Filipino-Chinese consortium to build $3.5 billion subway line in Makati City
MAKATI CITY, NNA – Philippine Infradev Holdings Inc., together with its Chinese partners, will begin the construction of a subway line in Makati City in Metro Manila to ease traffic congestion in the business district.
The Philippine-based real estate firm, which leads a consortium with mostly Chinese firms, inked an agreement with Makati City on Tuesday that officially paves the way for construction of the intracity subway system to start by the end of the year.
The $3.5 billion subway will have 10 stations and trains with up to six cars that can accommodate up to 200 passengers each. The 10-kilometer subway is expected to carry 700,000 passengers a day when it becomes fully operational in 2025.
“The subway may help in reducing the number of cars on the streets,” Makati City Mayor Abigail Binay told reporters. “Aside from that, what we want for Makati is for the people to walk. We want to have pedestrianization.”
The subway is expected to result in around 270,000 fewer cars in the area, according to Antonio Tiu, president and CEO of Philippine Infradev.
Tiu said the company plans to extend the subway to other cities and connect it with other mass transportation systems such as the MRT-3 and the Japan-led Metro Manila Subway.
Binay said the construction will start once a tunnel boring machine arrives by the end of the year.
The Filipino firm bagged the public-private partnership deal last year after no other company challenged the project proposal it submitted to the Makati City local government.
Under Philippine law, local governments are allowed to have joint ventures with private firms to build public infrastructure facilities.
Philippine Infradev’s Chinese partners include Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Kwan On Holdings Ltd., and China Harbour Engineering Company Ltd.
Infradev also inked a deal with China Civil Engineering Construction Corporation, a wholly owned subsidiary of state-owned China Railway Construction Corporation Ltd., which will undertake the construction of the subway, and invest around $300 million to $350 million.
Under the joint venture deal, the consortium will finance, operate and maintain the subway line. Infradev CEO Tiu said while the project is undertaken by the consortium, a private proponent, Makati City will be a minority shareholder.
He said the revenue share might be an 80-20 split between the consortium and the city. Tiu expects the partners to recover their investments 10 years after the subway starts operating.
Binay noted the Makati city government will not release any “cash out” for the project. She said the city would only contribute land it currently owns which to be used in the subway system.