By Jel Santos
An additional US$332 million has been made available as initial funding for the Makati subway project after Philippine Infradev Holdings, Inc. signed investment agreements with key Chinese firm partners in Hong Kong on October 28, Mayor Abigail “Abby” Binay announced Tuesday.
The Philippine Infradev Holdings, Inc., formerly IRC Properties, is the lead private sector proponent in the joint venture with Makati City.
Binay, who was present at the signing ceremony, said Hui Gao Investments Development Ltd. has agreed to provide $102 million as equity investment and $200 million in credit facility to be used for the country’s first intra-city subway system.
Shanghai Mintu Investments Ltd. 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, Binay added.
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 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 in a statement.
Binay expressed gratitude to the new partners from the Chinese business community for their investments.
“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 said.
Hui Gao Investments Development Ltd. 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 is an investment holding group focusing on infrastructure, mass transportation, and financial services. It built the Jiangyin Yangtze River bridge, the longest bridge in China and third longest in the world when it was completed in 1999.
The project, the mayor said, will generate 10,000 jobs for Makati residents in the construction and operation of the subway. Upon Binay’s request, job opportunities will be opened to able-bodied Makati senior citizens once the subway begins to operate in 2025.
The subway system is expected to increase work productivity by cutting down the daily commute or travel time of workers. Based on JICA’s congestion valuations, the Philippines will gain at least US$600 million annually in GDP just for enhanced productivity.
Aside from Mayor Binay, also present at the signing ceremony in Hong Kong were three members of the Chinese People’s Political Consultative Conference (CPPCC) Standing Committee, namely, 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, member of CPPCC.
The local government of Makati City was also represented by lawyer Claro Certeza, City Administrator and Chairman of the PPP Selection Committee; and lawyer Michael Camiña, City Legal Officer and Secretary of the PPP Selection Committee.
The Makati subway is the first and most ambitious underground railway project undertaken by a local government unit in the Philippines.
It would link key points in Makati, like the 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.
According to the local government, the subway will have up to 10 air-conditioned, underground island stations which entrances will be connected to destinations around the city. It can accommodate up to six car trains, with room for over 200 persons per car, with over 700,000 passengers per day to be catered by the proposed mass transport system.
The intra-city subway is eyed to complement 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.
Moreover, it is expected to make a positive impact to neighboring cities as it will decongest traffic on their thoroughfares, especially in major roads.