After 3 years of no progress, World Bank cancels loans for Metro Manila BRT project

Zero disbursements have been made so far. The Loans Agreement closes in November
by Leandre Grecia | Jul 1, 2022
photo of BRT in Rio de Janeiro Brazil
PHOTO: Shutterstock

The mass transport system in Metro Manila is still a mess, and we’re in dire need of solutions. But it appears that there’s another setback as the World Bank has just canceled the loans for the Metro Manila BRT Line 1 project.

The World Bank has reached an agreement with the Philippine government to cancel the full $64 million (P3.5 billion) loan approved by the former on March 16, 2017. Due to several delays, the government was only able to sign on the loans on February 14, 2019, before they were declared effective on March 15, 2019. The closing date of the Loans Agreements is on November 30, 2022.

To date, 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, and only about $100,000 were paid out of the IBRD loan for front-end fees.

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In its report, the World Bank stated said that with less than six months left before the project’s closing date and with lack of any implementation progress made, “an extension cannot be justified.” The Department of Finance sent a formal cancellation request for the loan on June 21, 2022.

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The World Bank also mentioned in its report that the project implementation “remained slow during the last three years” despite “renewed commitment from government counterparts.” The organization cites several reasons for this poor performance, one of which is the “weak capacity of the implementing agency.”

photo of what the Metro Manila BRT Line 1 project could look like when complete

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The National BRT Program Management Office (NPMO) that was assigned to implement the BRT projects reportedly had “very limited experience with BRT projects.”

The NPMO was also understaffed with a high staff turnover rate throughout project implementation, and the Department of Transportation (DOTr) appointed five NPMO managers and three undersecretaries in charge of the BRT portfolio within the last three years. 

Other reasons for the project’s failure were the inefficiency of procurement management, the lack of general government budget allocation, and unsurprisingly, the COVID-19 pandemic.

“To date, the cumulative disbursement remains zero for both IBRD and CTF loans, with only about US$0.10 million paid out of the IBRD loan for front-end fee.”

If you want to see the full report for yourself, you can refer to this link. You can find the excerpts we used in our article in Sections I and II of the document. Thought on this, readers?

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Main image: Bus rapid transit in Brazil

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