The Philippines and South Korea have signed a US$172.64-million loan agreement for the construction of a new international container port in Cebu that will free up the existing seaport in the province and provide a more efficient and reliable transport infrastructure for the unimpeded flow of goods and services in the Visayas.
The agreement was signed on June 4 by Philippine Finance Secretary Carlos Dominguez III and Sung-Soo Eun, chairman and president of the Export Import Bank of Korea (KEXIM), the official export credit agency of South Korea.
Philippine President Rodrigo Duterte and South Korean President Moon Jae-in witnessed the signing of the loan accord, which was among the five agreements forged during the Filipino leader’s official visit to South Korea.
The new Cebu International Container Port, with a total estimated project cost of P10.1 billion (about $199.25 million), will be built on a 25-hectare reclaimed land in the town of Consolacion in Cebu.
It will include a berthing facility with a 500-meter quay wall length that can simultaneously accommodate two 2,000 twenty-foot equivalent unit (TEU) vessels; operating facilities and structures for containers such as a freight station and an inspection shed; access road and bridge; and dredged waterway and turning basin.
Aside from the construction of physical structures, the loan also covers the procurement of cargo-handling equipment and consulting services.
KEXIM’s Economic Development Cooperation Fund (EDCF), which evaluates and implements aid projects in developing countries, will extend $172.641 million (P8.8 billion or KRW186.97 billion) for the port project with a preferential interest rate of 0.15% per annum for non-consulting services and 0% interest for consulting services.
The loan has a maturity period of 40 years inclusive of a 10-year grace period.
The Philippines will provide a counterpart fund of $26.09 million (about P1.4 billion or KRW28.9 billion) for the project.
A new international terminal is seen as the long-term solution to the growing volumes handled at Cebu International Port, which is currently the base port. Several feasibility studies, the most recent one by KEXIM, suggest locating the new sea hub in Tayud, Consolacion, some 8 kilometers from the Cebu base port.
