Railway PPP project clears major hurdle
August 26, 2014 at 11:49
SAN MIGUEL Corp. (SMC) is a step closer to starting work on its planned P62.7-billion Metro Rail Transit Line 7 (MRT-7), after the Finance department approved the state’s guarantee for the project, a cabinet official said recently.
Mr. Purisima said in a text message yesterday that he “signed the performance undertaking on July 23, after receiving authority to do so by the President.”
San Miguel officials were not immediately available for comment.
“Once the performance undertaking is given, San Miguel should commence financial close. I’m urging them [sic] to do it sooner than 18 months, but they are saying they could do advanced works once they get the green light,” Mr. Abaya had explained when asked on the next step, adding that he expects work on MRT-7 to start “before next year.”
MRT-7 — a project that will extend one of the rail systems now servicing Metro Manila — will consist of a 22-kilometer (km), six-lane asphalt highway that will connect North Luzon Expressway to an intermodal transport terminal in San Jose del Monte City, Bulacan, as well as a 22-km largely elevated railway with 14 stations that will stretch from San Jose del Monte City to the integrated Light Rail Transit Line 1-MRT 3-MRT 7 station at the northern part of EDSA.
MRT’s extension to Bulacan could be completed by mid-2018 at the earliest, assuming construction starts within the year, according to the 2013 annual report of San Miguel, which had then noted that the project “has… secured necessary government approval to proceed with construction” and was, at that time, just “awaiting the release of the performance undertaking.”
The Finance department had said last February that it had endorsed such guarantee to Malacañang, which was to give the final green light for the project.
“From there, the processing of the financial closure can immediately be initiated and is expected to be received by 2014,” San Miguel had said in its annual report.
“Construction of the… road-and-rail transportation (system) will begin immediately after this, and will take an estimated 42 months to complete.”
Japan’s Marubeni Corp. had bagged the project’s engineering procurement contract.
San Miguel, through subsidiary San Miguel Holdings Corp., has a 51% interest in Universal LRT Corporation Ltd., which in turn holds a 25-year concession for the railway-cum-road project.
Seven public-private-partnership (PPP) projects have been awarded, so far, since the program’s 2010 launch: P2.01-billion Daang Hari-South Luzon Expressway Link Road; P15.52-billion Ninoy Aquino International Airport Expressway; P16.42-billion first phase of the PPP for School Infrastructure Project (PSIP); PSIP’s P8.80-billion second phase; P5.69-billion Philippine Orthopedic Center modernization; P1.72-billion Automatic Fare Collection System; and P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building. – C. J. V. Dela Paz
