Makati-Taguig row derails P200-B subway project
The P200-billion Makati City Subway has run off the tracks after its contractor decided on Friday to finally drop out of the project because it was “no longer economically and operationally feasible” after the resolution of the territorial dispute between Makati and Taguig effectively removed half of the 10 stations from the underground line.
“Arbitration proceedings have thus been commenced with the Singapore International Arbitration Center to enable an impartial resolution of the joint venture agreement with the Makati City,” Philippine Infradev Holdings Inc. said in a disclosure to the Philippine Stock Exchange.
Makati Mayor Abigail Binay told the Inquirer last year that the Supreme Court’s 2023 ruling would cede five of the planned subway stations to the jurisdiction of Taguig.
Should the subway project proceed with a shorter alignment, she said it would not be economically viable because the passenger volume would be smaller than the originally estimated 700,000 daily.
Binay said that the city government was looking at potentially “reinventing” the project into another mass transport system because. But she indicated that involving Taguig would be problematic.
In its disclosure, Philippine Infradev said that some subway stations and a depot would fall within Taguig’s jurisdiction.
‘Embo’ transfer
The court had ruled to transfer 10 “embo” (enlisted men’s barrios) or barangays from Makati to Taguig, based on historical, documentary and testimonial evidence. These are Pembo, Comembo, Cembo, South Cembo, West Rembo, East Rembo, Pitogo, Rizal, Post Proper Northside and Post Proper Southside.
A schematic diagram of the semi-loop 11-kilometer subway line shows one of two terminals at the Ayala Avenue-Edsa intersection. From there, the line passes northwest under the Makati Central Business District, turning southeast at the Makati Fire Station and finally moving southward along the Pasig River to the other terminal near the Ospital ng Makati. The end-to-end trip was supposed to take only 15 minutes.
The April 2023 Supreme Court decision settled the territorial dispute in favor of Taguig. It reaffirmed its decision in September that year.
The stations that were affected are at the southern portion of the line. Philippine Infradev suspended construction activities shortly after the tribunal’s decision came down.
Impairment losses
In 2023, the company reported that it incurred impairment losses from the project amounting to P4.85 billion and P1.95 million in 2024.
The underground line, which was originally targeted for partial operation by 2025, was designed to cover areas that include Mile Long, Circuit Makati, Makati City Hall, Makati Bliss, intersection of Ortigas-Makati-BGC bridge, University of Makati and Ospital ng Makati.
The Ninoy Aquino International Airport (NAIA) was also proposed to be another station. It is only three kilometers away from Mile Long, another Makati commercial site close to the South Luzon Expressway.
The Makati City government had transferred ownership of a 7.9-hectare property in the city to Philippine Infradev in exchange for the issuance of preferred shares in the company.
Chinese companies
What will happen to the property and the 656.66 million preferred shares valued at P6.57 billion has not been disclosed by either the company or the city government.
Philippine Infradev leads a consortium that includes the Chinese companies Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Holdings Ltd. and China Harbour Engineering Company Ltd.
Makati City officials and representatives of the consortium held a drilling ceremony near the City Hall to kick off the project in December 2018.
Philippine Infradev received the notice of award for the construction and operation of the subway project from the Public-Private Partnership Selection Committee of the city government.
Notice to proceed
In 2021, the company awarded the $1.21-billion engineering, procurement and construction contract for the 8-km phase of the project to state-owned China Construction Second Engineering Bureau Co. Ltd., which claims to be the biggest construction company in the world.
Philippine Infradev incorporated Makati City Subway Inc. as a special corporate vehicle for the project in 2019.
Within the same year, the joint venture agreement with the local government was finalized.
The notice to proceed was issued on Feb. 18, 2020, with the target completion of construction within five years.
The company has already finished excavation and shoring works of the first phase of the underground walkway and concrete pouring of two mat foundations.
The other subway project
Another underground rail project, the 33-km Metro Manila Subway, is proceeding as planned.
It is designed to have 17 stations connecting Valenzuela City to Pasay City and is expected to carry more than 519,000 passengers daily.
The subway is expected to have begin partial operations—from Valenzuela City to North Ave., Quezon City—in 2028.
The project was reportedly 18.24 percent complete as of December 2024, nearly two years after tunnel works began in Valenzuela City in January 2023.
The idea of building a Metro Manila subway was first proposed in 1973 under the Urban Transport Study in the Manila Metropolitan Area.
