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PHL, Japan sign loan agreement for P93-B Tutuban-Malolos railway

The P93-billion loan commitment by Japan to fund the Philippines’ North-South Commuter Railway (NCSR) Project was formalized on Friday, following the signing ceremony of both parties in Makati City.

Japan said it will lend the Philippines a total of ¥241.991 billion or approximately P93.457 billion to finance construction of the first phase of commuter railway project which stretches 36.7 kilometers from Malolos, Bulacan to Tutuban, Manila.

The deal was signed by Finance Secretary Cesar V. Purisima on behalf of the Philippines, and Japan International Cooperation Agency (JICA) Chief Representative Noriaki Niwa.

The project will entail the construction of about 37 kilometers of new elevated railway from Malolos to Tutuban, the procurement of rolling stock, and the installation of electro-mechanical systems.

It will also include the procurement of 104 cars.

"We will rebuild infrastructure thats crucial in moving not only people, but cargo. This is a big first step," Purisima said in his remarks during the signing ceremony.

"In 2010, the ADB estimated that the Philippines has $127 billion in infrastructure needs until 2020, equivalent to around 6.1 percent of the gross domestic product (GDP) per year," he said in a statement.

Purisima then noted that the country has "a lot of catching up to do," given the continued expansion of infrastructure spending which increased by 245.4 percent in the last five years, equivalent to 5 percent of the GDP.

"(W)e still appreciate development partners marching in lockstep with us on our priorities," he said.

The Department of Finance (DOF) said the railway will utilize aseismatic design technology usually used for earthquake-resilient structures, earthquake detection systems, corrosion-resistant steel, and signaling and communications systems for punctual and reliable operations.

In his remarks, Chief Representative Niwa noted that a country's economic competitiveness may be affected by its traffic situation.

"It is urgent to expand the economic opportunity to potential growth areas outside Metro Manila by building public rapid mass transport systems to attract more investment and realize the Philippine growth potential," he said in his remarks.

"It's timely for the Philippines to start its railway projects to ease traffic and improve mobility of logistics and ordinary commuters," he said in a separate statement.

"The Philippines' transit lines of LRT/MRT extend to about 50 kilometers versus cities like Tokyo which has 300 kilometers subway network. By helping develop Metro Manila's mass transit system, we can expand growth and develop surrounding cities," the statement read.

“This project aims to strengthen the transport network and ease serious traffic congestion in Metro Manila by constructing a commuter railway between Malolos and Tutuban (a part of the ‘North-South Commuter Railway Project’) and contribute to a more secure and sustainable economic development through promotion of investments,” the Japanese Embassy said last week.

According to the Japanese Embassy, the deal was reached by Japanese Ambassador Kazuhide Ishikawe and Foreign Affairs Secretary Albert F. Del Rosario on November 20.

The agreement was made in the presence of President Benigno S.C Aquino III and Japan Prime Minister Shinzo Abe who attended the Asia-Pacific Economic Cooperation (APEC) Summit in Manila.

Abe earlier said that Japan would provide funding and technology for the project which is set to be the biggest railway project of the government so far.

The Department of Foreign Affairs (DFA) on August said that the NSCR is expected to be the biggest official development assistance (ODA) yen loan package of to date that Japan has given any of its partners, with $2 billion.

The department said the “pledge follows the commitment of the Japanese government in firming up its cooperation with the Philippines for the said project as part of the PH-JP ‘Cooperation Roadmap for Quality Infrastructure Development in the Transport Sector in Metropolitan Manila Area.”

Japan remains to be one of the strongest development countries of the Philippines, with total ODA in loans and grants given second only to the World Bank.

The second phase of the project or the North-South Railway Project (NSRP) will be funded through the government’s public-private partnership (PPP) deal which will extend commuter lines from Tutuban to southern Metro Manila, which will stretch out further to the Bicol region.

“The proposed NSRP South Line PPP covers Metro Manila to Legazpi City, Albay, plus a number of existing and proposed branch lines totalling to approximately 653 km.,” the PPP center said in its website.

The P170.7-billion project consists of commuter railway operations between Tutuban, Manila and Calamba, Laguna.

It will also include long haul railway operations between Tutuban, Manila and Legazpi, Albay with extended long haul rail operations on the branch line between Calamba, Laguna and Batangas, as well as the extension between Legazpi, Albay and Matnog, Sorsogon.

"We should work on the aouthern portion of the rail also because the longer the rail the ultimate benefit also increases," Purisima said.

As of end-July, JICA's assitance to the country covers 18 ongoing and two new project loans totaling some $2.8 billion. It also has eight ongoing grant projects with a total worth of about $116 million. —NB, GMA News