GOVERNMENT officials of Japan and the Philippines have exchanged an unsigned diplomatic correspondence for the provision of a loan under Tokyo’s official development assistance (ODA) for the rehabilitation and maintenance of the Metro Rail Transit (MRT) Line 3.
Transportation Undersecretary for Rails Timothy John R. Batan called the exchange of the “note verbales” as a “major milestone for the much-needed rehabilitation and maintenance of the MRT 3.”
The arrangement with Japan, he added, involves obtaining ODA financing under Japan International Cooperation Agency’s (Jica) Special Terms for Economic Partnership.
Typically, Japanese ODA packages in the Philippines involve the following terms: 0.1 percent interest per annum, 40 years payment period and 12 years grace period for the principal.
“These developments show that we are wasting no time and effort in rehabilitating and restoring the reliability and capacity of the MRT 3,” Batan said late Tuesday.
The next step, he added, 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 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 is expected within the second quarter.
The procurement of a Japan-nominated rehabilitation and maintenance provider will be done pursuant to Jica’s procurement guidelines.
Batan said that, given the urgent need to restore the MRT 3’s reliability and capacity, Japan has given assurances that it will nominate a provider that is highly qualified, and has a robust and reliable track record.
This early, Sumitomo Corp., the builder and previous maintenance provider of the MRT 3, has signified its interest in the said deal.
“This year we will make significant improvements to the MRT 3, and that is our commitment to the Filipino commuters,” Batan said.
The MRT 3 serves almost half-a- million passengers daily. It has been considered a perennial problem for the government due to the numerous daily breakdowns, unloading incidents, and stoppages.
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My layman’s understanding of a note verbale exchange is that it is informal (thus unsigned), basically a starting of intentions. Maybe one of our legal expert readers can confirm this? I mention this because the deteriotration of the MRT requires much more urgency, and while I understand there is a procedure for ODA, the DOTr should set our expectations realistically. this includes not getting our hopes up prematurely. Even assuming the next stage pushes through, the feasability study will be another hurdle. I am just wondering if there is not some way that Sumitomo or some other competent provider can do emergency repair work while we are awaiting the final word on the ODA?