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Japan extends a 242 billion yen ODA loan to the Philippines for failed rail project

  • 2015-11-24 15:00:00
  • , Sankei
  • Translation

(Sankei: November 21, 2015 – p. 5)

 

 At their summit meeting on Nov. 19, Japanese Prime Minister Shinzo Abe and Philippine President Benigno Aquino III agreed that Japan will provide about 242 billion yen in official development assistance (ODA) to the Philippines for a railway project. A section of the railway was contracted to a Chinese firm but never built. This agreement seems to symbolize that the Philippines is distancing itself from China and strengthening ties with Japan – a trend that is accelerating due to the South China Sea issue.

 

 The yen loan is for the North-South Commuter Rail project, a 38-km railway from Malolos in Bulacan Province, which is north of Metropolitan Manila, to Tutuban in Manila City. The project is scheduled for completion in 2021. A 35-km section of this commuter rail was [originally] contracted to China.

 

 It will be a tied loan, which requires that goods and services be procured from Japanese companies. The project plan, including the removal of posts and other materials left [on the site] by China, will be drafted from scratch.

 

 According to the Philippine media and other sources, the pro-China Arroyo administration, awarded the contract for the original plan to a Chinese company in 2003. In addition to the lack of transparency in the bidding process and the slipshod nature of the plan, cost overruns placed a heavy burden on the Philippine side.

 

 With the addition of the South China Sea issue, President Aquino decided to review the project in 2011.

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