ECONOMY-TRANSPORT: MANILA- World Bank cancels loans for Metro Manila BRT project

Three years after agreeing to disburse the monies, the World Bank has cancelled a $64 million (P3.5 billion) loan for the Metro Manila Bus Rapid Transit (BRT) Line 1 project.

According to local media reports, the World Bank noted that with less than six months left before the project’s closing date and given the lack of implementation progress, “an extension cannot be justified.”

The closing date of the Loans Agreements is November 30, 2022. The Department of Finance sent a formal cancellation request for the loan last Tuesday.

Loan granted in 2019

The loan was first approved on March 16, 2017, but the Philippines government was only able to sign off on the loans on February 14, 2019, before they were declared effective on March 15.

However, cumulative disbursement remains zero for both the $40.7 million International Bank for Reconstruction and Development (IBRD) and $23.9 million Clean Technology Fund (CTF) loans.

Only about $100,000 has been paid out of the IBRD loan for front-end fees.

While noting “renewed commitment from government counterparts”, the World Bank pointed to, among others, the “weak capacity of the implementing agency”. It noted that the National BRT Program Management Office (NPMO) reportedly had “very limited experience with BRT projects.”

The NPMO was also understaffed with a high staff turnover rate. For example, the Department of Transportation (DOT) appointed five NPMO managers and three undersecretaries to take charge of the BRT portfolio within the last three years.

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Other factors included the inefficiency of procurement management, the lack of general government budget allocation and the pandemic.