Japan loan to help Manila upgrade its faltering rail system

15, Nov. 2018

MANILA, NNA - Japan and the Philippines have signed an agreement on a 38.1 billion yen ($334 million) soft loan for upgrading Manila Metro Rail Transit Line 3 to enable a smoother commute in the capital.

The Japan International Cooperation Agency will finance most of the 21.96 billion-peso ($413 million) project. The remaining sum will be funded locally, the Philippines’ Department of Finance said.

The loan has an interest rate of 0.10 percent per year for non-consulting services, and 0.01 percent for consulting services. It has a maturity period of 40 years, including a grace period of 12 years.

“[We are] pleased that we can contribute to the MRT Line 3 to be a safe and comfortable train (system) again by using Japanese advanced rehabilitation technologies,” JICA senior vice president Yasushi Tanaka said during the signing ceremony last week.

MRT Line 3 is the country’s primary mass transit system traversing the major routes in Metro Manila. It started full operation in 2000 after almost four years of construction.

About 350,000 commuters take the MRT-3 daily, according to the Department of Transportation. Many of the passengers work in central business districts in the cities of Makati and Pasig.

Deteriorating conditions on the line have led to frequent train stoppages, engine breakdowns, system failures, faulty air-conditioning and other discomforts for commuters.

The Department of Transportation said the rehabilitation will be complete in 26 months, ensuring the MRT-3 returns to normal.

The work encompasses the MRT-3 electromechanical system, power supply, rail tracks, depot equipment, and an overhaul of rolling stock.

The department expects the number of operating MRT Line 3 trains to rise from 15 to 20 at peak hours, with train arrival time halved to only three-and-a-half minutes from the current 7 minutes. Train speed is also expected to increase to 60 kilometers per hour from the current 30 kph.

The Philippines is again drawing on the services of Japanese trading house Sumitomo Corp. and its technical partner Mitsubishi Heavy Industries Ltd., the original maintenance providers of the train system, for their fast restoration work.

Japan has been a long-standing development provider and top aid donor, according to the Philippines’ National Economic and Development Authority.

Aside from the MRT-3 rehabilitation project, Japan will also provide about 105 billion yen in soft loans for the first tranche of the Philippines’ Metro Manila Subway project aimed at easing traffic congestion in greater Manila.