Makati to get control of subway project – Abby

MANILA, Philippines — Full control of the Makati subway project is set to be transferred to the city government, former mayor Abby Binay said over the weekend.

Resolution of proceedings with the Singapore International Arbitration Center (SIAC) will grant the city of Makati ownership of Makati City Subway Inc. (MCSI), with a net value of $1.6 billion, free of liabilities and including land assets.

About $160 million will be paid by Makati to its public-private partner for actual investment made on the subway project, as determined by independent auditing firm Pricewaterhouse Coopers.

“It’s a win for Makati,” Binay said. “It will end years of legal uncertainty and positions Makati to drive the subway project forward on its own terms.”

In April, Philippine InfraDev Holdings Inc. filed an arbitration case and sought around $1.7 billion in claims, arguing that the subway project was “no longer economically and operationally feasible” due to the Supreme Court (SC)’s decision on the land dispute between Makati and Taguig.

The subway project has been delayed since 2019 due to the pandemic and the SC ruling, which covered locations where the subway depot and four stations were planned.

Makati asserted that the ruling fell under the principle of force majeure while InfraDev argued that the decision constituted a change of law and Makati defaulted on its obligations under the 2019 joint venture agreement.

Binay said acquiring the MCSI would boost Makati’s assets.

Based on the Commission on Audit’s 2023 annual financial report on local governments, Makati’s assets totaled P243.444 billion – an increase from P239.478 billion in 2022.

The transfer of 10 enlisted men’s barrios to Taguig resulted in savings for Makati since P7.9 billion in subsidies was allotted to the barangays, Binay noted.

Midnight deal?

Makati Mayor Nancy Binay, however, flagged an alleged “midnight settlement” between the city government and InfraDev.

She said the city’s financial health would be jeopardized if it pays $160 million to Infradev within 90 days, as stipulated in a deal signed by her sister Abby on June 23.

The mayor said the SIAC must issue a consent award before enforcing the settlement.

If Makati fails to pay the settlement, the city may face an additional P30 million in liquidated damages and 2.5 percent overdue interest.

City budget officer Aileen Mallillin earlier said there is no available appropriation in the 2025 budget to cover the settlement.

Abby Binay, however, said Mallillin’s certification does not reflect Makati’s current financial status.

“Available appropriation and availability of funds are two different things,” the former mayor told The STAR yesterday. “That’s basic in local government budget parlance.”

Without available appropriation, she said the solution is a supplementary budget approved by the city council.

“The budget officer who made the certification does not know how much money the city has. That is the job of the city treasurer,” she said.