MANILA — A US$3.5-billion subway project in the Philippines' main financial hub is no longer feasible following an inter-city dispute, according to its developer on Friday.
Philippine Infradev Holdings Incorporated has initiated an arbitration to settle the shelved project, it said in a statement to the Philippine Stock Exchange. Its shares fell as much as 7.9% on Friday, after the bourse halted trading for an hour following its disclosure.
Infradev said the Philippines' Supreme Court has ruled that some of the subway's stations and depot do not belong to Makati City, the country’s main financial centre and the company’s joint venture partner. The high court has declared some communities that will be covered in the subway project to be part of Taguig City, a neighbouring business hub.
Continuing the deal with Makati City "was rendered no longer economically and operationally feasible," Infradev said.
Arbitration proceedings with the Singapore International Arbitration Centre have started and seek "to enable an impartial resolution of the joint venture agreement with the Makati City," it said.
In 2019, Makati City and Infradev signed a contract for the 10-kilometre underground railway project, with the local government contributing the land.