SMC ready to start MRT-7 construction
MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) is ready to start the construction of the $2.2-billion Metro Rail Transit (MRT)-7 from San Jose del Monte in Bulacan to North Ave. in Quezon City after getting the green light from the government.
SMC president and chief operating officer Ramon S. Ang said in an interview with reporters that the company is finalizing talks with the Department of Finance (DOF) to pursue the ambitious mass transit system.
Ang said the DOF is just finalizing the conditions that would govern the revised contract.
“We are in talks. By now it (talks) should have been completed but I think there are some conditions the DOF wanted to be included in the revise contract,” he said in Filipino.
The SMC chief executive did not elaborate.
Ang said funds for the proposed MRT-7 are ready through the Japan Bank for International Cooperation (JBIC). “The funding is already ready. The JBIC already approved it,” he said.
According to him, the company is hopeful that talks with the finance department would be completed within the year. “We hope so. We will start immediately after the government approves it.
The proposed train project would start at Tala, Caloocan City and pass through Lagro and Fairview, Novaliches, Batasan, Diliman, Philcoa before ending at EDSA corner North Avenue and is expected to serve two million commuters.
The construction of the proposed 22-kilometer train line with 14 train stations from San Jose del Monte in Bulacan to the corner of North Avenue and EDSA in Quezon City has been delayed for almost four years because of the failure of the proponent to secure a performance undertaking from the DOF.
In 2008, the Department of Transportation and Communications (DOTC) signed a contract with Universal LRT Corp. Ltd (ULC BVI) to build the railway system and develop the project’s real estate and commercial component.
The 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 while the remaining $900 million to $1 billion by borrowings.
However, SMC’s wholly-owned subsidiary San Miguel Holdings Corp. (SMHC) executed a share sale and purchase deal in October of 2010 to acquire 51 percent of ULC BVI from the group of Salvador Zamora II that holds the concession for MRT7.
As early as May, DMCI Holdings Inc. informed the Philippine Stock Exchange (PSE) that the joint venture between its construction arm D.M.Consunji Inc. and Marubeni Corp. of Japan recently signed an engineering, procurement, construction contract for the Metro Rail Transit System and Intermodal Transportation Terminal of the MRT-7.