Clark International Airport lures business tycoons

Clark International Airport

Updated 6:34 p.m.

Big business groups are eyeing Clark International Airport in Pampanga province, an air gateway north of Manila that has seen a resurgence under the current administration.

Officials from Manuel V. Pangilinan-led Metro Pacific Investments Corp. and the Gokongwei family’s JG Summit Holdings Inc. confirmed their interest, as did businessman Dennis Uy’s Chelsea Logistics Holdings Corp. and a venture between Megawide Construction Corp. and India’s GMR Infrastructure, which operate Cebu’s main air gateway.

The state-run Bases Conversion and Development Authority (BCDA) recently invited the private sector to participate in the P5.61 billion Clark Airport operations and maintenance (O&M) public-private partnership (PPP) concession.

The Clark Airport project is the first under the Duterte administration’s hybrid PPP scheme, which combines both government funding and private sector support for the O&M.

It is also the only airport project that has a clear place in the government’s so-called multi-airport strategy, which partly involves building new capacity before Manila’s Ninoy Aquino International Airport (Naia) reaches its limit, stalling future growth.

The government last December awarded a construction contract to Megawide-GMR to expand Clark Airport’s current capacity of four million passengers annually to 12 million passengers by 2020.

To boost Clark Airport’s viability, the Department of Transportation (DOTr) committed to finish a Japan-funded P316-billion railway line linking Manila and the Clark Freeport Zone before the term of President Rodrigo Duterte ends in 2022.

Metro Pacific, JG Summit and Megawide-GMR were among those that submitted unsolicited offers or joint venture deals to the government for the long-term development and operations of Clark Airport. The government rejected those offers, favoring the PPP approach instead.

An investment in Clark Airport, meanwhile, is strategic for Chelsea Logistics, whose affiliate is developing a nearby 177-hectare property into a new business district dubbed Clark Global City.

Chelsea Logistics CEO Chryss Alfonsus V. Damuy said on Wednesday the group would first review the terms of reference for the Clark Airport PPP.

Clark Airport, a former US Air Force base before it was turned over to the Philippine government in 1991, is located about 100 kilometers away from Manila.

During a visit to the country last November, International Air Transport Association director general Alexandre de Juniac described the distance between Clark and Manila as “too far” for airlines that see the capital district as their primary market.

Clark Airport would thus have to mainly rely on travelers from Central and Northern Luzon.

Industry players are also closely monitoring developments on San Miguel Corp.’s P700-billion proposal to build an “aerotropolis” in Bulakan, Bulacan province, located near the halfway point between Manila and Clark Airport.

Some believe Clark Airport and San Miguel’s planned Bulacan air gateway could serve similar markets.

“Any additional airport capacity is always a natural source of concern for any airport facility,” said one individual whose group is studying the Clark O&M PPP.

San Miguel’s airport project will be subject to a competitive bidding process if it meets certain conditions set by the National Economic and Development Authority.

Even as the private sector takes a closer look at Clark Airport’s viability, a state-led push to move traffic here and decongest Manila has led to a significant jump in volume in a relatively short span of time.

Darwin Cunanan, assistant vice president for strategic development and corporate management at Clark International Airport Corp., said last month that Clark Airport currently serves some 323 weekly domestic flights compared to seven flights in December 2016.

It saw local connections rise from one destination two years ago to the present 19. International routes include the Middle East, Japan, South Korea, Hong Kong and Singapore.

As part of its multi-airport strategy, the DOTr is currently reviewing an offer by seven conglomerates, including Metro Pacific and JG Summit, to upgrade and operate Naia.

The parties are negotiating a Naia concession period of around 15 years, Transportation secretary Arthur Tugade said last month.

Moreover, the provincial government of Cavite submitted last February a $9.3 billion offer to build a new international air hub on reclaimed land in Sangley Point. This project is envisioned to serve as a Naia alternative as early as 2022. /jpv

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