IT looks like the plan of San Miguel Corp. (SMC) to build a P700-billion airport project will have to wait a little longer.
The Investment Coordination Committee (ICC) of the National Economic and Development Authority (Neda) needs more time and is asking the conglomerate for its tack on how it will proceed with this big-ticket project.
I hope that this is just part of the government’s normal due diligence on unsolicited project tenders, as what Undersecretary Rolando G. Tungpalan says. Indecision could cause the project to be caught in a bureaucratic web. Such delays usually jack up the project cost.
That there is an urgent need for state-of-the-art airport is an understatement. The Ninoy Aquino International Airport (Naia) is currently on life-support system, practically on its deathbed. Plans to revive it jointly by the country’s biggest corporations are also still under “close scrutiny,” even as the country’s airport traffic is at saturation point.
While lawmakers are busy crafting ways on how to stay in power forever, the public suffers from utter government neglect. Traffic gridlock in Edsa has gotten to be nauseatingly choking, and Metro Rail Transit’s woes have turned for the worst. No worries though, Spox Harry L. Roque Jr. says, because President Duterte still enjoys public support based on latest surveys.
This present dispensation can ill afford to pass up SMC’s proposal. Under the build-operate-transfer (BOT) scheme, which this project is going to be undertaken, the government spends nothing. SMC puts up the funding, builds the airport, gets paid by operating it for 50 years and turns over the project to the government.
The risk that SMC faces for the unwanted delay is that competition may have been alerted to the huge investment return in building an airport in Bulacan, a place virtually unnoticed until SMC saw the province’s huge potential. Since BOT allows other bidders to make an offer for the project under the so-called Swiss Challenge, competition can map up its own proposal partly based on the feasibility study SMC has already diligently crafted and spent for.
Of course, SMC can always match the bid offer of the competition. Technically, it gets the project if it does. But it doesn’t always happen that way.
I’m reminded of a controversial project to rehabilitate the Caliraya, Botokan, Kalayaan (CBK) hydroelectric facilities in the late-1990s. Argentinean company Industrias Metallurgicas Perscarmona Sociedad Anonimo (Impsa) made an unsolicited bid to bring back the facilities to their original functioning state. The Lopez firm First Philippine Holdings Corp. made an offer higher than that of Impsa’s, the latter matched it, but still had to go through the wringer of a court battle before it finally got the project done.
The Impsa saga started during the term of former President Fidel V. Ramos and ended during former President Joseph E. Estrada. By then, the project cost had gone up to the detriment of the government. At that time, the BOT still had a sovereign guarantee clause, which mandated that the government must pay the excess power that Impsa was producing but which was not bought.
The P700-billion “aerotropolis” SMC is proposing spans 1,168 hectares, which excludes a city complex to be built on a 2,500-hectare site along Manila Bay in Bulakan town. It will have six parallel runways with an estimated primary yearly volume of 100 million passengers, or more than three times that of the Naia’s.
You can just imagine the positive economic impact the SMC project can have not only on Bulacan province but the entire country. Airports are a great economic stimulant. We’ve seen how they arouse and drive economic development worldwide.
Dr. John Kasarda and Greg Lindsay, who collaborated in their recent book Aerotropolis-The Way We Live Next, are two of the most preeminent scholars, authors and experts on airports, urbanization and the economic impact of airports.
Kasarda and Lindsay have documented that Class A office space in and around new airports often exceeds that of comparable space in the metropolitan cities they support, and that retail-shopping space returns revenues per square meter of floor space up to six times that of comparable malls in the nearby cities.
Airports produce jobs, inflate the tax base and excite the economy. The country’s leaders should realize that times have evolved; the economy has been altered. The sooner they understand the demographics and effects of urbanization, the better they could respond to the needs of the times.
There are now more prosperous families that can afford domestic and international air travel. With the country’s craving for greater contribution of tourism to the country’s coffers, where-oh-where will these planes land?
For comments and suggestions, e-mail me at mvala.v@gmail.com.
2 comments
Kala ko ba build build build. Sana madesisyunan na kaagad ng gobyerno na mabigyan ng go signal to construct ang project na ito. Isa ito sa pinakamagandang project na gagawin.
Sana nga at hindi matulad sa MRT7 at Caticlan Airport pagdating sa design.