PROJECT UPDATES

December 15, 2005 – The Northrail-Southrail Linkage Project was formally launched today wit the laying of time capsule by President Gloria Macapagal Arroyo and President Roh Moo-Hyun of the Republic of Korea on the Philippine National Railways (PNR) Tutuban Main Terminal grounds. Assisting the two presidents were First Gentlemen Miguel T. Arroyo and Korean First Lady Kwon Yang Suk.

The ceremony, officiated by PNR General Manager Jose Maria Sarasola II, signaled the start of the rehabilitation and the building of a modern railway system for the southern line of the PNR. In his remarks, Sarasola emphasized, “The special significance of today’s event has not been lost on PNR. This is in fulfillment of President Arroyo’s commitment in her 2001 State of the Nation Address, to breathe renewed life into the South Manila Commuter Line.

A joint undertaking of the governments of the Philippines and Korea, the project’s Phase 1 consists of modernizing 34 km of commuter rail service connecting the north terminal of the Northrail Project in Caloocan to the north end of the Southrail Project in Alabang. Project financing of US$ 50.42 million will be provided by Korea: 70 percent or US$ 35 million from a concessional loan extended by the Economic Development Fund of Korea; the remainder from the Korean Export-Import Bank. The EDP has offered the loan at 2.5 percent interest per annum, payable over 20 years, with an additional 10-year grace period for the principal amount. This, in effect, stretches the payback period to a total of 30 years. The US$ 15.42 million from the Korean Export-Import Bank is in the form of export credit, with the interest rate anchored on the Commercial Interest Reference Rate or CIRR, payable in 10 years.

With a view to fast-tracking economic progress As well as ameliorating urban congestion, Phase 1 features 21 brand-new diesel rail cars plying a 16-station route, servicing 187,000 commuters daily, and taking some 30-35 minutes of travel from end to end.

The visit of the Korean president also heralds the allocation of additional funding of some US$ 70 million for Phase 2 of the project, which will extend the railway system to Calamba, Laguna, and complete the PNR South Line. It forms a crucial component in the transportation development framework of President Arroyo’s 10-Point program.

The project summary, the loan agreement, a map of the alignment, and today’s newspapers were among the documents sealed in the time capsule, a symbol not only of the brighter future for the growth zone of Marilaque (Metro Manila, Rizal, Laguna and Quezon) but also of the timelessness of Philippine-Korean friendships. Coins were thrown in, signifying prosperity and good luck.

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