MANILA, Philippines — The government has picked the hybrid option to finance the rehabilitation of Kennon Road to cover the more than P2 billion increase in the cost of civil works and right of way (ROW).
The Department of Public Works and Highways (DPWH) said the cost of the project has increased by 20.2 percent to P13.89 billion from P11.55 billion earlier.
The cost now consists of P13.24 billion for civil works and P650 million for right-of-way (ROW) acquisition, higher than the previous program of P11 billion for construction and P550 million for the ROW.
The department has amended the feasibility study to adjust the project cost due to the increase in prices of goods and revisions in the structure of the road.
To finance the upgrade, operation and maintenance of Kennon Road, the DPWH is looking at a mixed form of capitalization.
Under this, the DPWH would obtain official development assistance to fund the reconstruction of the major gateway to Baguio City.
The government also aims to bid out a public-private partnership (PPP) contract for the right to operate and maintain the road.
Prior to this, the DPWH had waited for a private firm to submit a proposal to carry out the expansion and rehabilitation.
The DPWH is preparing to submit the details of the financing plan to the National Economic and Development Authority – Investment Coordination Committee (NEDA-ICC) for review and approval.
Based on the timeline posted on its website, the agency expects to get the approval for the proposed financing either by June or July.
It is currently drafting the supplemental terms of reference for the project.
The DPWH would then go through the usual process of securing an environmental compliance certificate from the Environmental Management Bureau and a certification precondition from the National Commission on Indigenous Peoples.
Kennon Road serves as one of the access roads leading to Benguet, providing the shortest route from Rosario, La Union to Baguio City. Given the mountainous terrain surrounding it, the road is damaged every year by rock fall and soil collapse, especially when the weather is bad.
The DPWH hopes to rehabilitate the road to appropriate it with the newest engineering measures and equip it with slope protection structures for the safety of motorists.
The project also seeks to cut travel time from Manila to Baguio City to just 3.5 hours from four hours through the network of expressways leading to the north of Luzon.
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The article was originally published in PhilStar Global and written by Elijah Felice Rosales
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