IFC cancels 70 million dollar loan for Philippines toll road

IFC cancels 70 million dollar loan for Philippines toll road project

Agence France-Presse Manila

The World Bank's private sector arm, the International Finance Corp. (IFC) revealed on Thursday it has canceled a US$70 million syndicated loan for a vital toll road project in the Philippines after the local builder failed to get a strategic foreign partner.

The loan to have helped finance a project to rehabilitate and extend the toll road was approved in October 2003 but IFC country manager Vipul Bhagat said it had been canceled nearly five months ago.

Coastal Road Corp. was building an 11.24-kilometer (6.96-mile) extension of a major toll highway leading south of Manila, a project launched with much fanfare by Philippine President Gloria Arroyo last year.

Construction work has since stalled.

Bhagat said there was "supposed to be a strategic partner who would come into the project with a significant stake but that did not happen," leading IFC to cancel the loan.

Malaysian tollway operator MTD Capital was one of the original proposed strategic partners but that company did not sign on as expected.

The total cost of the project was estimated at $117 million, Bhagat said, adding: "We would have been the primary lender to the coastal road."

Bhagat said the IFC was willing to consider financing the project anew, remarking that "they could revive the loan but we would have to treat it as a new investment proposition.

"We would have to reappraise and do due diligence as though it were a new project. It will start from the beginning."

The project is part of an effort to improve Manila's notoriously poor transport system and help develop provinces to the south which have been showing sharp economic growth in recent years.