Makati Mayor Highlights Last-Minute Settlement Agreement
Makati City Mayor Nancy Binay revealed that the previous city administration entered into a last-minute agreement worth P8.96 billion with the Makati subway contractor. This settlement agreement was authorized by the City Council and signed just days before the prior officials’ term ended.
Binay stressed that the City Council approved the settlement with Philippine InfraDev Holdings Inc. (PhilDev) on June 23, only seven days before the new administration took office on July 1. This last-minute deal obligates the city to pay the substantial amount within 90 days following the issuance of a consent award by the Singapore International Arbitration Center (SIAC).
Financial Risks and Project Impact
Failure to meet the deadline will trigger a $30 million penalty plus interest, raising serious concerns about the city’s financial stability. “The financial standing of our city will be in crisis once the SIAC orders the settlement agreement,” Binay said in Filipino.
Due to the cancellation of the Makati Subway Project, the city lacks the funds to pay the nearly P9 billion settlement, she added. The mayor warned that the signed resolution compromises the city’s finances and threatens ongoing projects. The City Budget Department confirmed there is no budget allocation for this amount in the 2025 budget.
Concerns Over Transparency and Legal Issues
Binay criticized the agreement for lacking public consultation, budget certification, and proper transition transparency. “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 be grossly disadvantageous to the city government and to the public,” she said.
To defend the city’s position, Binay ordered the law department to prepare documents for submission to the SIAC. She will also issue an executive order to establish a fact-finding committee tasked with investigating all Public-Private Partnership projects entered by the city government, ensuring transparency and accountability.
Background: Subway Project Challenges
The P200-billion subway project, launched in 2018, stalled amid the Covid-19 pandemic. Later, a Supreme Court decision in 2022 transferred jurisdiction of 10 barangays from Makati to Taguig, disrupting the subway’s planned 11-kilometer route. The project originally aimed to serve 700,000 daily commuters.
PhilDev previously declared that the subway project is no longer economically or operationally viable due to the jurisdictional changes affecting several stations and depots.
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