Light Rail Transit Authority (Line 2)

August 8, 2006 FIRB RESOLUTION NO. 008-06 SUBJECT : Light Rail Transit Authority (Line 2) WHEREAS, the Light Rail Transit Authority (LRTA) is engaged in the operation of a mass transport system intended to answer the transport needs of commuters belonging generally to the low and middle income groups and to decongest the road traffic network; WHEREAS, Line 1 Rehabilitation Project Phase II (Modernization II) aims to fully modernize the existing light rail vehicles (LRVs); WHEREAS, the Modernization II Project requires the replacement of old contractors, refurbishment of relay panel and miniature circuit breakers, cleaning the chopper box, and procurement of additional spare parts for rolling stock; WHEREAS, Line 1 Capacity Expansion Project Phase II Package A (Capacity Expansion II) aims at further expanding the LRT Line 1 ridership from 27,000 passengers per hour per direction (pphpd) to 40,000 pphpd; WHEREAS, the Capacity Expansion II Project is intended to cope with the present and expected increase in the volume of passengers using LRT Line 1 and additional passengers generated under the integrated MRT Line 1, 2 and 3 System; WHEREAS, the Capacity Expansion II Project involves the acquisition and installation of air-conditioning units in the old fleet and acquisition of twelve (12) additional air-conditioning 4-car trains which will require additional upgrading and equipment for signaling, telecommunications, traction power supply and distributions, track works, automated fare collection, system and additional civil works for some stations and depot to accommodate the new trains and enhance the headway; WHEREAS, if the taxes and duties on the Project-related importations are borne by the LRTA, it may have financial difficulty in complying with such obligations, in view of its tight financial position; WHEREAS, there is also a need to ensure that all importation covered by the tax subsidy grant will be used exclusively for the Projects as above-described and not for other purposes; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to grant tax subsidy to the LRTA to cover taxes and duties on its 2006 importation of materials and equipment for the following Projects in the amount of FIVE HUNDRED FIFTEEN MILLION FORTY ONE THOUSAND AND ONE PESOS (P515,041,001.00), broken down as follows: Project Amount Line 1 Rehabilitation Project Phase II (Modernization II) P190,685,852.00 Line 1 Capacity Expansion Project Phase II Package A 324,355,149.00 Total P515,041,001.00 =========== Provided, however , that: (a) the initial issuance of the corresponding Certificate of Entitlement to Subsidy (CES) shall be limited to the amount of P17,025,379.00 for three (3) shipments that arrived from January 22, 2006 to March 11, 2006 for the Modernization II Project and P12,368,140.00 for eight (8) shipments that arrived from February 4, 2006 to March 10, 2006 for the Capacity Expansion II Project; (b) the subsequent CES shall be issued upon the submission by the LRTA to the FIRB of required billings and/or documents evidencing the importation; and (c) all materials and equipment for which tax subsidy is granted shall form part of the regular inventory of the LRTA (in the case of materials and movable equipment) and/or be located in their designated project stations/operating areas (in the case of immovable equipment) as certified to by the resident Commission on Audit (COA) auditor of the LRTA and its Project Station/Operating Area Manager, respectively: Provided, finally , that the grant of such subsidy shall be in accordance with the terms and conditions of Section 14 of the 2005 General Appropriations Act, as reenacted, subject to the availability of finds therefor, pursuant to the terms and conditions of the Rules and Regulations to Implement the Subsidy Provision Under Executive Order No. 93. SDITAC (SGD.) GIL S. BELTRAN Undersecretary of Finance Presiding Officer - FIRB Reference: Joint FIRB-Technical Committee Meeting dated August 8, 2006