SAN Miguel Corp. will have to defer the construction of the Bulacan International Airport to a yet-to-be determined date, as the Department of Finance (DOF) has asked the Department of Transportation (DOTr) to clarify issues relating to government liabilities on the deal.
Ramon S. Ang, the company’s president, said Transportation Secretary Arthur P. Tugade received a letter from Finance Secretary Carlos G. Dominguez III, asking for clarification on the terms of the Bulacan airport contract.
“We are supposed to hold the groundbreaking this December, but they have another issue again. I just don’t want to talk about it because it was not addressed to us. The issues that they raised are the same ones that they raised before,” Ang said.
The diversified conglomerate wanted to break ground for the largest airport deal of the Duterte administration this month, after receiving the notice to proceed for the project months back.
“They told us to wait because of the issues. The groundbreaking is now delayed,” Ang lamented.
Tugade confirmed that the finance department sought a review of the deal that has already been signed by both the government and the private sector.
“It’s not even a major concern. They just want to clarify that the contract is in favor of the government. It’s an issue of wordings and interpretation. It includes Maga and a cap on our liability,” he said, referring to material and adverse government actions.
Tugade explained that the finance agency is concerned on government liabilities for the deal, hinting that his group would like to set the liability cap to 50 percent, mirroring the contract for the Clark International Airport.
“What they want is to have a formula like that so as to not make it infinite, the claim for liability and that is good for the government,” he said. “The liability issue is in relation to the performance and the deliverables it has nothing to do with borrowing.”
Ang’s group received the notice to proceed for the $15-billion Bulacan International Airport unsolicited proposal on September 18.
To be built on a 2,400-hectare property in Bulakan, Bulacan, just north of Metro Manila, the airport will have four runways, eight taxiways, and three passenger terminals. It also has provisions for future expansion to sport six runways and to accommodate 200 million passengers per year.
It is touted to help raise tourism levels to 30 million annually, generate over a million direct and indirect jobs, and contribute roughly P900 billion annually to the Philippine GDP by 2025.
Image credits: Image from San Miguel Corp.