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News Top Stories Gov’t, proponent sign contract to build $ 1.24-B MRT 7 project
News Top Stories Gov’t, proponent sign contract to build $ 1.24-B MRT 7 project
| Gov’t, proponent sign contract to build $ 1.24-B MRT 7 project |
| Thursday, 19 June 2008 05:38 | |||
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The contract-signing was led by Transportation and Communications Secretary and ULC president and CEO Eli Levin. The project proponent has also posted $ 123.5-million non-refundable bond, a government requirement to ensure the project’s implementation. The contract-signing came 7 years after the signing of a memorandum of understanding for the MRT 7 project by the DoTC and ULC in 2002. Levin noted the MRT 7 is the first private sector undertaking that assumes full responsibility for the ridership and the operation and maintenance cost. Under its timetable, the project which would be implemented by ULC Hong Kong, would be implemented in 12 to 15 months from now and is expected to be completed in 3 and half years or by 2013. The $ 1.235 billion rail project would be funded through 75 percent loans and 25 percent equity from its shareholders. ULC Hong Kong will raise the $ 309 million equity investments from different investors including the Zamora Group and the La Costa Development Co. headed by businessman Salvador Zamora II with their foreign partners as major investors. The bulk of the project cost of $ 926 million would be sourced through loans from export credit agencies from various countries and suppliers credits. A financial closing is expected by December 2009 and construction should start in January 2010. Levin said the project proponent has no sovereign guarantee for the loans it is going to incur. Project components include a 12.11 kilometer of elevated mass rail transit, 6.655 kilometer at-grade MRT, 1.445 km. open-cut MRT, .785 km. tunnel MRT and 6 lane road. The project envisions to provide reliable connection for Commonwealth, Fairview and Bulacan commuters. Levin said the project will address the congested EDSA as it will provide an alternative route for the provincial buses coming from the north. This mass rail trail project has also a real estate component that seeks to establish a new satellite township in Del Monte, Bulacan. Already, the project proponent has already bought 193 hectare property worth P1 billion in San Jose Del Monte. An estimated P2 billion are expected to be poured in by property developers for horizontal and vertical developments including the planned construction of 50,000 units intended to cater to low and middle income earners. Several property developers have already committed to put up housing projects in the area, which is envisioned to create 50,000 housing units. Start of the real estate construction is expected to start in July 2011. Already, mall developers have expressed commitment to participate in the commercial development. The project is expected to decongest Metro Manila with the construction of a satellite town in San Jose Del Monte. A study conducted by the National Economic and Development Authority indicates a government savings of $ 2.4 billion over the 25 year concession period based on a crude oil price of $ 50 per barrel. The project and the satellite township undertaking is also expected to create over 20,000 new jobs throughout the concession period. (BCM)
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