San Miguel Corporation finally obtained a performance undertaking from the Department of Finance (DOF) after years of delay.
The proposed train project that is expected to serve 2 million commuters will start at Tala, Caloocan City, and pass through Lagro and Fairview, Novaliches, Batasan, Diliman, PHILCOA, before ending at EDSA corner North Avenue in Quezon City.
DOTC Secretary Joseph Emilio Abaya expressed optimism that San Miguel could do the financial closing soon.
“We asked them to do it (financial closure) sooner than 18 months. They are saying they could do advance works once they get the green light. We hope before next year they can start construction,” Abaya said.
He added that Finance Secretary Cesar Purisima already signed the performance undertaking for the public-private partnership (PPP) project.
The project, to be funded by official development assistance from Japan Bank for International Cooperation, needs a performance undertaking from the DOF representing a financial guarantee.
Years of delay
The construction of the 22.8-kilometer train line with 14 stations has been delayed for almost 4 years because of San Miguel’s failure to secure a performance undertaking from the DOF.
In 2008, DOTC signed a contract with Universal LRT Corporation Ltd (ULC BVI) to build the railway system and develop the project’s real estate and commercial components. San Miguel’s wholly-owned subsidiary San Miguel Holdings Corporation executed a share sale and purchase deal in 2010 to acquire 51% of ULC BVI from the group of Salvador Zamora II.
The MRT7 project worth $2.2 billion was supposed to start construction in 2010 and commercial operations by 2012. ULC BVI had said $320 million of the project’s total cost would be financed by equity, and the rest by borrowings.
DMCI Holdings Incorporated through construction arm DM Consunji Incorporated entered into a joint venture with Marubeni Corporation of Japan in 2012 for the engineering, procurement, and construction of MRT7 and its Intermodal Transportation Terminal. – Rappler.com
*($1 = P43.86)