DBM OKs funding for Cebu bus transit

Posted at 08/27/14 3:59 PM

MANILA, Philippines – The Department of Budget and Management (DBM) has approved the funding strategy for the Cebu Bus Rapid Transit project.

DBM issued a Forward Obligational Authority (FOA) to the Department of Transportation and Communications (DOTC), which covers P9.48 billion of the total project cost of P10.62 billion.

The FOA is a combination of national government contribution and loans from Agence Francaise de Development (AFD), the International Bank for Reconstruction and Development (IBRD), and the Clean Technology Fund.

The remaining P1.14 billion will be shouldered by the private sector and will be mainly utilized for the purchase of necessary motor vehicles.

“We want to enhance urban mobility in Cebu by establishing a high-quality, viable and sustainable bus rapid transit system. Once completed, the project will give Cebu's commuters a fast, comfortable and cost-effective mode of transportation. The main idea here really is to emulate a modern rail-based transit system at a much lower cost,” Budget Secretary Butch Abad said.

“This Forward Obligational Authority will allow the government to process the loans for the project. The FOA will also help us in avoiding unnecessary commitment fees along the way,” he added.

Abad also said that aside from improving public access to transportation, the new bus transit also aims to further stimulate the economic activity in Cebu.

“The implementation of the project alone will open various employment opportunities for the construction and manufacturing sectors. The Cebu Bus Rapid Transit—among the provision of other economic services nationwide—represents the Aquino administration's efforts to cultivate a more vibrant economic environment for cities outside Metro Manila,” he said.