The P62.7-billion Metro Rail Transit Line 7 (MRT 7) is seen to be completed by 2018, a timeline that still depends on how fast the government could provide the necessary approvals to the project’s proponent.
In a disclosure to the Philippine Stock Exchange, San Miguel Corp. (SMC) said while the deal has secured government approval to proceed with the construction, the Department of Finance (DOF) has yet to issue the performance undertaking for the railway project.
A performance undertaking, a requirement for financial closure of a project that would be funded by official development assistance, is a financial guarantee from the government.
“From there, the processing of the financial closure can immediately be initiated and is expected to be received by 2014,” the Ang-led firm said.
“Construction of the 44-kilometer road and rail transportation will begin immediately after this, and will take an estimated 42 months to complete,” SMC added.
The rail component of the MRT 7 project involves the construction of a 22.8-kilometer rail-transit system that is envisioned to operate 108 rail cars in a three-car train configuration with a daily passenger capacity ranging from 448,000 to 850,000.
It will have 14 stations, starting at the North Avenue Station on Edsa passing through Commonwealth Avenue, Regalado Avenue and Quirino Highway up to the proposed Intermodal Transport Terminal in San Jose del Monte, Bulacan.
The road component of the project, meanwhile, involves the construction of a six-lane access road from San Jose del Monte to Balagtas, Bulacan North Luzon Expressway Exit.
The 25-year concession agreement between Universal LRT Corp. (ULC) and the government was signed in 2008, but was delayed due to the proponent’s failure to secure financial closure.
ULC is partly owned by SMC.
Party-list Rep. Terry Ridon of Kabataan, a member of the House Committee on Transportation, earlier called for a review of the agreement, particularly the arrangement on the return of equity, the proposed fare scheme and the “socioeconomic impact” of the project, especially on families that will be displaced due to its construction.
He questioned the net revenue sharing presented in the concession agreement. The transportation department earlier revealed that ULC will receive 70 percent of net revenue, while the government will get 30 percent if the return on equity is below 11.9 percent.
Meanwhile, ULC and the government will get 50-percent shares each when the return on equity reaches the 11.9-percent to 14-percent range.
The lawmaker also questioned the fare scheme of the MRT 7.
Officials of the transportation agency have said in a congressional briefing that the proposed fare for a full 14-station single journey in the MRT 7 from North Avenue to San Jose del Monte, Bulacan amounts to P38 for the first year of operation, increasing at a 5-percent rate per annum for 25 years.
Ridon said under such rate, the initial P38 will increase to as much as P128.68 by the time the concession agreement ends after 25 years.
This is equivalent to a total of P90.68, or 238.63-percent overall increase, in the MRT-7 fare in a span of 25 years.
24 April 2014
By Lorenz S. Marasigan