Manila: Japan will take over a failed Central Luzon-Metro Manila rail project, a Chinese state firm endeavour that was shelved several years ago due to cost overruns and other concerns.

According to President Benigno Aquino III, the Philippines and Japan have reached an agreement on the provision of a P241.9 billion (Dh18 billion) loan for the conduct of studies and civil works for the Malolos (Bulacan) to Tutuban (downtown Manila), North-South Commuter Railway Project.

“This project will certainly improve the land transportation capacity of the greater Metro Manila area and provide a more environmentally sustainable mode of transport,” Aquino said in Manila during the joint press briefing with Japan’s Prime Minister Shinzo Abe.

The train project will link the central-west portion of Metro Manila with northern Luzon and will benefit millions of commuters who had to bear with the daily travel through the metropolis’ congested thoroughfares.

The railway project will cut travel time by several hours and is expected to further boost economic growth and spread this further to the northern area of the national capital to Bulacan and Pampanga.

Once commuters have access to faster and comfortable travel, it is expected that more of them will choose to live in areas outside of Metro Manila where cost of living is cheaper and population is less dense.

Earlier, Department of Foreign Affairs Secretary Albert del Rosario said the project, which is expected to be finished by 2020, will be funded by Official Development Assistance loans from Japan.

“The North-South Commuter Railway (NSCR) project, phase 1 is poised to be the single-biggest ODA yen loan package to date that Japan has given any development partner,” he said.

NSCR project involves the construction of a 36.7-km narrow-gauge elevated commuter railway from Malolos to Tutuban.

Earlier in 2005, the government of then President Gloria Macapagal-Arroyo entered into a contract with China National Machinery and Equipment Corp (CNMEC) for the establishment of the Tutuban-Malolos, railway. However, the project was shelved several years into the construction after it was found out that the government had entered into an illegal contract.

The agreement with CNMEC was entered into without undergoing bidding process required for big ticket government projects, among other violations.

Aside from the train project, Aquino and Abe witnessed the signing of agreements on the transfer of defence equipment and shared security.