The government is preparing the Ninoy Aquino International Airport (Naia) for privatization in anticipation of a spike in passenger traffic in the coming years.
Transportation Undersecretary Rene K. Limcaoco said his agency is now in talks with the Public-Private Partnership (PPP) Center for the implementation of the plan, which would essentially entail the bidding for the operations and maintenance of one of Southeast Asia’s oldest existing airports.
“We are working with the PPP Center right now,” he replied, when asked if the agency is poised to privatize the Naia.
He added that the government is procuring a transaction advisor for development projects lined up for the Naia, which “include the augmentation of the airside and landside facilities to accommodate the expected rise in passenger traffic.”
In a study conducted by the Japan International Cooperation Agency (Jica), the consultants said the Naia could no longer accommodate another round of increases in
passenger traffic next year.
The Japanese agency said the Naia would “totally be capacity-saturated in 2015, and not be able to cater to the increasing passenger demand anymore.” The report noted that by next year, the airport was seen to handle 37.78 million passengers, the bulk of which, or 21.31 million would be domestic traffic, while the remaining 16.46 million would be international passengers.
Come 2040, the Naia’s passenger traffic would reach 101.49 million, the Jica study added.
As of end-2013, the airport’s annual passenger traffic reached 32.865 million from 31.877 million in 2012, representing a 3.1-percent rise in volume. The optimal capacity of the Naia’s three terminals is 30 million passengers per year, while its maximum capacity is at roughly 35 million passengers annually.
The situation prompted Jica to propose the construction of a new international gateway, which would require at least $10 billion in investments. It has recommended Sangley Point in Cavite as the most strategic location for the new airport.
But the construction of the proposed airport that will replace the aging and congested Naia would not start during the term of President Aquino. However, the current administration could jump-start the procurements process and implement it under his key infrastructure program, the Japanese consultants said.
In a separate discussion paper on the new airport, Jica said the Aquino administration could aid the next administration in constructing the much-needed infrastructure by fast- tracking the approvals process of the air hub project.
Jica is currently conducting a full- blast feasibility study with the aim of developing a master plan for the country’s aviation industry, specifically on the prospect of building an international gateway south of Manila.
The Japan-based consultancy firm noted that the current government could bid out the contract under the PPP Program to help fund the ambitious airport-development project.
Thus, the transportation agency should start getting the approval for the deal, including key nods from the National Economic and Development Authority (Neda) Investment Coordination Council and Cabinet Committee.
The Neda Board, chaired by the President himself, should also approve the terms of the contract should the government decide to implement the multibillion-dollar project under the flagship program of the Aquino administration.
The proposed airport could handle some 130 million passengers annually when fully developed. It will boast of four runways, which could handle 700,000 aircraft movements a year.
Preliminary construction of seawalls and access bridges and the reclamation of key areas should commence by 2017. The actual site development and the construction of the gateway and airport-related facilities should start by 2020.
It should be commercially
operational by 2025. By that time, the old Naia’s operations should be completely folded down, Jica said.
But the decision on the Naia’s closure still rests on the hands of the government. The state, then, “must formulate a concrete business plan for implementation of the new Naia on strategic PPP scheme.”
The government is also considering the development of a twin airport system where the Naia and Clark International Airport in Subic will be simultaneously rehabilitated.
Limcaoco stressed that the government plans to usher in the Philippines to the jet age through a P110-billion investment spread over the next five years to modernize the country’s aviation sector.
The bulk of the investment, he said, was earmarked for the expansion and modernization of key gateways. The government has set aside P53.47 billion for the cited venture.
“Our airport progress is obviously to expand and modernize our key international gateways, which are the Ninoy Aquino International Airport or Naia, Mactan-Cebu, Davao and Clark,” he explained.
Roughly P48.18 billion, he said, will be spent to improve key secondary air hubs, while P5.98 billion will be used to modernize the old airports to jet-capable facilities.
“We are also modernizing and converting into jet-capable our key secondary airports and key secondary tourism locations such as Puerto Princesa, Bohol and Busuanga, among others,” the transport official added.
Another P2 billion will be used for “other airport priorities.”
“A lot of our airports were built in the 1960s and have been built to accommodate turbo props and, as you know, the costs of operating a turbo prop is 50 percent higher than jets, which are obstacles to lower fares and a necessary precursor to an expanded aviation industry,” he said. “We are making sure that our airports are safe and capable also of accommodating A320 jets.”
The agency is set to launch next quarter the tenders of six airport deals under the government’s PPP Program.
The said deals involve the expansion and the modernization, as well as the operations and maintenance contracts of the following airports: New Bohol Airport (P11.71 billion); Puerto Princesa Airport (P10.27 billion); Davao Airport (P5.88 billion); Iloilo Airport (P4.03 billion); Bacolod Airport (P3.16 billion); and Laguindingan Airport (P2.26 billion).
These deals will be auctioned off in bundles.Since the program was launched four years ago, the transportation agency has awarded P84.12 billion worth of infrastructure deals, which include an airport, a railway system and a unified ticketing system. The transportation agency handles
a total of 27 PPP deals, roughly half of the almost 60 contracts included
in the pipeline, which costs some P600 billion in investments.