PHL, ADB sign pact on first tranche of $2.75-B loan for Malolos-Clark Railway Project

The Philippine government and the Asian Development Bank (ADB) have signed a $1.3-billion loan agreement representing the first tranche of the US$2.75 billion financing for the construction of a 53.1-kilometer passenger railway that will connect Malolos in Bulacan to the Clark International Airport (CIA) in Pampanga, the single largest infrastructure investment ever of the multilateral institution here or in any other country.

According to the ADB, the Malolos-Clark Railway Project (MCRP) will benefit around 342,000 passengers per day along the Manila-Clark corridor and up to 696,000 passengers per day traveling daily to Calamba when it is expected to be completed by 2025.

On top of providing affordable, reliable and safe public transport, the MCRP is also expected to reduce greenhouse gas emissions from motor vehicles, and will reduce travel time from Manila to CIA to less than an hour from the current time of 2 to 3 hours by car or bus.

President Duterte witnessed last Thursday`s signing of the MRCP loan agreement at Malacanan Palace by Finance Secretary Carlos Dominguez III, on behalf of the Philippines, and ADB vice president Ahmed Saeed for the multilateral financial institution.

“This project will more than pay for itself and bring convenience to hundreds of thousands of commuters a day in what will be an extremely busy Manila-Clark corridor in the coming years,” Dominguez said.

The estimated total project cost for the MCRP is US$6.139 billion, which will be co-financed by the ADB and the Government of Japan through the Japan International Cooperation Agency (JICA).

The ADB will fund US$2.75 billion or 44.8 percent of the total project cost, while JICA will finance US$$2.011 billion or 32.75 percent. The Philippine government’s counterpart funding of 22.45 percent amounts to US$1.378 billion.

“This loan demonstrates the close coordination between multilateral agencies and our bilateral development partners,” said Dominguez.

“I am happy our development partners have adapted quite well to the `Fast and Sure` approach in getting the major infrastructure projects going,” Dominguez added. “The ADB and the Japanese Government are indeed our friends and partners in their untiring support for the country’s growth and development.”

Dominguez noted that “this much-delayed project is finally pushing through” as part of the Duterte administration’s ‘Build, Build, Build’ infrastructure modernization program. The project was first conceptualized in the late 1990s, with preparatory construction starting in 2006 but scrapped in 2011.

ADB’s US$2.75 billion loan is the largest sum extended by the Bank to the Philippines, which hosts its headquarters, or to any other country, since its establishment in 1966.

On the part of the ADB, the financing for the MCRP will be in three tranches, with each considered as stand-alone loans. The second tranche is a US$1.0 billion loan, while the final one is for US$450 million.

The ADB’s loan will fund the civil works aspect of the project, such as the construction of viaduct, bridges, stations, tunnels and depots. JICA, meanwhile, will finance the core system, such as the tracks, depot equipment, power supply and electrification, signaling and telecommunications systems, and procurement of rolling stock, as well as consulting services.

The MCRP is part of the 163-km North-South Commuter Railway (NSCR) System that is designed to connect New Clark City in Capas, Tarlac, and CIA and Clark in Pampanga in the north with Metro Manila and Calamba in the south by 2025.

Last Jan. 21, the DOF and JICA signed the 167.199 billion yen loan accord for the NSCR Extension Project, which consists of the MCRP and the South Commuter Line of the North-South Railway (running from Solis in Manila to Calamba in Laguna). Photo: ADB