Philippine Infradev Holdings Inc. of businessman Antonio Tiu said Wednesday a subsidiary signed a $1.2-billion engineering, procurement and construction contract with a Chinese company for the construction of the Makati Subway Project.
Philippine Infradev said in a disclosure to the stock exchange Wednesday wholly-owned unit Makati City Subway Inc., the corporate vehicle that will build the Makati Subway Project, signed the EPC deal with China Construction Second Engineering Bureau Co. Ltd.
The EPC agreement involves the civil, mechanical, electrical and plumbing works of he project.
The Makati Subway Project is an 11-kilometer intra-city mass transport system with up to 10 stations that will connect key points in Makati’s two districts, with no cash out from the city government.
It is expected to accommodate up to 700,000 passengers per day aboard six car trains with a capacity of about 200 people each.
Philippine Infradev said the project was in line with the national government’s aggressive infrastructure program and Makati’s goal to be a digital city.
It will also complement mass transport projects of the government as it would be interconnected to the Metro Rail Transit Line 3, the proposed Metro Manila Mega Subway and the Pasig River ferry.
The entire project, which would cost $3.7 billion, is expected to be operational by 2025.
The company obtained the notice to proceed with the Makati Subway Project under the public-private partnership agreement with the local government of Makati in February this year.
Philippine Infradev also obtained shareholders’ approval to increase its authorized capital to P10.5 billion from P1.5 billion.
Philippine Infradev obtained investment deals with two Chinese companies to finance the Makati subway project. Hui Gao Investments Development Limited will subscribe to common shares representing 34 percent of Philippine Infradev’s adjusted shares capital for $102 million.
Philippine Infradev subscribed to 51 million common shares in MCSI for $102 million. Hui Gao will also provide a $200-million credit facility to MCSI.
Proponents of the Makati Subway earlier shelled out over P1.1 billion to pay the owners of 55 lots who agreed with the city government to use their property for the project.
City administrator lawyer Claro Certeza, who chairs the Private-Public Partnership project Selection Committee, said the initial 55 lots had a combined value of P1.18 billion and cover a total area of 7,638.83 square meters.
“These landowners who promptly accepted the offer, will each get a P1-million incentive granted by Makati Subway Inc.,” Certeza said.
Five of the 55 property owners have submitted all the required documents and were paid a total P62.9 million by the Makati Subway, Inc.
The owners of the remaining 49 lots are currently processing the documents for the transfer, Certeza said.