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$15-B Bulacan airport project faces delay

Tugade says DOJ reviewing issues raised by finance dep’t
/ 04:07 AM December 03, 2019

Conglomerate San Miguel Corp.’s (SMC) $15-billion plan to build an international airport in Bulacan province and alleviate air congestion in Manila, about 50 kilometers away, is facing delays.

The massive airport project, which was set to hold a ceremonial ground breaking this month after SMC won the notice to proceed on Sept. 18, is currently on hold pending a review of its terms by the Department of Justice (DOJ), Transportation Secretary Arthur Tugade said on Sunday.
Tugade said that even after the signing of the concession agreement with SMC three months ago, there were lingering issues that needed to be “clarified” by the Department of Finance.“It’s an issue of wording and interpretation,” Tugade said.

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He said the review by the DOJ covered provisions on material adverse government action (Maga) and caps on liabilities of the government.

The Maga clause deals with compensation to the concessionaire in cases where national government actions negatively affect the project.

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The wording of the Maga was a major cause of delay for a separate private sector offer to upgrade and expand capacity at Ninoy Aquino International Airport (Naia), which was approved by the board of the National Economic and Development Authority on Friday—almost two years since it was first submitted.“He is not making objections,” Tugade said, referring to Finance secretary Carlos Dominguez III. “He’s making sure what’s in the contract is favorable to the government.”

Dominguez last year publicly expressed reservations on SMC’s airport offer given its impact on the government’s investments in New Clark City, which is located near the Clark International Airport in Pampanga, about 55 km northwest of the Bulacan airport site.

“When the DOJ says it’s okay, then it’s a go,” said Tugade, adding that he hoped the groundbreaking would continue before the end of 2019.
SMC president Ramon Ang, however, said they were already behind schedule.

“The groundbreaking is delayed because it’s on hold,” Ang told reporters.

Despite a notice to proceed, Ang said they were advised by the Department of Transportation, as the implementing agency, to wait until the government had completed its review.

SMC’s project, dubbed New Manila International Airport, aims to solve congestion in Naia and provide a long-term solution to rising demand for air travel in the capital district and nearby provinces.

The New Manila International Airport was first proposed in 2016 and is expected to cover 2,400 hectares in Bulakan, Bulacan.SMC wanted to open the airport in five years with four runways, eight taxiways and three passenger terminals with an annual capacity of at least 100 million—three times the design capacity of Naia. SMC will control the airport over a 50-year concession period.The New Manila International Airport is potentially one of two new major air gateways in Luzon. The provincial government of Cavite also launched a tender for a $10-billion international hub in Sangley Point, Cavite.

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These two new airports will potentially add to a market currently being served by Naia and Clark International Airport. INQ

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