Philippines, Japan swap note verbales for ODA on MRT 3 rehab, maintenance

January 9, 2018

The Philippines and Japan have exchanged note verbales which paves the way for obtaining Official Development Assistance (ODA) financing under Japan International Cooperation Agency's (JICA) Special Terms for Economic Partnership to rehabilitate and maintain  the MRT 3 line, the Department of Transportation (DOTr) said in a statement Tuesday.

In Japan's other ODA projects with the Philippines, terms include 0.1 percent interest per annum, 40 years payment period, and 12 years grace period for the principal.

The next step is for JICA to conduct a feasibility study, which will refine the project's scope of works.

This will be done in January to February, after which relevant government approvals will be obtained.

Signing of the loan agreement and procurement of the rehabilitation and maintenance provider will then follow in March to April, and mobilization of the Japanese provider for MRT 3 is expected within the second quarter.

"The loan agreement that will be signed is for formalizing the specific terns of Japan's assistance for MRT-3," said TJ Batan, OIC Undersecretary for Railways.

The procurement of a Japan-nominated rehabilitation and maintenance provider will be done pursuant to JICA's procurement guidelines.

Given the urgency to restore MRT-3's reliability and capacity, Japan has given assurances that it will nominate a qualified service provider.

“These developments show that we are wasting no time and effort in rehabilitating and restoring the reliability and capacity of MRT-3. This year, we will make significant improvements to MRT-3, and that is our commitment to the Filipino commuters,” said Batan.

In November 2017, the DOTr terminated its contract with Busan Universal Rail Inc. (BURI) as the MRT-3’s maintenance provider, citing BURI’s failure to perform its maintenance obligations and procure spare parts. DMS