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By: Marvin Germo | June 3, 2019

IRC Is Building Over 6-M SQM Property

It has been disclosed by the Philippine Infradev Holdings, Inc. (IRC) that it is planning to coordinate with property companies in order to build projects that would be an adjunct to the in-progress Makati Subway. According to the firm, they are going to construct an estimated 6.4 million SQM of properties within the next 15 years since each of the subway stations would account to 5,000 SQM and are leasable areas. The firm believes that these projects will add up to the value of the firm and will help them to earn more as the subway’s operation is not expected to profit high enough for the company. Let’s take a look at the significant points of this discussion.

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The Subway’s Profit Will Only Cover OPEX

The firm said the profit that would be generated from the subway alone will not earn profits and in fact, the fare revenue can only cover its operating expenses (OPEX) now that the fare will only be about P50, lower compared to the P200 as planned. The firm will not only incur the operating expenses, of course. The depreciation and interest expenses are expected to be higher than their operating expenses and will come from non-fare revenue. It is according to its financial model that the firm is going to spend more on depreciation and interest expenses and it would end up as a loss if non-fare revenue would not be focused on. It seems like complementary projects are indeed needed.

Solar Energy For Daytime Consumption

Apart from property developments, IRC will also try to offer solar energy in Makati and near areas to subway for daytime consumption. Greenergy Holdings, Inc., the other firm of IRC’s CEO Mr. Tiu, will expect a great benefit from the subway since it can offer solar construction materials to the companies involved in the making. The demand for solar energy will be higher especially in subway stations and buildings around it if they want to adopt solar energy. To add, Greenergy has coordinated with Hanergy, a Chinese renewable energy firm, to help them supply the materials. With this, do you think solar energy will be a hit in the next years? Is the developing subway station going to trigger the need to adapt to solar energy usage?

Developing Makati Subway

The Makati Subway will compose of 10 underground stations linked to different destinations in the city. It will have at least 30 doors, which can be accessed from and to its stations. Costing over $3.7 billion, the subway can accommodate up to 700,000 passengers every day. IRC has been doing the soil test for the subway project since last year and as of this writing, it is expected to be completed within the next 30 to 45 days. Upon completing the soil test, another 6 to 8 months are needed to purchase the first tunnel boring machine. With the given timeline, the project can start by the end of this year to be finished by 2025 as planned.

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