SM group eyes Mactan airport property

CEBU CITY—Taipan Henry Sy has offered to buy the 300-hectare property in Lapu-Lapu City where the present Mactan Cebu International Airport  (MCIA) is located.

Hans T. Sy, SM Prime Holdings Inc. president, expressed the tycoon’s interest in a Nov. 3, 2011, letter to Paul Villarete, MCIA general manager, offering to purchase the property should the plan to relocate the airport push through.

“We heard that among the options being considered by the Mactan Cebu International Airport Authority (MCIAA) is the possible privatization/sale of the MCIA’s current location,” he said in the two-page letter.

“In this regard, we are willing to discuss the terms of our possible participation in the disposition of the subject property as well as look into other fund-raising options being considered by MCIAA at your most convenient time,” he added.

Sy pointed out that SM’s proposal would help the MCIAA raise the necessary funds to build a bigger airport in nearby Cordova town, Cebu.

“SM’s proposed development on the privatized property will provide Mactan as well as the surrounding communities with convenient access to a world-class and modern commercial and mixed-use complex, which stands to create significant economic activity, not to mention thousands of employment opportunities within the region,” said Sy.

Villarete said the proposal of Sy has been referred to the committee on planning and development of the MCIAA Board for further study.

He said that while Sy did not indicate how much SM was willing to purchase the property, the 300-hectare lot had an assessed value of P6 billion.

The market value would be at least five times more of the assessed value, he added.

Sources said that Sy’s offer should at least match the amount that would be spent to construct a new airport, runway and the needed infrastructure. These include the reclamation of the property where the airport would be built on as well as the access roads leading the facility.

The MCIAA, a government-run corporation established in 1990, owns the 797-hectare property in Lapu-Lapu City where the MCIA is located.

From January to September this year, the MCIA served 3,490 domestic and 3,467 outgoing flights.

During the same period, the airport’s passenger traffic reached 3.56 million for domestic and 1.08 million for international travel. The total passenger traffic of 4.65 million was a 16-percent increase from 4.02 million in the same period last year.

MCIA’s passenger traffic has been rising over the past 20 years at an annual average of 19 percent for international and 7 percent for domestic flights.

Its gross operating revenues in 2010 reached P1.23 billion, up 12 percent from P1.1 billion in 2009.

Due to the heavy passenger traffic, the final report of the MCIAA master plan recommended the construction of a new passenger terminal building costing around $180.7 million under a public-private partnership (PPP) scheme.

The report centered on the development of the airport at the present location when it was presented by the Korea International Cooperation Agency (Koica) in a forum last July.

During the same forum, Mayor Adelino Sitoy of Cordova, an adjacent municipality, suggested that the airport be transferred to a proposed reclamation project of his town.