Duterte to Build a $1 Billion New City for Thousands of Workers

(Bloomberg) -- Thousands of government workers will be moved from Manila to a new city that’s being built in a former U.S. military base, as President Rodrigo Duterte’s administration seeks to ease a traffic gridlock in the capital.

The government and private companies are investing more than 50 billion pesos ($1 billion) to build an administrative center in New Clark City. Within five years, the area is expected to have at least eight mid-rise government towers, 8,000 housing units and a train connecting it to Manila, about 100 kilometers (62 miles) away.

“The vision is to build a new thriving city outside metro Manila that’s well-planned, future proof,” said Vince Dizon, president of the state-run Bases Conversion Development Authority which is overseeing the 9,450 hectare development. “We will slowly move some government activities to Clark to pump-prime the city.”

The project is part of Duterte’s plan to decentralize state offices away from Manila’s gridlocked streets. The capital, home to 13 million people and accounting for about one-third of the nation’s economy, will become a “dead city” within 25 years, Duterte said in a speech last month supporting the development of the city, whose name is derived from the former Clark Air Force Base that was closed in 1991.

About 1 million people in the capital region work for the government, adding to traffic congestion that a 2014 Japan International Cooperation Agency study said costs the economy about 2.5 billion pesos a day in lost productivity. That’s expected to climb to 6 billion pesos a day by 2030.

Bases Conversion will start moving to Clark this year. The Department of Transportation transferred its office to Clark in 2017.

The first phase of the 200-hectare administrative center also involves the development of back-up offices for government agencies to ensure continuity in case of disaster. An aquatics and athletics center that will serve as the venue for the 30th SEA Games in late 2019, is also planned, Dizon said.

An expansion of Clark Airport is scheduled to be completed by the first half of 2020, enabling it to handle 12 million passengers a year and double the number of domestic flights from about 240 weekly. Bases Conversion, the manager of former military properties, will publish the bidding terms for the contract to operate Clark Airport this week.

At least 12 billion pesos of roads and bridges will be built in the next two years, while an industrial park planned by Filinvest Land Inc. may have an initial investment of at least 10 billion pesos, Dizon said.

To help fund the Clark City development, Dizon said Bases Conversion will sell up to 60 hectares of real estate in Taguig City near the financial district of Makati, where land prices are at a record high.

--With assistance from Andreo Calonzo

To contact the reporters on this story: Cecilia Yap in Manila at cyap19@bloomberg.net, Clarissa Batino in Manila at cbatino@bloomberg.net.

To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Peter Vercoe

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