Saving a Rail Line in Crisis: How an Urban Rail Rehabilitation Project Transformed Manila

Could you walk us through Sumitomo Corporation's involvement in the railway sector and where you're focusing today?

HondaSumitomo Corporation's railway business dates from the 1940s, when we began exporting wheels and axles for trains made by Japanese manufacturers. By the 1950s, we had expanded to exporting freight and passenger cars. From the 1980s onwards, we began focusing on exporting entire railway systems, including onsite installation. Today, we handle "full turnkey" (*) contracts covering everything from civil engineering and construction to rolling stock and rail operation systems. We've also moved into the railway business itself, including investment and management.

What is MRT-3 specifically, and why is it so important?

TakahashiMRT-3 spans 17 kilometers with 13 stations, running through key business districts and upscale residential areas. In 1997, Sumitomo Corporation and Mitsubishi Heavy Industries (MHI) secured a full turnkey contract covering civil works, rolling stock and systems for MRT-3. It was completed in 2000 and went into service the same year.

HondaThe project was implemented through a Public Private Partnership (PPP), with private companies responsible for construction and maintenance. But the Philippine government at the time had a poor credit rating, making other private firms hesitant to get involved. President Fidel V. Ramos himself reached out directly to ask if Sumitomo Corporation could take on the project. While other companies backed off, we saw long-term potential in the Manila rail business and stepped in – a decision that gave us an advantageous position in the Asian railway sector down the line.

In 2018, Sumitomo Corporation was re-contracted for the rehabilitation of MRT-3. What happened between the line's completion and 2018?

HondaAfter completion, Sumitomo Corporation and the MHI Group were contracted to provide maintenance services on the line for 12 years. But following a change in administration, the contract was handed off to local firms. Maintenance providers changed three times, and each change brought a decline in service quality. The trains and systems deteriorated – top speeds fell from 60 km/h to 30 km/h, trains stalled between stations, and in some cases the trains even emitted smoke. Frequently, passengers were forced to walk along elevated tracks.

TakahashiCommuting in Metro Manila meant an average round trip of about six hours at the time. With service frequency and train speeds cut in half, MRT-3 became severely overcrowded. Station wait times ballooned, adding massive stress to daily life. The estimated economic loss due to traffic congestion was around 6 to 7 billion yen per day.

It sounds like the system had become a full-blown social crisis.

Once work began, did things go smoothly?

HondaNot exactly. The COVID-19 pandemic hit in 2020, and all MHI staff were forced to return to Japan. I was the only one who stayed behind in Manila. The MHI team managed the site remotely, but progress inevitably slowed. One day, I was summoned by a Philippine counterpart. Expecting criticism, I was surprised when he tearfully thanked me and pledged to support us in any way he could. The MRT-3 was a vital lifeline for essential workers, and the transport minister had issued a strict directive that operations must not stop. With the Japanese engineers – our last resort – having returned home, I think the local project leader was understandably anxious. Nonetheless, he placed his trust in me and offered words of encouragement. That show of trust and support encouraged everyone involved, and we finished the rehabilitation work six months ahead of schedule at the end of 2021.

TakahashiWe only had a few hours each night – between the last train and the first – to carry out intensive work. Every step had to be meticulously planned. Unforeseen problems cropped up constantly: subcontractors ran into financial trouble making it difficult to continue operations, communication breakdowns led to customer complaints. Solving these issues, even beyond the technical side, became a key part of our job. The pressure to finish safely and on schedule was enormous.

HondaEven after the rehabilitation work was completed, there were still incidents like small fires breaking out inside trains and malfunctions in the signaling equipment causing service disruptions. These were due to the design and service life of the system, aspects that we didn't have any control over. Still, public expectations were sky-high, and every issue sparked criticism of the government on social media. Accordingly, we took it upon ourselves to be transparent, accountable and proactive in sharing updates, including negative developments.

What has the public reaction been since the project was completed?

What is the future of Sumitomo Corporation's railway business?

HondaIn 2024, we secured a contract, alongside UK-based rail operator The Go-Ahead Group and Tokyo Metro, to operate the Elizabeth Line, part of the London Underground. Operations are set to begin in May 2025. Looking ahead, our strategic focus includes Bangladesh, where multiple railway projects using Japanese systems are planned. Southeast Asia remains a key region, given its strong and growing demand for railway infrastructure. We are also exploring opportunities in North America – where we’ve maintained long-standing business relationships – for potential expansion into the freight rail sector.