FBDC eyes equity in North Rail project

The plan for the North Rail project has to be overhauled, but the Fort Bonifacio Development Corp. (FBDC) expressed interest in becoming an equity partner as long as the plan includes major terminals in Fort Bonifacio.

FBDC president Ricardo Pascua told reporters that the plan to put North Rail for funding under Japan's Special Yen Loan Package would make the project very feasible but it might have to be repackaged from "ground zero level", especially in terms of equity sharing.

Because the funding from the yen loan package is a government-to-government transaction, Pascua explained that the fund would change the structure of the project proponent since the corporate vehicle would necessarily include government equity.

At present, the consortium has DM Consunji, Bases Conversion and Development Authority and the Philippine National Railways along with FBDC. Fil-Estate was being consulted in the development planning because of its experience with the Light Railway III project.

"Fil Estate has not become an equity holder yet as far as I know," Pascua said. "If the yen loan financing happens, it will improve the feasibility of the project because this funding facility has very attractive terms."

The yen loan package, known as the Obuchi Fund, has the most concessionary terms of all Japanese funding facilities, offering loans that carry a one percent interest, with 30 years repayment period and 10 years grace period.

However, loan processing has always been uncertain, averaging at 36 months, against commercial loans which average only seven months to get approval. According to Pascua, however, the change in funding mechanisms would not affect FBDC's interest in the project, saying that the company's main concern was to keep Fort Bonifacio in the path of the North Rail.

"As long as Fort Bonifacio would become one of the major terminals, we would continue to be interested as an equity partner in this project," he said.

The North Rail cannot be connected to the Metro Rail Transit now under construction along EDSA because the rails use different gauges, but Pascua said planning the route of the North Rail would have to consider the existing railway system.