Funding issue on Naia upgrade
From the looks of it, the Philippines’ premier international gateway, Ninoy Aquino International Airport (Naia) would, for the third time, be up for privatization.
In a recent Senate hearing on the Jan. 1 shutdown of the country’s airspace, Transportation Secretary Jaime Bautista said President Marcos had approved Naia’s privatization.
That action was initially proposed during the administration of then President Benigno Aquino III using the public-private partnership (PPP) scheme.
Although the succeeding administration recognized the need to upgrade Naia’s facilities, it rejected the PPP arrangement because it believed it was graft-ridden and that the government had sufficient resources to undertake the improvement.
But as things turned out later, there were no funds available for that purpose. And the Duterte administration’s economic managers had to eat their words about the PPP when their rosy revenue forecasts and the expected grants and loans from China did not materialize.
In 2018, a group of business conglomerates dubbed as the “Naia consortium” submitted a proposal to bring the airport to a higher level of operational efficiency.
The negotiations on that offer dragged on for two years. In July 2020, when the COVID-19 pandemic was at its peak and global air travel was practically on a standstill, the plan was shelved.
It’s back to square one on the government’s aspiration to make Naia a reputable and reliable terminal for international and domestic travels.
Considering the expected gargantuan costs of airport rehabilitation, which would include the upgrading of navigational facilities, whatever group may be minded in taking on that task would have to have very deep pockets.
In light of other ongoing huge infrastructure projects that involve many of the country’s business conglomerates, the question is posed: Would any of them be interested in the rehabilitation of Naia?
Note that San Miguel Corp. (SMC) is in the middle of the construction of a P735-billion airport complex in Bulacan that is expected to be operational in 2027. Since that airport would compete with the Naia when completed, it is doubtful if SMC would express interest in the latter’s privatization.
The same goes for billionaire tycoon Lucio Tan who, in partnership with the Yuchengco Group and Cavitex Holdings Corp., have been awarded the contract to develop and operate the $11-billion Sangley Point International Airport in Cavite.
The Metro Pacific Group, which has investments in energy, water distribution and toll roads, is also a big question mark. Its top honcho, Manny Pangilinan, recently said his conglomerate had since moved on from the Naia rehabilitation project it earlier offered to undertake with the Naia consortium.
The Ayala conglomerate may not be inclined to participate in the upgrade since it had opted to get out of the operation of publicly used infrastructure projects when it sold in May its shareholdings in the company that operates the Muntinlupa–Cavite Expressway to the Villar group for P3.8 billion.
And in September last year, Aboitiz InfraCapital invested P9.5 billion in GMR Megawide Cebu Airport Corp, the developer and operator of the Mactan Cebu International Airport.
So, who are left among the country’s business conglomerates that can meet the financial and technical requirements for the rehabilitation of a 75-year-old airport?
Assuming the third attempt at privatization succeeds, whoever that “lucky” group has to, in its management of the airport, maybe deal with the Civil Aviation Authority of the Philippines, Bureau of Customs, Bureau of Immigration, Philippine National Police, Bureau of Plant Industry, Bureau of Animal Industry and the politicians who think Naia is a cash cow that can be milked for their personal advantage.
That would really be a pain in the neck and elsewhere. INQ
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