Makati’s full subway project ownership seen

Makati City is set to take full ownership of the corporate entity established to develop and operate its stalled underground train system, according to former Makati Mayor Abby Binay.

This development comes as part of ongoing arbitration proceedings with the Singapore International Arbitration Centre (SIAC).

Binay disclosed that the arbitration outcome is expected to grant Makati City full ownership of Makati City Subway Inc. (MCSI), valuing the entity at $1.6 billion. The city will reportedly acquire MCSI free of liabilities and with its land assets, after paying $160 million to its public-private partner (PPP).

“It’s a win for Makati. It will end years of legal uncertainty and positions Makati to drive the Subway Project forward on its own terms,” Binay said in a statement released Sunday.

The Makati Subway System, initially envisioned as a 10-kilometer line from EDSA-Ayala to Ospital ng Makati, broke ground in 2018.

In 2019, the Makati City government awarded the PPP deal to Philippine Infradev Holdings Inc. and its Chinese partners: Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd. Holdings Ltd. and China Harbour Engineering Company Ltd.

However, construction halted in 2022 following a Supreme Court ruling that transferred jurisdiction of several areas, including Cembo, Comembo, East Rembo, Pembo, Pitogo, Post Proper Northside, Post Proper Southside, Rizal, South Cembo, West Rembo and Fort Bonifacio, to Taguig City.

Philippine Infradev Holdings Inc. subsequently said that the Makati Subway System became unviable due to the ruling. The original plan included a depot in Barangay Cembo and stations in the University of Makati in West Rembo and Ospital ng Makati in Pembo — all areas now under Taguig’s jurisdiction.

Philippine Infradev Holdings then sought international arbitration with the SIAC for an “impartial resolution of the agreement with Makati.”

According to Binay, the anticipated arbitration resolution will require Makati to pay $160 million to the private partner. This amount approximates the actual investment made on the project, as determined by auditing firm PricewaterhouseCoopers (PwC).

Other terms of the settlement will be included in the SIAC Tribunal’s award, which will be declared to relevant regulatory bodies upon receipt.

In May, Binay had indicated that the city government was in discussions with a new domestic partner for the project, which had submitted an unsolicited proposal.