance two local projects amounting to 20 billion yen under the 27th Yen Loan Package this year. Rolando G. Tungpalan, National Economic and Development Authority (NEDA) assistant director-general, said the Japanese government has pledged to fund the Pinatubo Hazard Urgent Mitigation Project Phase III and the Agrarian Reform Infrastructure Support Project Phase III. The Japanese government and the NEDA signed the omnibus minutes of discussion Thursday, which Mr. Tungpalan said is only a step away from the signing of the formal commitment for the yen loan agreement. Mr. Tungpalan said the commitment by the Japanese government signals the resumption of the country’s yen credit, which was suspended in 2003. The agrarian reform infrastructure project, which will be implemented by the Department of Agrarian Reform, and the Pinatubo project will cost ¥17 billion and ¥10.8 billion, respectively. Yen loan packages from Japan are concessional loans with a long-term payment period of 30 years and a grace period of 10 years, undertaken through the (JBIC). Of the total project cost of ¥27.8 billion, JBIC has been requested to shoulder ¥19 billion. The agrarian reform project will involve the financing of productivity enhancing projects in 129 agrarian reform communities in 54 provinces. Projects include the construction of communal irrigation systems, post-harvest facilities, and roads, bridges, and water supply systems. The project is targeted for implementation starting this year until 2013. The Pinatubo project under the Department of Public Works and Highways involves flood control at the Porac-Gumain River in Pasac Delta, as well as facilities for the restoration of areas affected by the Mt. Pinatubo eruption in 1992. The project is due for completion by 2011. "The approval of the two projects now clearly signals that we have resumed yen credits with Japan following the good progress that we have made on previous items that have caused the holding in abeyance of previous projects," said Mr. Tungpalan. The Japanese government had deferred action on the 27th package after finding out that the Philippine government failed to use up the 26th package in 2003. The two remaining projects for the 26th package are the P4.5-billion Pasig-Marikina River Channel Improvement Project and the Agno River Flood Control Project. Mr. Tungpalan said the Pasig-Marikina project is due for renegotiation soon while the Agno River project will be addressed separately, and is no longer linked to the 27th Yen Loan Package. The issue on value-added tax (VAT) refunds claimed by Japanese contractors has been addressed by the Philippines through a "viable mechanism" for the payment of the VAT claims, said Mr. Tungpalan. "We have completed the portfolio cleanup process and we are continuing this process," he said. Refunds have reached P327.77 million, owed by six agencies and one local government unit in 2004 to Japanese contractors. Under an exchange of notes between the Philippine and Japanese governments, Japanese contractors are exempted from paying the national sales tax. However, due to lack of local funding, Japanese contractors were forced to advance the VAT payments to ensure that the projects pushed through. — Beverly T. Natividad/BusinessWorld