By Denise A. Valdez, Reporter
PHILIPPINE Infradev Holdings, Inc. signed yesterday its joint venture agreement (JVA) with the city government of Makati for the construction and operation of the $3.5-billion intracity subway project.
The Antonio L. Tiu-led firm inked the 50-year deal at the Makati City Hall Tuesday, after posting its $350-million performance bond to undertake the Makati City Subway Project.
“The project is undertaken by the private proponent… But the city will be a minority shareholder as a part owner because of some contributions in terms of the land that will be used for the stations,” Mr. Tiu told reporters after the signing program.
Philippine Infradev will be in charge of building the 10-kilometer railway system and handling its operations and maintenance after its completion.
Construction is slated to begin in December with the arrival of the tunnel boring machine.
“The construction, hopefully the tunnel boring machine will arrive by December this year. (This) is the technology we will use to ensure that the project will be completed on time,” Makati Mayor Mar-Len Abigail S. Binay-Campos said at a briefing after the contract signing.
At least eight of the 10 stations of the underground railway is scheduled to open in 2025. Once operational, the Makati City Subway is seen to help ease road congestion by offering an alternative transportation means that will accommodate 700,000 passengers daily.
Ms. Binay said the subway is expected to cut travel time from the University of Makati to SM Makati to 10 minutes from the usual one hour by road.
Mr. Tiu said Philippine Infradev hopes to recoup its investments from building the subway after 10 years, with profitability seen in about five years from the start of operations.
“We expect to recover our investment in probably 10 years after operations. We will lease property, we will offer advertising opportunities, a lot of non-fare revenue that are significant so we don’t have to charge passenger high fares,” he said.
“We should start generating positive cash flow in year five or year six,” he added.
End-to-end fare at the Makati City Subway is expected to be close to the fares implemented at the Metro Rail Transit Line 3, or a little above P20.
Joining Philippine Infradev in the construction of the Makati City Subway are Chinese partners Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Holdings Ltd. and China Harbour Engineering Company Ltd.