Philippines
Ex-post Monitoring for the ODA Loan ProjectSouth Luzon Expressway Construction ProjectEvaluator: Atsushi Hashimoto (Maenam Advisory)
Field Survey: May 2008
1. Outline of the Project

ManilaThe Philippines

Project SiteCebu

DavaoMalaysia

Location of Project Area:
Manila, the Philippines

South Luzon Expressway,
Maintenance Vehicle

1.1 Objectives
The objective of the this project is to expand the flow of people and goods between Manila
Metropolitan Area and its suburbs by elongate the existing South Luzon Expressway (fromManila Metropolitan Area to Calamba City, 42 km) to Batangas City, thereby contributing to theindustrial development plan centering on the port development in the city.
1.2 Project Summary (Loan contract summary and other data)
Loan Amount / Loan Disbursed 4,238 million yen / 3,669 million yen
AmountExchange of Notes/Loan Agreement

February 1990 / May 2000

Ex-post evaluation

Fiscal 2002

Executing Agency

Department of Public Works and Highways(DPWH)

Main Contract

Philippine

construction

companies(ManifoldConstruction Enterprise Inc. and others)
Consultant Services

DE LEUW CATHER INTERNATIONAL (U.S.)

1.3 Background and Reasons for Conducting Ex-post Monitoring
This project was subjected to a monitoring study because of the following reasons.

1[Effectiveness] The traffic volume expansion due to the project was underachieved compared toits original target (5.2% in 2001, 5.6% in 2002), and the project effect was not shown at theevaluation. Therefore, it was necessary to keep monitoring the situation in later years.1 The
main reason why for the underachievement of traffic volume at the ex-post evaluation was that
construction of the Calamba-Santo Tomas segment and the Lipa-Batangas segment had not been
completed. There were other reasons including the followings: (i) The traffic volume on existing
national roads did not increase as expected, and the expressway could not function sufficiently
as the substitute route during traffic congestion. (ii) The number of companies moving into theindustrial parks in the project area did not increase as expected. (iii) To switch driving fromordinary road to expressway between Santo Tomas-Lipan segment only is not that much beneficial
for users in terms of cost and safety.
[Sustainability] The operation and maintenance of the project is conducted by a privatecompany (STAR IDC), which holds the right of operation after the completion. It should be kept
monitoring the condition of operation and maintenance. It is necessary to check financial data of
the company, which has not yet been obtained and verify the sustainability of this company.
[Follow up of the recommendations] (i) To follow the progress of the work that the Philippine
Government plans to conduct road construction, connecting to the project road, as wellas effects of the project. (ii) The hearing survey of developers and tenant companies pointed out
the followings: a) the need for the installation of street lighting facilities, b) the need for
1

Note by JICA Evaluation Department: The review conducted at the time of monitoring revealed
that the daily average traffic volume reported at the ex-post evaluation was an underestimated due tomisinterpretation of data. Specifically speaking, it is considered very likely that the data used asmonthly averages were actually daily averages; therefore, the reported traffic volume was about 1/30of the actual value. In this report, the figures of traffic volume at the time of ex-post evaluation havebeen corrected as in the following table.
The traffic volume after correction was about 160% of the planned value, therefore, it may beconsidered that the effectiveness of the project was satisfactory at the time of ex-post evaluation.
Before correction(Yen Loan Project Evaluation Report 2003,

After correction

Table 2-1)

Annual traffic volume (vehicles)
Daily

averagetraffic

2001

2002

2001

2002

(for 5 month Aug. –Dec.)(for 10 month Jan. –(for 5 month(for 10 monthOct.)

Aug. – Dec.)

Jan. – Oct.)75,309159,250

75,309159,250

9,406

9,406

9,406

9,406

volume(vehicles/day)a) Planned valueb) Actual value

492

524

15,062

15,925c) Achievement rate

5.2%

5.6%

160%

169%

2

measures to ensure safe driving and crime prevention, c) the inadequate maintenance of paving
and road shoulders, and d) the high price of road tolls.
2. Monitoring Results
2.1 Effectiveness (Effects)
The traffic volume has increased to 18,000 vehicles in daily average. This represents a 190%
achievement rate relative to the planned value in 2002. This can mean that the project isvaluable. The project effects related to the opening of Batangas Port have not yet to be shown.
(1) Traffic Volume
South Luzon Expressway is a road heading to south from Manila Metropolitan Area. Thesegment between Santo Tomas and Lipa was constructed in this yen loan project. The segment
between Lipa and Batangas, which had not been completed at the ex-post evaluation conducted,
was constructed using the BOT scheme and opened in April 2008. Major part of expressway
between Metro Manila and Batangas route, which is linking from Metro Manila via Alabang toCalamba, is already connected, and the only segment between Calamba and Santo Tomasremains unfinished (Fig. 1).
There are industrial parks (LISP:Light Industry Science Park, FPIP:
Rizal ProvinceFirst Philippine Industrial Park) in
Makati
Metro Manila
the area from Metro Manila to Santo
Tomas, and an industrial park (LimaTechnology Center) has been
Alabangdeveloped between Santo Tomasand Lipa.
The daily average traffic volume
Cavite Province
LagunaCalamba
between Santo Tomas and Lipa in
Province
this project was 17,272 vehicles in
Santo Tomas
2003 and 17,967 vehicles in 2007.
As compared with 2003, the traffic
volume in 2007 shows a slightincrease (a 4% increase). WhileLipaQuezon
traffic of passenger cars shows aProvince
decreasingtendency,
two-axle
six-wheel vehicles and vehicles withBatangas
three or more axles are on anBatangas Province
increase. The project operator
considers that users are shiftingfrom passenger cars to buses,
Existing South Luzon Expressway (Manila-Calamba)
Segment in This Project (Santo Tomas-Lipa)
reflecting the recent rise in the pricePlanned Segments (Calamba-Santo Tomas, Lipa-Batangas)
of automobile fuels.
South Luzon Expressway3

The traffic volume shows a tendency to increase in large commercial vehicle relative topassenger cars. According to the operator of South Luzon Expressway (STAR IDC; hereinafterreferred to as SIDC), an increase is seen in the number of long-distance buses connecting
Manila and the islands to the south of Luzon using the ferry terminal in Batangas Port.
The traffic volume on the ordinary roads between Santo Tomas and Lipa was 18,310
vehicles/day in 2005 and 17,618 in 2007. There have been little changes in the traffic volume,and it cannot derive any conclusion regarding the correlation to this project. Similarly, the data
for the traffic volume on the ordinary roads between Manila and Batangas have been showing
little changes (somewhat less than 18,000 vehicles/day).
While the expressway between Lipa and Batangas (to be connected to the Santo Tomas-Lipa
segment and elongated to Batangas) which had not been completed at the time of ex-post
evaluation, the South Route (the two lanes on the right side Lipa towards Batangas) was opened
in April 2008. The two lanes of the South Route are currently used as two-way traffic (i.e., thetwo lanes of the South Route are used as one lane each way). The construction of the North
Route is planned to begin when the traffic volume on the South Route reaches 25,000
vehicles/day. The opening of this elongated segment of the road is expected to lead increase in
the traffic volume on the road segment in this yen loan project between Santo Tomas and Lipa.
Table 1. Daily Average Traffic Volume (Santo Tomas-Lipa)
Fiscal Year

Vehicle type*1
Passengercar(includingjeepney)% to previous
year
two-axle
six-wheel or more
% to previous
year
three-axle or moreAt the time of
ex-postevaluation*2
2001
2002

At the time of monitoring2003

2004

2005

2006

2007--

14,801

15,352

14,826

14,216

14,436---4%

-3%

-4%

2%--

1,701

2,024

2,173

2,303

2,583

---

19%

7%

6%

12%

--

770

805

797

838

948

% to previous
5%
-1%
5%
13%
year
Total
15,062 15,925 17,272
18,181
17,796
17,357
17,967% to previous
6%
8%
5%
-2%
-2%
4%
year
*1 Tolls are categorized into Class 1: passenger car (two-axle four-wheel), Class 2: two-axle
six-wheel or more, Class 3: three-axle or more. Class 1 includes jeepneys and SUVs. Class 2
includes buses and trucks. Class 3 includes large buses and trailer trucks.
*2 Data at the time of ex-post evaluation. The average from August to December for 2001 andfrom January to October for 2002.
Source: Star Infrastructure Development Corporation (STAR IDC).

4

Calamba-Santo Tomas is the only segment, which remains unconnected by expressway
between Manila-Batangas route because the Lipa-Batangas segment has already opened. SLTC
(South Luzon Tollway Corp.) has control over construction, operation and management of thissegment. Land acquisition was largely completed and construction work started in March 2008.
It is expected to be finished around the end of 2009.
(2) Saving Travel Time
Similarly to the findings of the evaluation, the travel between Santo Tomas and Lipa (21 km)
takes about 15 minutes. Although there is a substantial traffic volume, it is not so much as tocause congestion, and it allows driving the entire segment at 100 km/h.
2.2 Project Impacts(1) Contribution to Economic Development
Many foreign companies have business in the Philippines. During the construction period of
this project, industrial parks were constructed around Santo Tomas and in Lipa, and someJapanese companies moved into these sites. The move of Japanese companies into thePhilippines that started in the earlier half of the 1990s peaked in 1998, and the investment in thePhilippines declined dramatically after the Asian economic crisis in the second half of 1997.
The sites in the industrial parks between Manila and Batangas were sold well until 1998, but thesales growth has been sluggish thereafter. Recently, sales have become somewhat active,reflecting the favorable condition of Philippine economy. Major investment in the industrial
parks between Manila and Batangas is the construction of the Suzuki factory (manufacturing ofmotorcycles and automobiles) in Lima Industrial Park (developed by a Japanese-owned tradingcompany).
The developers and sales agents dealing with the industrial parks around Santo Tomas andLipa are always emphasizing the presence of Batangas Port as an advantage of industrial parks
in this area; therefore, the companies, moved into these sites, are well informed about theBatangas Port Project. The construction had been completed, at the time of monitoring, however,the container terminal in Batangas was not fully operated. As a result, the companies in theindustrial parks did not use Batangas Port at all. There are problems in Batangas Port as follows;
the contract between the operator of the container terminal and the Philippine Government has
not been concluded, there is no prospect for the arrival of container carriers in this port, andthere are difficulties in the arrangement of land transport between Manila and Batangas. Whencarriers transport commodity such as goods from the site, they currently use Manila Port forcontainer shipment and Manila International Airport for air transport.
At the time of monitoring, interviewing the representatives from eight companies related toindustrial parks around Santo Tomas and in Lipa (LISP, FPIP, LTC), including three industrial
park developers, three forwarders handling the products from the industrial parks, and two
companies operating in the industrial parks was conducted. Obtained the following information
through this hearing:5zzCompanies in the industrial parks do not transport commodities to Batangas area throughthe project road because the container terminal of Batangas Port has not been operated. The
companies in the industrial park in Lipa (Lima Industrial Park; developed and operated bya Japanese-owned trading company) may benefit from the use of the project road for theshipping to Manila area. Yet they transport cargos to Manila by ordinary roads because thetoll gate and the access road to the toll gate are not wide enough for large vehicles.
Forwarders are interested in the full operation of Batangas Port, and are willing to use
Batangas Port when conditions are right. These conditions include smooth customs
clearance procedures, simple logistics and low cost of the use of land transport (truck)
operators, and transport efficiency of cost and time needed in the use of container carriers.

The macro economy of the Philippines has been favorable for several years, and the country
has been recording about 5% of annual economic growth (5.4% in 05/06 and 4.9% in 04/05).
Aside from foreign investment from the U.S. and Korea, the money sent from overseas workers
is helping the increase in consumption. However, it could not derive any conclusion as towhether or not this project had an impact on this economic growth.
While a container terminal was newly constructed in Batangas, this city has long been a hub
for the ferries operating to the island to the south of Luzon. A majority of the large vehicles,
which are increasingly seen on the Santo Tomas-Lipa segment, are passenger buses using ferries.
Although this project has not been utilized as an industrial road, it is used as a transport routeconnecting the capital Manila and local cities. It is expected that the opening of theLipa-Batangas segment will lead to further increase in the traffic volume on this road.
2.3 Sustainability
The management condition is not good. Strengthening of road maintenance works is considerednecessary, focusing on conservation of road shoulders. Because profitability on a single-yearbasis has already been achieved, it is expected that future increase in users will earn more profit
and road maintenance will be improved.
(1)
Technical Capacity for Operation and Maintenance
Similarly to the findings at the time of ex-post evaluation, road maintenance is practiced
including overlaying, repair of damaged parts, mend and conservation of road shoulders, andrepair of drainage canals. Although there is no technical problem, the maintenance condition inthis segment is generally less than satisfactory, suggesting a shortage of necessary workforce. Toimprove road maintenance requires more budget, however, it seems difficult to keep morebudget due to profitability problems.
(2)
Organization for Operation and Maintenance
SIDC, the private company, has control over construction, operation and management of thissegment. SIDC only plays the management role and Star Tall Corp (STC) actually runs
operation and maintenance of the road. There are 188 employees in STC as a whole, including6

33 persons in charge of road maintenance and servicing and 11 persons in charge of machineservicing. The expressway service is operated on a three-shift basis. Security teams patrol thesegment, divided into two, respectively. The employment of local inhabitants in weeding works,
which was confirmed during ex-post evaluation, has been discontinued, and the work is now
conducted by outside contractors. (STC explains that the commissioning to local inhabitants
was discontinued because their work is slow and low quality.)
The Lipa-Batangas segment has been constructed and operated/maintained by SIDC using theBOT scheme. Under the road construction policy in the Philippines, arterial toll roads
connecting major cities should be constructed using the BOT scheme. Up to the present, four
segments of toll roads, including the segment in this project, have been completed. In addition,
five segments are being constructed or in the preparatory stage for construction, and elevensegments are planned.
(3)
Financial Status
The request for the financial data of SIDC and STC was rejected. Although cumulative debt
has not been eliminated, on a single-year basis it turned into the black in fiscal 2006/7.
According to SIDC, there is no financial problem of business management.
(4)
Maintenance Condition
The condition of road pavement is not good. Road surfaces have become partially wavy, andsome segments are showing signs of inferior workmanship in construction. According tomultiple persons related to such segments, “it is always about this level of quality even just after
the completion.” The ex-post evaluation reported that poorly paved parts were found when theroad was transferred from DPWH to SIDC (August 2001).
At the time of ex-post evaluation, the request for the installation of street lighting facilities
was come out from industrial park developers/operators and tenant companies during thehearing. At the time of monitoring, there was no streetlight, and this problem has not beenimproved. However, according to the regulations on toll roads in the Philippines, South Luzon
Expressway in this project is not required to have street lighting. Although night patrol isconducted, there are few signboards noting emergency contacts, and the provisions for
emergency response to accidents are not adequate (however, there are very few users at night).
Vehicles carrying cargos from Lima Industrial Park use ordinary roads because the access roads
to interchanges (Bulihan and Sambat) are not wide enough for large vehicles. In addition,
maintenance of road shoulders is not satisfactory, and weeding is inadequate. In particular, theaccess roads leading from the interchange to the lane have severely damaged road shoulders.
The road edges are collapsed because road shoulders in these parts are unpaved. Drainage
canals are grassy.
As seen above, the matters pointed out at the hearing survey during ex-post evaluation havenot been addressed adequately.

73. Conclusions, Lessons Learned, and Recommendations
3.1 Conclusions
The Santo Tomas-Batangas segment was opened and the convenience for users improved.
The traffic volume is expected to increase further once the Calamba-Santo Tomas is completed.
The full operation of Batangas Port in the future will increase the traffic volume on the road in
this project. This road, in turn, is expected to serve for the further effective utilization ofBatangas Port.
3.2 Recommendations and Issues Requiring Follow-up[To SIDC] Improvement of road maintenance should be carried out. Even if installment of street
lighting is not necessary, toll road operation considering the safety of users and taking additional
measures such as the installation of more signboards noting emergency contacts should beimplemented.
[To the Philippine Government and DPWH] SIDC maintaining this road may tend to withhold
expenditure even though it is absolute need and urgency because it is a private company. The
condition of road operation and maintenance should be monitored regularly and if there are any
problems detected, improvement should be requested to the SIDC by the it should be made by
the public authorities.
3.3 Lessons LearnedNone(End)8