PROPOSED LRT SEGMENT 1Feastily Study ofthe Proposed Cebu LRT Sytem FINAL REPORT Volume [Main Report Bacar 44 DEMCOR Engineers Ca, and CEDCO Engineors CHAPTER 1 EXECUTIVE SUMMARY EXISTING METRO CEBU TRANSPORT SITUATION 144 Present Road Network Metro Cebu has a total of 1,140.2 kms. of public roads only 14% of which are national roads and 15% city roads, while over 55% are barangay roads. Most major roads (77%) are still 2-lane roads with narrow lane widths and no center medians. No major investment for road development has been made until the Metro Cebu Development Project (MCDP). ‘The road system is deficient in terms of substandard cross-sections and geometric characteristics, a lack of hierarchical system preventing primary and secondary roads from functioning as a system, and the absence of certain links. While the CBD also lacks facilities, there is a need for a high-capacity south-north trunk route. Public Transport System (Over 80% of total trips in Metro Cebu take the public transportation system which is dominated by over 100 jeepney routes in Metro Cebu. Buses, taxis, motorized and pedal-driven tricycles likewise provide public transport services. Traffic Pattems Due to the existing trip pattems, traffic is generally concentrated and directed towards the Central Business District of Cebu City area leading to traffic congestion and a problem of trafic management The main north ~ south arteries are the most congested links. Traffic is heaviest along the Talisay - Cebu City - Mandaue City corridor. Vehicle Registration ‘The historical data on vehicle registration for Metro Cebu manifests rapid motorization, i.e. an average annual growth rate of about 12% from 1990 to 1999. Metro Cebu Transport Problem Over the past decade, the public transport situation and constricted road capacity in Metro Cebu have posed serious impediments to its rational expansion, efficient public services, commerce, and ‘economy. As the Philippines’ second largest urban concentrationFeasibility Study ofthe Proposed Cebw LRT System FINAL REPORT Volume I: Main Report ey December 2000 {and leading political, economic, financial, and commercial nerve center in southern Philippines, Metro Cebu’s public transport system leaves much to be desired. The continued growth of travel demand for metropolitan areas of this size will require more fundamental solutions to improve an already deteriorating situation. ‘The Metro Cebu population is expected to reach 2.4 milion by 2010 land the commuting population will have to increase. If vehicular ‘growth rate trends continue at over ten (10) percent, there will be about 225,000 vehicle registrations by 2010. However, road capacity has not expanded as rapidly a8 population and vehicles. ‘The road network is generally deficient. Even with all the currently ‘committed and proposed road improvements, the situation is not expected to improve considering further the limited geography suitable for road development. ‘As road capacity cannot cope with the increase in travel-making, congestion and overall deterioration of the transport level of service is, and will continue to be, experienced 4.2. FUTURE DEVELOPMENT FRAMEWORK OF METRO CEBU 1.21. Development Catalysts ‘The present development of Metro Cebu is the outcome of the various endeavors being undertaken by the individual local government units. In addition, the kind of development trend has been driven by the following factors: a) new urban concentration occurring at the southern and northem parts of the metropolitan area; b) construction of reclamation projects for industrial, commercial, residential and tourism purposes; and ©) road and port infrastructure development and improvement programs. 1.2.2. Urban Concentration and Settlerent Patterns ‘The economic growth of Metro Cebu shall depend on the expansion of urban centers and establishment of new settlements that will ‘serve as strategic and catchment areas for spillover in commercial, industrial and human activities. Among these new urban centers, which will disperse socio-economic activites from the inner core, are Danao City in the north and the Municipality of Naga in the south ‘These new centers are projected to experience increases in population due to the massive influx of people seeking job ‘opportunites. DENCOR Engineers Co and CEDCO EnginaersFeasibily Study ofthe Proposed Cebw LRT System EINAL REPORT Volume 1! Main Report. December 2000 Cebu City and Mandaue City are the major metropolitan centers that are highly diversified dense areas and predominant recipients of direct investments. The development of the Cebu reclamation areas and the realization of the Mandaue Reclamation will help to fully merge the economies of these two cities. Lapu-lapu City will emerge. a a more active metropolitan center, while the Municipalities of Naga, Talisay, Carcar and Consolacion will be transformed into ities leading to better and more effective delivery of basic urban services. 1.2.3. Urban Structure: Year 2020 The Figure 1.2-1 shows the direction and resulting urban structure for the year 2020 based on an_ integration of the various study conclusions and recommendations as well as local government Plans and programs. 4.3 TRAVEL DEMAND FORECASTS 1.3.1. “With” and “Without” Cases ‘The origin-destination trip matrices for different vehicle types were assigned through the road network in the ‘without’ case, and through the same network plus the LRT line in the “with” case. ‘The split between busijeepney and LRT modes were applied manually based on the survey results. During the assignment, the ‘model algorithm reduced the diversion to LRT effectively to only about 20%. Only the public transport trips were split. 1.3.2. Passenger Forecasts ‘The model generated assigned flows in ADT as shown in Table 1.34. These average flows were converted into passenger flows through the 20-km LRT line, where an average of 7 kilometers per trip are made by passengers, i.e. passenger turnover every 7 kilometers, DDEMCOR Engineers Co and CEDCO Engineers izFeasbii iby Say ofthe Proposed Cebu LT te in Report er 2000 Development Framework Plan Figure 1.2-4 The Study Area Urban ‘Year 2000 - 2020 DENCOR Engineers Co and CEDCO EngineersFeasiiliy Say ofthe Proposed Cebw LRT Sytem rN Table 1.3-4 Result of Traffic Assignment for Public Transport (Jeepneys, ADT) Road Sections Bate Case Win RT "Tabunok- Pardo PO erent igre ardo-Bulaco0 75,044 952 ‘Bulacao-Cabreros 27,827 21,058 Cabreros-Padila 30818 23,387 PadilaCIT = 34.355 25,997 CIV. Rama 38,172 78,868 C 4263 32,085 27708 z 74,068 24.935 21,658 [Maxiioms. tuna 22.442 18.493 3 Luna-Lugarda 20,198 17 544 Logarda Fortuna 18.178 15.790 | Fontuna-quezon 16.360 14310 ‘Quezon-Suslon 14724 12.790 Sudion Consolation 13.252 44st 14 DESCRIPTION OF THE PROPOSED PROJECT 1.4.1. Justification of Urban Rail Option Raikbased mass transit will not only provide the required long-term Capacity for the travel needs of the growing population of Metro Cebu but will also reduce air pollution and dependence on fossil fuel for moving milions of people each year. ‘The direct impacts of the project will be the introduction of @ large ‘capacity in the public transport system leading to a reduction in road ‘congestion as large volumes of commuters are moved at a time, and away from road traffic. Thus, both the raikbased mass transit system and the existing road-based system will achieve better service levels with higher operating speeds and less overall congestion, Advantages of the rai-based mass transit outweigh those of both the bbus and monorail systems, Finally, the rail system allows for and encourages the expansion and evelopment of Metro Cebu along the advocated “linear dispersed pattern’. Thus, facing development pressures from demographic and urbanizing activities, a properly planned and implemented mass transit system appears as the only feasible solution, not only to alleviate traffic problems, but also to encourage a more rational ‘urban configuration, DDEMCOR Engineers Co. and CEDCO Engines ae eafit Feasibility Saudy ofthe Proposed Cebu LRT System IL REPORT Volume - Main Report December 2000, 1.42 Alignment ‘The First Priority Line (Line 1) of the proposed Cebu Mass Rail Transit (MRT) System has been determined to be along the Cebu North Road and the Cebu South Road corridor from Danao City in the north to the town of Carcar in the south, a length of approximately 70 kilometers, ‘The priority segment of Line 1 under consideration or Phase 1, starts at Tabunok (Talisay City ) in the south, proceeds along N. Bacalso Avenue, connects to M. C. Briones St. then Del Rosario St, proceeds along M. J. Cuenco before finally connecting to the Cebu North Road up to the town of Consolacion, a corridor of 20.4 kilometers, Phase Il will consist of the southem segment of the 70-km priority line, the Carcar-Talisay segment (30.33 kms.) while Phase Il will be the northem end, the Consolacion-Danao segment (18.8 kms.) 1.43. Physical Facilities a) ®) DDENCOR Engincers Co, and CEDCO Engineers Structures The project involves the construction of a viaduct 20.4 kilometers long along the center of the roads described above, The underside of the viaduct will have a clear height ‘of between Sm and 14m (at certain short sections). These structures will be confined to the side of the existing flyovers while avoiding the pedestrian overpasses. (They will be made part of station structures when necessary.) The number of structures to be erected include 2,200 AASHTO girders and 579 piers, 95% of which shall be on bored piles. Rolling Stock and Other Railway Faciities ‘These components of the project perform the actual carriage of passengers, consisting of the electric-powered roling stock running over double steel tracks laid along the viaduct, the power sub-stations (located at some passenger stations) that supply power to the trains through the overhead catenary (wires) and picked up by pantographs on top of the railcars, (One hundred twenty (120) air-conditioned Light Rail Vehicles. shall be procured. They shall be 2.5m wide by 15m long with a floor height of 115m and capacity of 150 passengers each,Feasibility Study ofthe Proposed Cebu LRT System FINAL REPORT Volume : Main Report December 2000 ° a) e) DEMCOR Engineers Co and They shall be capable of operating at 80 kph maximum speed and weigh between 25,000 to 30,000 kgs. The system shall utlize 1.435m gauge, direct fixation, ballastless, steel tracks that will be continuously welded Power supply, as rectified from seven (7) power sub-stations, shall be 1500 vDC to propel the AC motors of the vehicles. Other components include the stored-value, magnetic card fare system, and a fiber optic telecommunications system. Project activities shall include the manufacture, delivery, installation, testing and commissioning of these components. Stations Elevated station structures will be constructed at 16 locations where passengers board and alight from the trains. The stations provide the interface between trains and passengers through 130-m platforms, allowing for the effective exchange ‘of embarking and disembarking passengers, sale and collection of fares, limited commercial activities, and the availment by passengers of certain amenities. The stations shall also be designed to effectively interface with the road- based transportation system. Elevators shall be provided in accordance with law. Depot A depot shall likewise be constructed near one end of the line ‘0 provide facilities for parking and stabling railcars, and for a workshop where the rail vehicles shall be cleaned, inspected, maintained, serviced, repaired or overhauled. Depot area shall be between 11 to 15 has. And the proposed site is at the Talisay area for the Phase 1 requirements, Priority Line 1, Phases I & I The Phases Il and Ill segments are proposed to be constructed at grade, on low embankments. A different fleet of commuter-type trains are envisioned to serve a lighter demand profile. They should be of the same dimensions but with diesel-electric motors. ‘The stations shall be at-grade structures, four (4) and five (6) stations, respectively.Feasibility Study ofthe Proposed Cebu LRT Sytem INAL REPORT Volume I’ Main Report 15 December 2000 PROJECT IMPLEMENTATION 1.5.1. Implementing Agency (Proponent) The Department of Transportation and Communications (DOTC) is the Executing Agency during the detailed design, construction, operation and management of the Cebu Light Rail Transit (the ProjecCLRT). The Office of the DOTC Secretary will directly supervise the Project and will establish a full ime Cebu-based Project Management Office (PMO) during implementation. An intr- agency Advisory Committee will provide policy guidance and coordination with the local government units for the smooth implementation of the Project 1.5.2. Implementation Schedule The project shall be implemented as a ODA-financed project, ie. via Intemational Competitive Bidding (ICB) as provided for under the ODA source rules. The ODA source being sought is the Japan Bank for International Cooperation or JBIC. The proposed implementation ‘schedule has the following milestones: ACTIVITIES SCHEDULE Right-otWay Acquistion (ROWA) August 2000 - August 2001 starting with parcellary survey ICC Approval, Project Appraisal, ‘September 2000 - July 2001 Pledging, Loan Signing, (Budget) Appropriations Cover for 2002 Issuance of Environmental Compliance Certificate (ECC) Start of Consulting Services (Preparation of Designs, Tender Documents, including Studies on Financial Management And Operations and Maintenance Plan Preconstruction (including Prequalification), Tendering And Procurement for Civil Works And LRT Electro- Mechanical Systems Construction and Performance November ~ December 2000 July 2004 - July 2003, April to December 2003, January 2004 ~ Dec, 2007 Testing Setting up of Operations and January 2005 Management of Cebu LRT. Defects Liability Support) January 2008, DDEWCOR Engincrs Ca and CEDCO ErgneersFeasibility Study ofthe Proposed Cebu LRT System FINAL REPORT Volume I: Main Report _December 2000 1.6 OPERATION AND MAINTENANCE No definite operation and maintenance arrangement has been set but the ‘existing arrangements for the Metro Manila rail systems have been considered and assumed in evaluating project viability. Initially, DOTC shall be the operator ofthe system, However, a bill is scheduled to be filed in Congress for the creation of a Cebu Light Rail Transit Authority similar to the Light Ral Transit Authority or LRTA. 1.7 PROPOSED FINANCING SCHEME The table below summarizes how the project is to be financed, indicating that 85% of the project cost would be funded from ODA loans. The identified source of ODA financing is JBIC through a special window. Project Financing Terms. ‘SOURCE FINANCING TERMS OF PORTION FINANCE JBIC, Japan ¥ 72,776.64 milion Interest Rate: 1.0% p.a., (Foreign currency portion | except for engineering and a part of the local | services with 0.75% p. a currency portion of the total project cost) Repayment Period: 40 years including 10 years grace period Government of the | PhP 6,379.53 milion Philippines (remaining local currency portion of the total project costs) Budgetary expenditure 4.8 COSTESTIMATES ‘The total estimated project cost is the sum ofthe following components: 1) Civilworks 2) Electro-mechanical works 3) Engineering Services 4) ROW cost, based on land acquisition cost 5) Administration cost 6) Physical contingency The estimated total project cost is shown in the following table. DECOR Enginzrs Ca and CEDCO Engineers -Feasibility Study ofthe Proposed Cebu LRT System NAL REPORT Volume I Main Report December 2 Estimated Total Project Cost {Unit ition Peso) | eareoone rorson | toca, | tora | currency | currency | AMOUNT [can sere | amar | eames | 1,065.89 > | nt edna Vs rae | smn [ans 3.008 57> | Pree Eseaation Te2 2457 118883 19426 coningeney 190262 00 55 3070.10 495.93 Engineering Services 85.10 18683 soar 14255 b. Row Aequsitons oo «047 «1917 <00m ‘Administaton Cost oo aster 38487 20> TorAL ‘lon PrP 7545.88 wans9 4906.18 tin USS 461.15 291.8 7282 Maton Yen 552251 aeir77 e030 8 Nats: 4. Exchange Rate : USS = P43 ;P1= 28 2 Base Year: July 2000 3. Price Escalation: 1.2% pa. for Foregn and Local Currency. ‘4. Prysieal Contingency : 10% for Feceign and Local Currency. 5 Aaministaion Cost: 3.5% of Ci Werks. 6. Te amount of isa separate tem of Local Currency DECOR Exgncers Co and CEDCO BgFeast Sud ofthe Pops Cebu LRP Sten FINAL AEPOR le an eer 1.9 PROJECT EVALUATION 1.9.1 Economic Benefits The benefits accruing to the project were generally organized into categories as they accrue to various classes of beneficiaries - diverted trafic, normal road trafic and generated traffic. The general nature of the quantified benefits include time cost savings. vehicle operating cost savings, and benefits from induced traffic (generated traffic). 1.9.2 Economic Evaluation Results ‘The following table provides the summary of the results of the ‘economic evaluation of the project. Case Net Present Value | Economic Intern | {NPV In Milion Pesos) | Rate of Return (EIRR %) Base Case 5471.26 18.92 | Cost: 7 Benefit: -20% 2,240.40 1672 | Cost: +20% faa Benefit: = ce Cost: +20% = Eee 103.72 180 4.9.3. Other Social Development Impacts a) Settlements ‘The project will provide direction towards the desired linear development framework for Metro Cebu which involve the ‘establishment of a high-capacity trunk route. b) Human Development ‘The project will promote the general upliftment of the quality of lif in Metro Cebu with improvement in settlement pattems, ‘a more efficient transportation service, the overall reduction in air pollution, and the opportunities for higher productivity ©) Environment ‘The project will greatly reduce air pollution, as well as contribute generally to the reduction of the country’s dependence on imported fuel DEMCOR Engineers Ca, and CEDCO Prgincers if 7Feasibility Say oft roped Cebu LA St INALREPORY Tole tn fpr ) Urban Services December 2000 With the densification at appropriate areas and the better ordered land use allocation, more efficient provision of urban services, Relief in traffic problems would allow the Metro Cebu LGUs to concentrate their efforts on other urban services 1.9.4 Financial Evaluation ‘Assuming the following for the base case 2) partial operations start by 2005; b) the fare level is pegged at P15.00; and ‘other revenues total 5% of the farebox revenue usual financial indicators the weighted average resulting FIRRs are com were determined, ie., FIRR. The NPV at ost of capital was also determined. The pared to the Weighted Average Cost of Capital (WACC) based on JBIC Special Loan terms and an interest rate of 15% for local costs. WACC is computed at 3.8%. ‘The results of the financial evaluation, including those two cases with varied fare levels, are shown below. cE FARR) —Wv(@sa%ingy SC {(n Million Pesos) Base Case 35 aes Case: P TT average tere 430 af instead of 15. aie Cased: Staggered fare 474 ae 4.9.5 Cash Flow Analysis, ae increase (P18 by 2017) “The project is expected to incur substantial losses in the first 20 years of operations as depreciation and. interest most of the funds find their way to t expenses. However, the contribution ‘margins from the operations will hit positive levels much sooner — that is, two years after the ‘Much of the deficit in the start of the operations. cash levels will be primarily attributed to debt servicing. Gross profit margins will be positive mostly throughout the projections, but the provisions for depreciation and the interest expenses will pull down to negative levels these margins. In spite of the negative cash position of the project, the strongly DEMCOR Engineers Co and CEDCO Engineers rRFeasibility Study ofthe Proposed Cebu LRT Sytem EINAL REPORT Volume I Main Report Bese 2002 196 Positive net present value and the 20% internal rate of return (which is far above the 4% WACC set and estimated eartier) indicate that the project is viable Joint Development Mechanisms Granting that most LRT/MRT systems around the world require subsidies to maintain operations, other sources of income must be ‘exploited by the LRT operator. in conjunction with the government andlor another private enterprise, various schemes may be utilized by the Cebu LRT operator to augment its income to recover part of its deficits which would be incurred in its operations. These may include fee-based strategies, special district assessments, developer fees, linkage fees and exactions, equity investment strategies, monetary investments, and transfer of property or development rights. 4.10 NEXT STEPS ‘The study recommends the following: 1 DEMCOR Engincers Co and CEDCO Enginaors ‘That immediate action be taken by DOTC and Central Visayas ‘Transport Projects Development Committee (CVTPDC) to engage the cooperation of the LGUs to acquire the required rights-of-way, however, limited, for the stations and the depot; ‘That detailed engineering consultants be immediately engaged to ‘advance the project towards implementation; ‘That DOTC take immediate action to study the commercial or joint development opportunities to enhance the financial viability of the project; and ‘That DOTC and CVTPDC advocate and shepherd through Congress the immediate enactment of: a. a law creating the Cebu Light Rail Transit Authority to be attached to the DOTC, and b. a law creating a fund to provide initial operating subsidy for economically viable urban rail projects throughout the country