PH secures $130 million loan deal for MRI-3 rehab

The government has signed a loan agreement with the Japan International Cooperation Agency (JICA) to rehabilitate line 3 of the subway.

Finance Minister Benjamin Diokno and JICA chief Sakamoto Takema signed an agreement for an additional $130 million loan at the Finance Ministry on Friday.

The funding program, approved by the National Economic and Development Authority (NEDA) Board on February 2, will be used to finance an increase in the total cost of the project by 29.6 billion pesos, in accordance with additional work requirements presented by the Ministry of Transportation.

These include integration and capacity expansion, full rehabilitation, operation and maintenance concession in accordance with the expiration of the build-lease-transfer agreement in 2025; and the addition and extension of maintenance work due to delays caused by the Covid-19 pandemic.

The rehabilitation project was first approved by the NEDA board on August 8th. December 22, 2018 in order to modernize the MRT-3 system and services.

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It includes provisions on the capacity of rolling stock, rail tracks, signaling systems, power supply systems, contact networks, communication systems, depots and station equipment.

The JICA loan is concessional because it has an interest rate of 0.10% per annum for non-consulting services and a lower 0.01% per annum for consulting services that are repayable over forty years with a 10-year grace period.

The Finance Department said that as of March, Japan remained the country’s top official development assistance (ODA) partner, with a total ODA commitment of $10.4 billion, including loans and grants.

After Friday’s signing, Japan’s total net loan commitments are now around US$10.3 billion, and the total ODA commitments are US$10.5 billion.

Earlier this year, two $2.8 billion loans were signed with JICA for the North-South Commuter Rail Project (Phase I) and the NSCR Expansion Project (II).