THE Bangko Sentral’s policy-setting Monetary Board approved a $116.6-million loan from China to finance the construction and rehabilitation of aqueducts that bring water from Angat Dam in Bulacan to Metro Manila.

The project is vital to tackling the looming water shortage in Metro Manila, as the repairs plug the leaky aqueducts from which millions of liters of water go to waste each day.

Bangko Sentral Deputy Governor and officer-in-charge Armando Suratos said Friday the loan from the Export-Import Bank of China would cover Phase 2 of the Angat Water Utilization and Aqueduct Improvement Project.

Signed on Jan. 7, “the loan has a 20-year maturity, with a five-year grace period.”

The agreement provides for an annual interest rate of 3 percent and a commitment fee of 0.4 percent a year on the unspent balance of the loan amount, according to Suratos.

The project involves the construction of a new 9.9-kilometer portion and the rehabilitation of an existing 5.5-kilometer aqueduct.

Part of the loan money will pay for the interconnection works of six aqueducts and clearing of the right of way, which involves paying an estimated 265 families who live in the areas where the water structures pass.

The first phase of the project, completed in January 2006, is now being used as bypass structure in lieu of damaged aqueducts.

A January 2002 inspection by the Metropolitan Waterworks and Sewerage System recorded 13 leaks in some parts of the Bicti-Novaliches Aqueduct, three of which were considered major leaks that accounted for losses of about 150 million liters per day.

After the major leaks were repaired, water continued to seep through the weak spots of the existing structure.

The MWSS decided to construct a new aqueduct bypass that would be used during rehabilitation phase of the project.

Meanwhile, Suratos said that the monetary board also approved the government’s 100-billion-yen Samurai bond issue maturing in 2020.

The float, which carries a coupon rate of 2.32 percent, would be settled by March 2.

Guaranteed by the JBIC, the Samurai bonds include a spread of 85 basis points over the Yen Swap Offer Rate of 1.47 percent.

The guarantee fee is 75 basis points of the principal amount covered by the JBIC guarantee.

Source: Manila Standard Today