THE proposed airport modernization of the country’s three gateways will not be realized until after two years, at least with respect to the Ninoy Aquino International Airport (Naia) and Clark International Airport (CIA).
However, the P700-billion Bulacan Airport proposed by Ramon S. Ang, head of the conglomerate San Miguel Corp., remains in limbo due to certain constraints, even as Ang and company met with transportation officials recently on, among others, the “joint and solidary commitments” of the entities bankrolling the huge project.
One of the constraints arising at the Senate hearing is the objection of Finance Secretary Carlos G. Dominguez III, who wants San Miguel Holdings to agree to a “joint liability agreement” with its parent company, San Miguel Corp.
Dominguez wants to know why San Miguel Holdings’s equity is only P60 billion when the Bulacan Airport project’s total cost is estimated at more than P700 billion.
With a 70/30 arrangement, San Miguel’s equity should amount to about P200 billion, according to Transportation Undersecretary Ruben S. Reynoso Jr. Dominguez’s other concern, which he voiced during a Senate Hearing presided over by Public Services Committee Chief Sen. Grace Poe, is that he wants to protect the country’s investments of $40 billion in Clark. He added that the potential economic benefits of Clark’s 35,000-hectare area, which is owned by the government, would also be under threat.
With the Bulacan Airport only 65 kilometers away, these economic potentials are threatened, Dominguez said, by, among others, the possibility that the Bulacan airport’s traffic pattern would overlap Clark’s.
However, DOTr Secretary Arthur P. Tugade disagreed with Dominguez, pointing out the crying need for more airports with the main gateway the Naia already overfilled to capacity at 42 million passengers yearly.
He said Clark International Airport has only a maximum capacity of 8 million yearly passengers, and the combined total with the Naia is 50 million people.
Reynoso said the Naia could be hosting 65 million passengers yearly if it did not have constraints, such as being limited to only 40 landings and takeoffs per hour.
He said that, once upgraded, the Naia’s 40 events per hour could increase to 52 events per hour.
Consortium vs GMR Megawide
Without these improvements that GMR Megawide consortium promises to accomplish, the country’s main gateway is losing the income potential from handling15 million more passengers a year.
Reynoso said if Megawide is given the go-ahead to proceed with the upgrading and modernization of the Naia, “it would be able to attain 48 million passengers a year after two years and 65 million passengers in another two years.”
In March the Filipino-Indian group bidding to upgrade the Naia for P350 billion was alarmed over the move of a “super consortium” of seven of the Philippines’s largest conglomerates to “tweak” the unsolicited proposal it submitted to the government.
In a statement, GMR-Megawide criticized the Naia Consortium for allegedly “changing cornerstones” of their proposal.
“If it is the intent of the Naia Consortium to tweak their proposal, it should be properly revised and resubmitted to the government. It also follows that this resubmitted proposal should be evaluated after the GMR Megawide proposal,” it said in a statement.
Bulacan airport
On the other hand, once the Bulacan Airport becomes operational decades from now, it would be able to process 100 million passengers a year, with four parallel runways, Reynoso said.
He said once the proponent San Miguel is given the notice of award in Bulacan, it will be subjected to a Swiss challenge. “If their offer is not matched by the challenger, the proponent will be given the notice to proceed.”
The DOTr will “review, then call for the next round of negotiations to discuss whether or not their offer is acceptable, and they will have 180 days to prepare.”
Reynoso said they want to accelerate the Bulacan project, especially after the August 16 incident, when a Xiamen Airways plane, struggling to land during heavy rains, overshot the runway 24 at Naia, and got stuck in muddy land, forcing the airport’s closure for 36 hours.
The Bulacan project proponent said they will sit down with their lawyers and financiers and submit a revised concession agreement this week.
Reynoso said, “As soon as we receive that, we will review the documents, the terms of the Swiss challenge, the revised allocation matrix and then of course secure from them the joint and several liability agreement.”
San Miguel, he added, would be given 18 months “to borrow the remaining 70 percent of the equity, but during that time, they can already advance the 10 percent to start construction.”
He added that, by next year, they hope to get a clearer picture of their project. Nonetheless, Reynoso remains positive about the capability of the proponent, giving as example their Metro Rail Transit 7 project. “As soon as possible, they were able to secure final approval from the government, and without waiting for the final clause, they already started [construction of MRT 7].”
Problematic Sangley
On the other hand, he said the Sangley Airport proposal, being backed by the government of Cavite, also has many issues to contend with, one of them its being only 15 kilometers away from the Naia.
“Their proposed reclamation on Manila Bay would impact on the wetland preserve of Las Piñas and Parañaque, which is home to migratory birds,” Reynoso pointed out.
‘The more, the merrier’?
Poe, interviewed after presiding over Monday’s second hearing of the Senate Public Services Committee on the Xiamen airline, signaled support to fast-track operations of additional airports to facilitate passengers’ arrival and departures.
Poe pointed out, for instance, the proposed Bulacan international airport is expected to accommodate additional passengers and reduce crowding in existing terminals, but she quickly added: “This is no assurance there will be no flight delays, but at least it will be orderly.”
The senator indicated, however, the committee is also keen to ensure that government’s airport projects “should be viable.”
“Do we need another airport in Bulacan?” Poe asked Tugade, who replied, “the more the merrier.”
Tugade reported to Poe’s committee that, “subject to risk assessment,” the Department of Transportation, the National Economic Development Authority and the Department of Finance met with proponents of the project led by Ang, Chief Executive Officer of Top Frontier Investment Holdings Inc. and largest shareholder of San Miguel Corp.
Tugade said their meeting with the Bulacan airport proponent last Thursday tackled “the matrix, as well as joint and solidary commitments.”
This developed as Dominguez also informed the committee that the government is also keen to maximize public benefit from government assets at the former US Clark Airbase
in Pampanga.
“We would like Clark to be able to lease land because there is an airport nearby,” Dominguez told Poe’s committee, even as the panel was also informed that Clark’s value “will diminish” once the proposed San Miguel airport in Bulacan starts operations.
But even if Clark is fully utilized, Poe’s panel was informed “there is still a need for another airport.”
This prompted Poe to require airport project proponents to “submit timelines” to the committee at its next hearing.
Image credits: Alysa Salen