Tuesday, 26 May 2009

ICC Cabinet Committee approves hike in cost of Manila Central Rail Terminal

Cai U. Ordinario
Business Mirror

THE interagency Investment Coordination Committee (ICC) Cabinet Committee recently approved the reevaluation of the Metro Manila Integrated Rail Terminal (MMIRT) and the Renewable Energy and Climate Change (REACH) facility.

Documents said the Department of Transportation and Communications (DOTC) stated the MMIRT will have an additional cost of around P777.598 million while Land Bank of the Philippines stated that REACH will cost P6.2 billion.

The MMIRT is the central terminal to be constructed on Edsa where Metro Rail Transit (MRT) Line 3 and 7 will connect with Light Rail Transit (LRT) Line 1. It will close the MRT 3-LRT 1 loop that will provide seamless rail operation.

The Central Terminal will be located in front of the newly constructed SM North Annex, which will also change the design of the EDSA North Avenue station of MRT 7.

The estimated additional cost for the MMIRT of P777.598 million already consists of additional costs due to the ongoing LRT Line 1 North Extension and the MRT 3. Initially, the estimated total cost of the project was P1.558 billion.

However, documents stated that due to the deductive costs from the LRT 1 North Extension worth P780.084 million, the entire additional cost is estimated at P777.598 million.

The additional cost will increase the total project cost to P7.387 billion, which is a 12.3-percent increase over the 2007 ICC approval of P6.323 billion. The project now has an economic internal rate of return of 18.39 percent and a net present value of P1.105 million at a 15-percent discount rate.

“[The total cost] already includes the P460-million project-cost component for the viaduct and integrated MRT 3 and MRT 7 station originally included in the MRT 7 project cost, which may possibly be advanced by the government.

The net cost impact of the project is P317.599 million,” documents stated.

The project has a target completion date of May 2010 for the viaduct and expected revenue operation by August 2010. The implementation schedule assumed that the construction started works in February.

Meanwhile, the REACH facility aims to provide medium- to long-term credit to subborrowers nationwide, enabling them to pursue projects on renewable energy, climate-change mitigation and adaptation, including projects featuring the European Union’s interests.

Around 50 percent or P3.1 billion of the P6.2 billion-worth project cost will be financed through the European Investment Bank, loan while the remainder will be provided through the LandBank and other banks financing and/or borrower’s equity.

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