Makati subway gets $332M funding from Chinese firms

Metro Manila (CNN Philippines, October 29) — The planned Makati City Subway System has secured $332 million (about ₱17 billion) in fresh funding from two Chinese companies, the city government said Tuesday.

In a disclosure, private proponent Philippine Infradev Holdings, Inc. said it has signed an investment deal with Hui Gao Investments Development Limited worth $302 million. The amount is split into a $102-million capital infusion through shares of stock, and a $200-million credit line to build the subway.

Infradev secured the deal in July through a joint venture with the city government. The firm owned by businessman Antonio Tiu will be building and operating the new subway through its subsidiary, Makati City Subway, Inc. (MCSI).

Under the deal, Hui Gao would provide "51 percent of the funding required for the completion of the Makati City Subway System." The money must be released within 60 days from the agreement, which was signed Tuesday in Hong Kong.

Mayor Abigail Binay witnessed the signing of the deals in Hong Kong, together with members of Makati's Public-Private Partnership Selection Committee. Members of the standing committee of the Chinese People's Political Consultative Conference were also present.

MCSI also secured $30 million through a share sale to Shanghai Mintu Investments Ltd., with the amount received by the company.

In a separate statement, Binay said that the subway project now has an initial funding of $500 million (about ₱25.5 billion) to include the land contribution of the city government.

Hui Gao is a unit of the Chinese developer Redco Properties Group Limited, while Shanghai MinTu is another Chinese construction firm that built one of the longest bridges in mainland China, Binay said.

The Makati subway plan is separate from the inter-city Metro Manila Subway System funded by Japan.

The trains will cut travel time along the 10-kilometer stretch from 1.5 hours to just 10-15 minutes, but would likely charge higher than the fares for the existing Light Rail Transit and the Metro Rail Transit-3 (MRT).

READ: Makati subway to charge least 20% higher than LRT, MRT fares

The city loop consists of 10 stops from the Ospital ng Makati to Ayala Avenue. Tiu earlier said the subway will connect to the MRT Guadalupe Station and the upcoming Mega Manila subway, and can cater to 700,000 passengers in a day.

Infradev previously submitted a $350-million performance bond to the city government for the $3.7-billion (about ₱180 billion) subway project, which broke ground in December.

Construction will last for three years to be followed by trial runs and safety checks for six months, with the subway line eyed running by 2025.