PH Infradev bags $332M for Makati subway project
Credit to Author: Lisbet K. Esmael| Date: Tue, 29 Oct 2019 17:49:34 +0000
LISTED Philippine Infradev Holdings Inc., the proponent of the Makati Subway project, has secured $332 million from Chinese firms to help finance the $3.7-billion mass transportation system.
In a disclosure, the company said on Tuesday it has inked a deal with Hui Gao Investments Development Ltd., where the latter would provide a $102-million equity investment and another $200 million credit facility to Philippine Infradev’s unit Makati City Subway Inc. (MCSI).
MCSI, which will build and operate the multibillion dollar project, also enticed Shanghai Mintu Investments Ltd. to subscribe 51 million MCSI shares amounting to $30 million.
Philippine Infradev, formerly IRC Properties Inc., leads the consortium, which is composed of Chinese partners Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Holdings Ltd. and China Harbour Engineering Co. Ltd.
The Makati subway is a 10-kilometer intracity mass transport system with 10 stations that would connect the central business district at the corner of Ayala and Sen. Gil Puyat avenues with Circuit City, Makati City Hall, University of Makati, Ospital ng Makati and other growth areas in Makati.
The completion and operation of the project is being eyed in 2025. The subway can accommodate up to six car trains, with room for over 200 passengers per car.
Over 700,000 daily commuters are expected to benefit from the mass transport system, the city government of Makati said.
The project will generate about 10,000 jobs, Makati Mayor Mar-Len Abigail Binay said late in July.
Together with the land contribution of Makati City and the initial investment, the subway project now has an initial funding of about $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, who is also “grateful to the new partners from the Chinese business community for showing their trust in the viability of the subway project through their investments.”
The subway system is expected to increase work productivity by cutting down the daily commute or travel time of workers. According to congestion valuations by the Japan International Cooperation Agency, the Philippines will gain at least $600 million annually in gross domestic product (GDP) from enhanced worker productivity.
The Makati subway is the first and most ambitious underground railway project undertaken by a local government unit in the Philippines.
On July 30, Binay led the Makati City government in signing the historic joint venture agreement with Philippine Infradev, represented by its chairman Ren Jinhua, for the subway project in a ceremony held at the Makati City Hall.
Philippine Infradev got 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 agreement, Makati would contribute land it currently owns for the project, with no cash out from the city government.
WITH JAN ARCILLA