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12.9-M-euro loan snagged for light rail rehabilitation
Karen L. Lema, BusinessWorld (5 Aug 2004)

MANILA, PHILIPPINES: The Light Rail Transit Authority (LRTA) could finally undertake the second phase of the Light Railway Transit (LRT)-1 rehabilitation and modernization project with the signing of a 12.9-million-euro credit and loan deal to finance the project.

The second phase of the rehabilitation will cover 31 of 63 LRT coaches that were not covered by the initial phase of the modernization project. The mixed loans would be used to procure spare parts to replace old ones and the acquisition of additional parts.

LRTA planning manager Evangeline Razon said rehabilitation of the existing LRT Line 1 started in 1997, but LRTA had to split the project into two phases to ensure the availability of counterpart funding.

The LRT-1 runs between Monumento and Baclaran, or a distance of 15 kilometers, in 30 minutes. Its 63 coaches have been running for 20 years now. Originally there were 64, but one of the coaches was destroyed because of a bomb attack on Dec. 30, 2000.

Finance Secretary Juanita D. Amatong and LRTA Administrator Pacifico Fajardo signed the loan agreements with Belgian Ambassador Christian Ttanghe and Fortis Bank Representative in Manila Joel Suarez.

The financing scheme involves a 6.29-million-euro state-to-state interest-free loan from the Belgian government payable in 20 years after a 10-year grace period and a 6.62 million buyer's credit facility from Fortis Bank Brussels.

Meanwhile, Mr. Fajardo said he is "confident" that Malacañang would approve LRTA's request to rationalize its fare structure. He said the LRTA needs to raise the rates up to PhP25, in order to help the railway cover its operating costs and debts.

The LRTA hopes to increase its railway revenues by 15-20%, which translates to "hundreds of millions," he said.

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