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ADB OK’s its biggest infrastructure financing yet

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By Victor V. Saulon
Sub-Editor

THE ASIAN Development Bank (ADB) on Thursday approved financing for up $2.75 billion for the construction of a passenger railway linking Malolos in Bulacan to Clark economic zone and international airport in Central Luzon, making it the regional lender’s “single largest infrastructure project financing ever.”

The 53.1-kilometer Malolos-Clark railway is part of the Philippine government’s North-South Commuter Railway (NSCR) project, which spans 163 kilometers from New Clark City in Tarlac province in the north down to Calamba in Laguna province. The project is expected to be completed by 2025.

Markus Roesner, ADB principal transport specialist for Southeast Asia, said in a press conference in Mandaluyong City that what had been approved by the bank’s board yesterday is the elevated railway’s section from Clark International Airport, then the Clark area all the way down to Malolos.

“This will follow the existing railway alignment,” he said, adding that a short section will link the project to the Light Rail Transit (LRT) 1 station in Blumentritt through a “convenient” interchange.

The approved north rail transport system, which is targeted to be partially operational by 2022, will have a maximum speed of 160 kilometers per hour, with stops in seven stations designed to also accommodate the elderly and the disabled, he said.




Six contracts are now out for bidding to cover parts of the project, of which five are for the Malolos-Clark section, and one for the Solis-Blumentritt section. The contracts are for the railway system, electrical, mechanical, signalling, power supply, among others.

“Internationally experienced operation and maintenance contractor will be selected,” Mr. Roesner said, adding that any entity belonging to any of ADB’s 68 member countries could participate in the bidding.

The Malolos-Clark railway project can serve about 342,000 passengers daily along the Manila-Clark corridor and up to 696,000 passengers per day to Calamba by 2025. It is expected to reduce the travel time from Metro Manila to Clark International Airport to less than one hour by rail, compared with the 2-3 hours today by car or bus.

The project includes construction of two rail segments, namely: a 51.2-kilometer section connecting Malolos City in Bulacan to the Clark regional growth center, and a 1.9-kilometer extension connecting the NSCR to the Blumentritt Station in Manila, where an elevated interchange station for LRT Line 1 will be built.

ADB will be financing the civil works of the Malolos-Clark railway project, including the stations, bridges, and viaducts for the elevated railway alignment, and a tunnel leading to the underground station in Clark International Airport. The bank will also support the government in using global standards for procurement, and environmental and resettlement safeguards.

Mr. Roesner said the project is co-financed with up to $2 billion by the Japan International Cooperation Agency (JICA), which will finance the rolling stock and the railway systems. ADB policy also calls for the Philippine government to should a portion of the financing, which will cover the relocation of the informal settlers and the shifting of public utilities, he said.

“Additional contracts will be bid out later this year for the section to Calamba. This is still for finalization,” he said.

In an interview after the briefing, Mr. Roesner said financing for the Blumentritt-Calamba section is still being finalized.

“We’re still finalizing the design. It’s almost the same size,” he said.

Asked about when he expects loan approval to take place, he said: “About the same time next year, so May, June next year.”

He said the Manila section of the project is “technically more complicated” because of the informal settlers right beside the existing Philippine National Railways line, thus the design of the financing for the southern section takes longer.

“That’s why we decided to start first in the north,” he said.

In a press release issued during the press conference, ADB quoted Takehiko Nakao, its president, as saying: “It will be ADB’s single largest infrastructure project financing ever, and from a development perspective, we are pleased this investment is taking place in ADB’s host country.”

“The project, combined with other investments in light rail transit, metro rail transit, and subway systems, will bring back the culture of rail transport in Metro Manila.”

Vivencio B. Dizon, president and chief executive officer of Bases Conversion and Development Authority, said the project had seen several ground-breaking ceremonies, although none progressed until now.

“[The project is] truly something that we and the entire country have been looking forward to for so long,” Mr. Dizon said in the same briefing.

He said the Malolos-Clark railway supports the vision of the administration for the Clark and Subic area to become the next urban and economic center of the country.