The Metro Cebu Land Use and Transport Study (MCLUTS) was established in October 1978 by the then Ministry of Public Works, Transportation and Communications (MPWTC), with the cooperation of the National Economic and Development Authority (NEDA), the then Ministry of Public Highways (MPH), the Ministry of Human Settlements (MHS), and other government agencies. With the split of MPWTC into two separate ministries in July 1979, the execution of MCLUTS became the responsibility of the new Ministry of Transportation and Communications (MOTC). The study consisted of two phases. Phase I is concerned with formulating a Strategic Plan to guide the short, medium, and long-term development of Metro Cebu. Phase II involves the implementation of some recommendations of MCLUTS I and a detailed study of others.
In May 1979, a Memorandum of Understanding was signed by the Governments of the Philippines and Australia, defining the respective responsibilities and contributions of the two governments in relation to MCLUTS 1. MCLUTS 1, which lasted up to December 1980, was carried out jointly by U.P. PLANADES and REDECON-Australia on behalf of the Philippine Government and Australian Government, respectively.
The Ministry of Transportation and Communication (MOTC), along with the city/municipal governments in Metro Cebu and the Cebu provincial government decided to establish immediately (beginning January 1981) the second phase of MCLUTS to assist in the implementation of some of its recommendations and to develop others to a stage wherein direct implementation could be effected. The services of the U.P. PLANADES were again engaged to undertake this phase of the project. With the creation of the Central Visayas Urban and Rural Projects (CVURP) in May 1981, through Executive Order No. 694, MCLUTS became a part of CVURP, hence entitling it to financial support by World Bank.