Meager financing, alterations imperil subway viability

Meager foreign financing is threatening to turn the Metro Manila subway into a white elephant. The balance is so huge the government will be unable to complete it. Sudden changes in alignments and plans have bloated the cost, and are delaying the project. In the end Filipinos will be saddled with an unviable underground railway.

Japan is lending only P52 billion over seven years. But total construction cost is P357 billion, and rising. Government will be hard-put to fund the P305-billion balance. Its annual budget for all transport infra-works – land, sea, air, and rail – averaged only P60 billion in 2015-2017, although it rose to P90 billion this year. Devoting scant pesos to a subway in the capital will deprive it and other regions of equally important construction of air and seaports, land terminals, and commuter-cargo rails.

Rerouted to Katipunan, Quezon City, onto Food Terminal Inc., Taguig, the subway will traverse a major earthquake fault and several flood zones. It will plow through thousands of private houses and businesses. Engineering solutions and expropriations continue to drive up the cost from the P214 billion indicated by the National Economic and Development Authority in Mar. 2017.

The Japan International Cooperation Agency had proposed the subway since the 1980s. In 2013-2015 billions of pesos was spent on a Transportation Development Plan for Mega Manila that included the north-south subway. More than 25 kilometers long, it will have 15 stations from Quirino Highway-Mindanao Avenue to FTI, passing through Pasig, Makati, and Pasay Cities. The Dept. of Transport aims to finish the works by 2025. The first three stations, in Mindanao, Tandang Sora, and North Avenues in Quezon City, partially will be operated upon completion in May 2022, a month before President Rody Duterte’s term ends.

The JICA loan is for 104.53 billion Yen, or P52.25 billion, effective Mar. 2018 to Mar. 2025. It shall be for “the purchase of eligible goods and services necessary for the implementation of the Project from suppliers, contractors or consultants.”

The loan amount is finite: “When the cumulative total of disbursements reaches the above-mentioned maximum amount of the loan, JICA shall make no further disbursement.” Proceeds strictly shall be for civil works, payable at 0.1 percent interest; and consultancies, 0.01 percent. Specifically not covered are right-of-way acquisitions, resettlements and compensation of persons to be evicted. Repayment is for 40 years with 12 years grace period.

Originally the subway was to pass underneath EDSA, sharing six stations with and augmenting surface-level MRT-3. JICA studies showed this would have higher ridership, dislocate less persons and structures, and cost only P208 billion. Feasibility studies, finished in 2015, were to be transformed into engineering designs. But in Dec. 2016 DOTr suddenly told JICA of the realignment to Katipunan-QC.

Traversing the West Valley Fault Line and flood zones will entail expensive engineering solutions. Urban planner Arch. Felino Palafox Jr. says special foundations can be installed, like in the earthquake-proof Istanbul airport.

Partially running the first three stations is infeasible, says civil engineer Rene Santiago, past president of the Transport Science Society of the Philippines. House-size tunnel borers will have no space to pile up the dug-up earth and factory for prefab concrete tunnel walls. The rush to operate three stations for show will delay construction of the 12 others, adds former public works undersecretary Primitivo Cal, who holds an engineering doctorate.

Homeowners and businessmen in Valenzuela City are opposing eviction from 32 hectares with prime highway frontage for an oversized depot. So are those in Parañaque who are being expropriated for a previously unannounced “Bicutan station” only a kilometer from the FTI-Taguig end-station. They separately reported to Malacañang that “oligarchic interests” are using government’s power of eminent domain to take over their property for commercial use. Less prominent private and government lots around the two sites can serve as alternatives.

Senate President Pro Tempore Ralph Recto has warned that poor planning can make the subway a white elephant. A former NEDA chief, he said costs rise due to revisions and during actual construction. Councilors in QC worry that lawsuits against the expropriations could drag and prevent succeeding administrations from continuing the costly subway. That would dash the country’s decades-long dream of having such a modern railway.

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This would be an open-and-shut case for the Presidential Anti-Corruption Commission. A presidential adviser with Cabinet rank reportedly is arm-twisting the Philippine Amusement and Gaming Corp. for special privileges. He happens to own and operate casino arcades in Central Visayas and Southern Tagalog whose permits Pagcor had renewed in 2017. The renewals came under new rules, however, for all such arcades to pay Pagcor minimum guarantee fees, as government share from their incomes. The Palace bigwig supposedly wants exception from the MGF.

If he persists, he would get Pagcor and himself into trouble. The Anti-Graft and Corrupt Practices Act forbids government officials from granting undue advantage to anyone. It also bars them from inducing others into sleaze.

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