The private sector has offered to step in and fix the congestion problems at the country’s main gateway, with two groups proposing to shoulder billions of pesos to redevelop, modernize and expand the Philippines’s main air hub.
Unfortunately, the two proposals are not enough to actually remedy the issues hounding the Ninoy Aquino International Airport (Naia), at least according to Avelino L. Zapanta, a known Filipino commercial-aviation expert and university professor.
For him, the proposal of the Naia Consortium—a group of seven of the largest Filipino conglomerates—is not viable, while the proposal of Megawide Construction Corp. and its Indian partner GMR Infrastructures Ltd. is a bit lacking.
“Neither is better than the other. The first is near impossible, and the second is insufficient, like a band-aid measure,” Zapanta told the BusinessMirror.
Naia Consortium’s P350-billion proposal involves expanding and interconnecting the existing terminals of the Naia, upgrading airside facilities and the development of commercial facilities.
Divided into two phases, the group’s proposal aims to increase the capacity of the Naia to about 100 million passengers per year. It also plans to construct a people mover that will link the Naia’s terminals to existing transport systems in Metro Manila.
Actual work will take 24 more months for the first wave of immediate expansion. Further expansions are planned to meet projected passenger demand moving forward. More expansion will follow to meet the expected growth in tourism, business and the economy. In 2017 the four Naia terminals, designed to handle only 31 million, accommodated 42 million.
The offer carries a concession period of 35 years.
On the other hand, Megawide’s offer involves a more affordable $3-billion price tag with a shorter concession period of 18 years.
The multibillion-dollar offer is divided into several phases, of which the first six years of the operations would focus on the expansion of the existing terminals, the optimization of the current runways and the capacity expansion of the whole airport complex.
Immediately upon takeover, the group proposes to construct full-length parallel taxiways for both runways, an additional rapid-exit taxiway for the primary runway, the extension of a second runway and the provision of maximum aircraft stands.
These solutions will increase airfield capacity to 950 to 1000 aircraft movements per day, a 35-percent increase from the current 730 aircraft movements daily.
Within the first two years, the group will rehabilitate and expand the existing terminals, which will roughly double the space and result in over 700,000 square meters of terminal area.
By that time, the airport will be able to handle as much as 72 million passengers annually, a huge jump from the current 30-million annual passenger capacity.
But these plans already have constraints even before they could take off.
“To drive away the subdivision dwellers will take forever. No magical runway architecture for the Naia would increase runway capacity to meaningful level,” Zapanta explained, noting the lack of available land for the expansion plans, and the amount of time to build a new runway.
The Naia has reached its peak, handling 42 million passengers last year, way above its maximum capacity of 35 million passengers annually. This year the throughput is expected at 44 million.
Loggerheads
Naia Consortium Spokesman Jose Emmanuel F. Reverente said his group is open to tweaking the group’s original proposal, including the concession period that it earlier proposed, just to win the contract.
Megawide Spokesman Louie B. Ferrer then hit the rival by saying that, once submitted, an unsolicited proposal should be evaluated as it is.
“We were quite alarmed to hear the statements of the Naia Consortium about their intent to ‘tweak’ their submitted proposal for the rehabilitation of the Naia. Their suggested tweaks involve changing cornerstones of their proposal. This kind of tweaking to the proposal after submission is the same as changing its terms,” he said.
Should the government allow this, Ferrer said it will put to question the integrity of the process. “We are very much concerned that this tweaking of proposals after they have been submitted and deemed complete will put into question the integrity of the process for evaluation of all unsolicited proposals.”
Two weeks ago Reverente announced that the government has sent the group a letter relating to the “completeness” of its proposal.
“We encourage the Naia Consortium to commit to the proposal that they have submitted. It will now be up to the government to evaluate and decide which proposal best serves the needs of its people,” Ferrer said.
Reverente noted the Naia Consortium will faithfully follow the permitting and approval process for its unsolicited proposal to upgrade and expand the airport.
“The seven Filipino conglomerates comprising the Naia Consortium stand on uncompromising legal compliance for the approval of its proposal,” he said.
Citing the build-operate-transfer law’s rules, Reverente said the iterations on the proposal can be made when the negotiations between the proponent and the
government start.
“For us, our proposal provides the short- medium- and long-term solutions to the Naia’s problems. However, we are flexible and can adjust to what the government wants. Otherwise, we can proceed to deliver on our promise as soon as we are cleared for takeoff,” he said.
He added the country urgently needs a “proper national gateway now and asked all parties to help instead of impede the process to move forward so the country, the Filipino flyers and the foreign tourists and investors will have finally a proper welcome and send-off venue.”
“These seven conglomerates set aside their individual competitive spirit for country. We ask others to do the same or at least let the proper process take its course before raising questions that are based on speculation,” he said.
Due to their nature, unsolicited proposals are required under law to go through several approvals processes, including a review from the implementing agency and an evaluation from the several bodies of the National Economic and Development Authority (Neda).
Under current rules, unsolicited proposals are also required to undergo a Swiss challenge, which essentially allows other groups to outbid the original proponent of the project.
The original proponent, however, has the option to submit a counteroffer to win the challenge.
The winner of the challenge will be determined after the Neda Board, currently chaired by President Duterte, evaluates the challenger’s offer, and the original proponent’s counteroffer.
Hence, the process could go for as quick as six months to over a year, and as long as almost a decade, as in some cases in the past.
Clark is still the way to go
But for Zapanta, the best way to go is the further development of Clark International Airport, and implement a twin-airport strategy.
“The dual gateways [strategy] is the way to go. Clark is the future, with three expressways covering three connecting catchment areas,” he said. Zapanta has been advocating for the twin-airport strategy for years now. It involves the redevelopment and the rationalization of the country’s main gateway and the modernization and expansion of Clark as a modular hub.
Currently, the airport is being developed to have a second terminal. Megawide and partner GMR won the bidding for the contract a few months ago.
The project involves design, construction, testing and commissioning of new terminal with a capacity of 8 million passengers per annum. The consortium will construct the integrated terminal along with specified landside facilities, such as car parks.
“After the second terminal, which is currently under construction, we have to push for the construction of a third terminal, and a third runway,” Zapanta said. “The speed rail connection may follow or be simultaneously tackled.”
The railway connection to Manila is one of the issues that industry players cited three years ago, when the BusinessMirror wrote a special report on the pros and cons of the air hub in the north.
Image credits: CNN Philippines