Corporate Securities Info

Privatized public services

/ 07:47 AM November 08, 2013

After years of government neglect and apathy, Manila North Harbor, the major seaport that links Metro Manila to the Visayas and Mindanao, has taken a new look that the country can be proud of. Early this month, Manila North Harbour Port Inc. (MNHPI), a joint venture of Harbour Center Port Holdings Inc. and San Miguel Corp., inaugurated the North Port Passenger Terminal Complex, a world-class terminal that can accommodate three million passengers a year.

The complex boasts of an air-conditioned waiting room that can sit 1,875 people and special areas for senior citizens, pregnant women and people with special needs. In addition, it has play and breast-feeding rooms, a prayer room, dining facilities and a VIP lounge. Michael Romero, the chair of MNHPI, described the terminal as “the most modern and one of the best facilities not only in the Philippines but in the whole of Southeast Asia.”


Some of the passengers who were interviewed on television about the new terminal gushed over its “high class, parang nasa abroad” facilities and the ease by which they were able to check-in, undergo security inspection and make it to the boarding gates. It is a far cry from the North Harbor of old where passengers had to contend with muddy streets, clogged passageways, unwholesome elements, and other problems characteristic of crime-ridden areas.



Like all projects that involve dealing with the government, the road to the P200-million passenger terminal was marked by controversy, intrigues and attempts by unscrupulous politicians to make money from the transaction. After going through a contentious bidding process, the contract to upgrade the North Harbor facilities was, in June 2012, awarded to MNHPI.

The project met strong opposition from stevedores and other people who thrived in a chaotic port arrangement. They felt their livelihood would be adversely affected by the construction of a modern passenger terminal. Fortunately, all the kinks that threatened to delay the completion of the project were ironed out and the new terminal finally came into operation.

Barring any untoward incident with the government, the public can reasonably expect efficient port service during the life of the 25-year operation and management agreement with MNHPI. With its vast financial resources and unhampered by cumbersome government procurement rules, including interference by politicians in the management process, MNHPI can maintain the terminal in accordance with modern maritime standards.

The funds that the government would have otherwise spent to operate decrepit Manila North Harbor can be put to better use in other equally important government projects.

Air services

The Manila North Harbor experience is being replicated in another critical aspect of public transportation which for years has defied workable solution— airport services. At present, the government operates and maintains 85 airports, of which 10 are considered international in character, i.e., capable of handling incoming and outgoing foreign flights, 34 are qualified for regular domestic flights, and 41 are community airports.

It is common knowledge that the country’s principal international airport, the Ninoy Aquino International Airport, has gained notoriety for the poor quality of its facilities and services. The other reputedly international class airports in other parts of the country, including those used for regular domestic flights, are no different from Naia. The airport terminal fees collected in these airports go straight to the national coffers, rather than for their maintenance and improvement.


Unlike foreign airports, the local air terminals have to fall in line, together with other government offices, for government funds to sustain their operation. As a result, local airline companies are often obliged to give “financial assistance” to the airports they operate in to ensure the smooth operation of their airplanes.


If plans do not miscarry, the Mactan-Cebu International Airport, the country’s second busiest airport, would be the first airport in the country to be placed under private management. Envisioned to be a public-private partnership venture, seven companies have pre-qualified to bid for the contract to improve, operate and maintain the said airport for 25 years.

The Department of Transportation and Communications has announced that the deadline for submission of bids is Nov. 15. Hopefully, this project will not go the way of other DOTC plans that have remained at the drawing board for years for one reason or another, or be marred by complaints of rigging or under-the-table deals.

The track record of foreign international airports, e.g., London’s Heathrow, Pearson International in Canada, Chek Lap Kok in Hong Kong and Changi International in Singapore, has shown that private management can do a better job than government in the operation and management of this vital transportation cog. Like in the Manila North Harbor, some quarters have expressed opposition to the planned privatization of airports.

They argue that airports are vital to national security so their operation and management should remain in government hands, and not entrusted to private entities whose principal objective is to earn profits. This “national security” argument has an uncanny way of surfacing in big league projects. Scratch its surface and you will see the faces of people (read: politicians) who want to make money out of bureaucratic inefficiency in the guise of nationalism.

For comments, send your e-mail to [email protected]

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TAGS: airports, Manila North Harbor, North Port Passenger Terminal, Philippines, Privatization, seaport
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