Sumitomo Corporation, Hankyu Corporation, and the Japan International Cooperation Agency (JICA) have reached a collaborative agreement concerning the management and upkeep of Manila's Light Rail Transit System Line 1, a vital passenger railway network in Metro Manila. As part of this accord, Sumitomo Corporation will transfer a portion of its shares, held indirectly through Light Rail Manila Corporation (LRMC), to Hankyu and JICA.
The Philippines stands out as one of the ASEAN countries experiencing rapid economic growth, with a population expected to continue expanding in the coming years. Metro Manila, recognized as one of the most congested cities in the ASEAN region, faces a pressing need for an efficient public transportation system. Consequently, efforts to develop railway infrastructure, including the construction of new lines, are currently underway. The LRT-1, spanning approximately 20 kilometers, holds significant importance in Metro Manila's public transportation network. LRMC is presently extending the LRT-1 southward by approximately seven kilometers, integrating five new stations along its route. Operations along this extended section are slated to commence by the conclusion of 2024.
Sumitomo Corporation invested in LRT-1 in 2020 and has since worked to stabilize the management of LRMC and enhance its value by supporting its spare parts procurement. From now on, the Company will collaborate with Hankyu and JICA, its new partners, to help further increase the value of the business undertaken by LRMC. Hankyu engages in urban transportation and real estate businesses primarily in the Kansai area of Japan. The company has become the first major Japanese private railway company to join the railway operation and maintenance business overseas.
JICA has been a consistent supporter of Metro Manila's railway development through Official Development Assistance (ODA) loans to the Philippine government, coupled with technical cooperation. It has utilized ODA loans to enhance the city's transportation capacity in Phases 1 and 2 of the LRT Line 1 Capacity Expansion Project. Presently, JICA is extending its support by providing ODA loans for the procurement of rolling stock cars and the development of train depots under the Capacity Enhancement of Mass Transit Systems in Metro Manila Project. With a proven track record, JICA has cultivated a positive rapport with the Philippine government and remains committed to facilitating the seamless operation of LRT-1, leveraging these strong partnerships.
In partnership with LRMC and its fellow shareholders, Sumitomo Corporation, Hankyu, and JICA will combine their unique strengths and expertise to enhance the safety and convenience of LRT-1, thus bolstering Metro Manila's transportation network. Additionally, by alleviating traffic congestion, the trio aims to enhance the quality of life and reduce economic burdens for commuters, ultimately fostering the economic advancement of the Philippines.