Makati Mayor Reveals Last-Minute Settlement Agreement
Makati City Mayor Nancy Binay recently disclosed that the previous city administration entered into a last-minute agreement worth P8.96 billion with the Makati subway contractor. This settlement deal was finalized just days before the previous officials’ term ended, raising concerns about its transparency and financial impact.
According to local leaders, the City Council authorized the former administration to sign the settlement agreement with Philippine InfraDev Holdings Inc. (PhilDev). The agreement was signed on June 23, only seven days before the transition to the new government on July 1. Mayor Binay emphasized that this last-minute settlement deal will obligate the current administration to pay the large sum within 90 days after the Singapore International Arbitration Centre (SIAC) issues a consent award.
Financial Risks and Penalties Loom
Mayor Binay warned that failure to meet the payment deadline could result in a $30 million penalty plus interest. “The financial standing of our city will be in crisis once the SIAC orders the settlement agreement,” she said in Filipino. She also pointed out that due to the cancellation of the Makati Subway Project, the city lacks the funds to pay the nearly P9 billion settlement.
The mayor further explained that the signed resolution compromises the city’s current financial health and threatens ongoing projects. The City Budget Department certified on July 3 that no budget appropriation exists for this settlement in the 2025 budget. This raises serious concerns about the city’s ability to meet such a massive financial obligation without affecting essential services and development initiatives.
Concerns Over Lack of Transparency
Mayor Binay criticized the settlement process for lacking public consultation, budget certification, and proper transition transparency. She stressed, “We will not let these midnight deals and legally-flawed settlement agreements that were easily passed and the payment of P8.96 billion for the settlement of Makati Subway Project will be grossly disadvantageous to the city government and to the public.”
In response, she has tasked the city’s legal department to prepare necessary documents to assert the city government’s position before the SIAC. Additionally, she plans to issue an executive order forming a fact-finding committee to investigate all Public-Private Partnership projects initiated by the city. This move aims to ensure transparency and protect the interests of Makati residents.
Background: Makati Subway Project Halted
The P200-billion Makati Subway Project was launched in 2018 and was designed to serve 700,000 commuters daily across an 11-kilometer route. However, the project faced delays due to the COVID-19 pandemic and was ultimately stalled following a 2022 Supreme Court ruling. The ruling transferred jurisdiction over 10 barangays from Makati to Taguig City, affecting the subway’s planned alignment and rendering the project no longer feasible.
PhilDev, the contractor, previously stated that the subway project is now “no longer economically and operationally feasible” due to the jurisdictional changes declared by the court. This development has complicated efforts to move forward with the subway and added to the financial strain on Makati City.
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