THE governments of the Philippines and Japan have signed a Yen 17.4bn ($US 124.7m) loan agreement to partly finance the second phase of the Manila MRT-3 rehabilitation project. The financing will be provided through the Japan International Cooperation Agency (Jica).

The agreement was signed by Japanese interim Chargé d'Affaires, Mr Kenichi Matsuda, and Philippines foreign affairs secretary, Mr Enrique Manalo.

The rehabilitation will increase capacity by introducing new rolling stock, upgrading track, as well as the line’s signalling system, power supply, overhead catenary, communications systems, and depot and station equipment. The line will also be extended to Common station, where passengers can interchange with LRT-1, MRT-7 and the under-construction Metro Manila Subway.

The supplementary loan for MRT-3 was approved by the Philippines’ National Economic and Development Authority Board on February 2, and will be used to finance the increase in the total project cost to Pesos 29.6bn ($US 527.1m), following the additional scope of work submitted by the Department of Transportation.

The elevated MRT-3 runs along Epifanio de los Santos Avenue (EDSA), Metro Manila’s busiest road. The condition of the line’s infrastructure and rolling stock was deteriorating due to a lack of maintenance, resulting in reduced capacity and frequent operational problems. Immediate rehabilitation to restore safety and performance levels was carried out by Japanese contractors as under phase 1 of the project.

Following the signing of the funding agreement, the DOTr and Sumitomo Corp signed extended contracts worth Pesos 7.38bn for the rehabilitation and maintenance of MRT-3 from June 2023 until July 2025.

Sumitomo, the original designer, builder, and initial maintenance provider of MRT-3, will continue to provide maintenance and rehabilitation of the line, together with their technical partner, Mitsubishi Heavy Industries.

Sumitomo will begin using four-car trains instead of the existing three-car sets, increasing capacity.

The rehabilitation and maintenance supervision consultant contract awarded to Oriental Consultants Global and Tonichi Engineering Consultants was also extended by 30 months until October 2025.

The loan has an interim interest rate of 0.1% per annum, apart from the funding for consulting services, which has a rate of 0.01%. There is a 40-year repayment period, including a 10-year grace period.