An initial funding of US$332 million (about P16.9 billion) has been made available for the Makati City Subway system project after the proponent signed investment agreements with Chinese firm partners in Hong Kong last Monday.
Makati City Mayor Abigail Binay witnessed the signing ceremony made by the Philippine Infradev Holdings, Inc., the project’s lead private sector proponent, and its partner Hui Gao Investments Development Limited.
Binay said the Chinese firm has agreed to provide $102 million as equity investment and $200 million in credit facility to be used for the Philippines’ first intra-city subway system.
Shanghai Mintu Investments Ltd. also signed a subscription agreement for direct equity investments of $30 million in Makati City Subway, Inc., the corporate entity that will construct and operate the subway system, said Binay.
Together with the land contribution of Makati City and the initial investment, the Makati City Subway System now has an initial funding of around $500 million.
The Makati Subway, the first and most ambitious underground railway project undertaken by a local government unit in the Philippines, is expected to increase work productivity by cutting down the daily commute or travel time of workers.
“The Makati Subway project is definitely gaining momentum, and we are confident that our lead partner Philippine Infradev Holdings will be able to sustain the pace and finish the project on schedule,” Binay said.
“We are also grateful to our new partners from the Chinese business community for showing their trust in the viability of the subway project through their investments. With their vote of confidence, we anticipate more investors coming in to share our vision for the city,” she added.
Hui Gao Investments Development Limited is an affiliate of the Redco Properties Group. Redco is a HK publicly listed integrated property developer focusing on mid-to-high-end residential and commercial property development in the People’s Republic of China.
Shanghai MinTu, on the other hand, is an investment holding group focusing on infrastructure, mass transportation, and financial services. The company built the Jiangyin Yangtze River bridge, the longest bridge in China and third longest in the world when it was completed in 1999.
Binay said around 10,000 jobs will be made available to Makati residents in the construction and operation of the subway. Upon her request, job opportunities will be opened to Makati senior citizens who are still fit to work once the subway starts to operate in 2025.
Experts said the Philippines will gain at least US$600 million (P30.6 billion) annually in Gross Domestic Product just for enhanced productivity.
Also present at the signing ceremony in Hongkong were three members of the Chinese People’s Political Consultative Conference (CPPCC) Standing Committee: Wu Lianghao, Chairman of the Board of Directors of Kingway Group Holding Co., Ltd.; Zhou Andayuan, Non-Executive Director and Honorary Chairman of China Ocean Ship Building Industry Group Ltd.; and Wei Mingde, CPPCC Member.
Makati City was also represented by Claro Certeza, City Administrator and Chairman of the PPP Selection Committee, and Michael Camiña, City Legal Officer and Secretary of the PPP Selection Committee.
On July 30, Mayor Binay led the city government in signing the historic Joint Venture Agreement with Philippine Infradev Holdings Inc., represented by Chairman Ren Jinhua, for the subway project in a ceremony held at Makati City Hall.
Philippine Infradev hurdled a 60-day competitive Swiss Challenge and obtained the approval from the Makati City Council on July 19 for the construction, operation and management of the intra-city subway.
Under the joint venture, Makati would only contribute land it currently owns for the project, and there will be no cash out from the city government.
The subway would connect key points in Makati like the current Central Business District at the corner of Ayala and Sen. Gil Puyat Avenues, Circuit City, Makati City Hall, University of Makati, Ospital ng Makati and other new growth areas within the city.
The subway will have up to 10 air-conditioned, underground island stations which entrances will be linked to destinations across the city. It can accommodate up to six car trains, with room for over 200 persons per car, with more than 700,000 passengers per day to be accommodated and served by the proposed mass transport system.
Makati’s intra-city subway is seen complementing the National Government’s mass transport projects as it would be connected to the proposed Metro Manila Mega Subway project, MRT stations, and the Pasig River ferry.
The Makati Subway is also expected to make a positive impact on neighboring cities as it will help decongest traffic, particularly in major thoroughfares.