Philippines Infradev, Makati formalize deal for $3.5-B subway project

MANILA, Philippines — Philippine Infradev Holdings Inc. and the city government of Makati signed yesterday the joint venture agreement for the $3.5 billion Makati City subway project.

“After today, we are now in a new era,” said Philippine Infradev president and CEO Antonio Tiu as he noted the start of a process to develop what could be the country’s first subway.

With the signing, Tiu said it is now all systems go for the subway development, targeted to be in place in five years.

Makati City Mayor Abby Binay said the project is a game changer.

“This is really happening. This is happening in our city and it will be the first subway in the country,” Binay said.

The proponents signed the joint venture agreement during a ceremony held yesterday at the Makati City Hall.

Philippine Infradev chairman Ren Jinhua and Tiu represented the company, while Binay signed on behalf of the local government.

“It’s a joint venture agreement wherein the private proponent gets the lead and the Makati City government will take a minority role, but very significant in terms of helping up clear the spaces. There will be a few pieces of property and the city government will help us with the right of way,” Tiu said.

Philippine Infradev, formerly IRC Properties Inc., earlier received the green light from Makati City’s Public-Private Partnership (PPP) Selection Committee to proceed with the  subway project after the firm hurdled a 30-day competitive Swiss challenge.

In a disclosure to the Philippine Stock Exchange yesterday, the company said it has also submitted a $350-million performance bond for the project, paving the way for the signing of the joint venture agreement.

The $3.5-billion Makati City subway, to be known as MkTr, is touted as the biggest PPP project for a local government unit. The performance bond is a pre-condition for the signing of the joint venture agreement.

The proposed subway would connect key points in Makati such as the central business district along Ayala Avenue, Makati City Hall, Poblacion Heritage Site, University of Makati, Ospital ng Makati and the other new business districts within the city.

It will have up to 10 air-conditioned, underground island stations.

The system can accommodate up to six car trains, with room for over 200 persons per car, and over 700,000 passengers per day to be accommodated and served by the proposed mass transport system.

The proposed intracity subway is seen complementing the mass transport projects of the national government as it would be connected to the MRT stations, the proposed Metro Manila Mega Subway and the Pasig River ferry.

Tiu said the project would earn not so much from the transport fares – which would just be pegged at par with MRT rates – but from the retail business in the subway stations.

“We will generate more non-fare revenue from fare revenue,” Tiu said.

He said there would be a total of 32 hectares of commercial space from the whole stretch of the subway line, just for the first phase of the project alone.   – With Robertzon Ramirez