Delayed (again!) airport rehabilitation
Contrary to earlier expectations, the improvement of the Ninoy Aquino International Airport (Naia) may have to await the next administration.
Last week, the Manila International Airport Authority terminated discussions with a consortium of Filipino tycoons for the upgrading of Naia.
The P102-billion private-public partnership project, which was proposed in February 2018, was canceled after the government turned down the consortium’s request to renegotiate some of its terms to ensure its financial viability in light of the new coronavirus disease (COVID-19) pandemic.The restrictions on international travel caused by the pandemic forced the consortium to ask for a review of the underlying financial assumptions of the project.
Although the members of the consortium have solid or AAA credit standing in the domestic and international financial markets, the gloomy forecasts by financial analysts about international travel may discourage banks from extending credit to them for the project.
The tycoons cannot be faulted for their action because their financial responsibility to stockholders requires that they properly manage their investments, not lose their shirts.Bear in mind, the Naia modernization project is a business transaction, not a CSR, or an act of corporate social responsibility.
Neither can the government be criticized for turning down the consortium’s request because that would mean changing the terms of reference of the project without the prior clearance of the government offices involved in its conceptualization and approval.
A contrary action would expose the government officials concerned to possible complaints for violation of our antigraft laws.
In a spirit of bravado, Finance Secretary Carlos Dominguez III downplayed the cancellation of the agreement with the consortium by saying two other groups (without mentioning their names) have expressed interest in taking over the project.
So it’s back to square one on the rehabilitation of the country’s principal international gateway.
Considering the technical and financial intricacies of the project, it is doubtful if any of the supposed interested groups would be able to come up with a firm proposal and secure the required regulatory approvals within the remaining 23 months of the administration.Whoever that party may be would have to take into account in the preparation of its bid the same concerns raised by the consortium about the expected slowdown in international travel.
In addition, it has to make provisions for the competition that the $15-billion New Manila International Airport project of conglomerate San Miguel Corp. (SMC) in Bulacan poses.According to reports, SMC CEO Ramon Ang has met with the mayors of the towns that will be affected by the project to secure their cooperation and that the relocation of the affected households has commenced.If the Bulacan airport project is completed as planned, with four runways, eight taxiways and three passenger terminals capable of handling 100 million passengers every year, it could give Naia a run for its money.
Then there is the $10-billion international airport envisioned at Sangley Point, Cavite province, which is expected to break ground after the pandemic restrictions are lifted.
Unlike Naia, which is bounded at all sides by residential and commercial buildings, the proposed Bulacan and Cavite airports have ample room for expansion that efficient airport operations require.Under these circumstances, the government may, if it wants to get a private party to upgrade Naia, have no choice but substantially modify the terms of reference for its rehabilitation to reflect the reality of the times.
No company in its right sense would agree to take on a project that would not assure it of a regular stream of revenues during its agreed period.
Meantime, while the government is looking for the company that has the financial and technical gravitas to competently develop and manage an airport, international travelers have to endure Naia’s patchy facilities.
The much-touted “golden age of infrastructure” of the administration seemed to have turned to bronze. INQ
