The Makati City government and Philippine Infradev Holdings Inc. on Tuesday inked the joint venture agreement for the $3.5 billion underground railway project.

Makati Mayor Abby Binay and Philippine Infradev Holdings Inc. chair Ren Jinhua signed the agreement for the construction of the subway, the Makati City Hall said in a statement Tuesday.

Dubbed as "the biggest PPP ( public private partnership) project for a local government unit," the ten kilometer intra-city subway system will have ten air-conditioned underground island stations. The project will have six car trains which can accommodate 200 persons per train and up to 700,000 passengers per day.

According to the signed agreement, the proposed intra-city underground subway will connect major establishments in Makati City such as the city's central business district located at the corner of Ayala and Sen. Gil Puyat Avenues, Circuit City, Makati City Hall, University of Makati, Ospital ng Makati, and other key points.

Philippine Infradev Holdings submitted a $350 million performance bond to the government of Makati.

According to the company's disclosure to the Philippine Stock Exchange, it was a condition for signing of the joint venture agreement.

Also included in the agreement is that Makati is only to contribute government-owned land for the project.

The Makati undergroud subway will connect to the proposed Metro Manila Mega Subway project, Metro Rail Transit (MRT) stations, and the Pasig River ferry. Cristina Eloisa Baclig/DMS