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[OPINION] Is Bulacan airport a goner?

DEMAND AND SUPPLY – Boo Chanco (The Philippine Star) – February 19, 2020 – 12:00am

I just checked with San Miguel the status of their airport project in Bulacan… when groundbreaking will be. Their reply: “No schedule yet, sir. But DOTr said within the year.”

Ano daw? Within the year? February pa lang. Ibig sabihin �?wag na kayong umasa. Di nyo ba ma-gets?

To be fair with DOTr, it is out of their hands. It is DOF’s call. The fact that DOF recalled the signed contract days before groundbreaking means wala na yan.

They have reviewed that contract for a few years now to remove potential “onerous” terms. They know they are not likely to find any more of that. San Miguel’s Ramon Ang accepted all of their demands.

Finance Secretary Sonny Dominguez is determined to stop the project, supposedly to protect the viability of the Clark International Airport. Sec. Sonny warned Duterte in a last minute confidential memo the Bulacan airport would become a white elephant.

The pretext of doing another review is just to wear out Mr Ang. After all, every day of delay means more money going to creditors to pay for commitment fees and for nothing.

Sayang. It is a good plan. No government guarantees unlike the projects of a Duterte crony who is likely to get PhilGuaranrtee, a GFI, to guarantee 90 per cent of some loans private banks are giving him.

Maybe, Mr Ang should start thinking of a Plan B, unless he can convince Duterte to give him a go signal on the airport. Only Duterte can save his airport project now. And because the delay means the airport can’t even be partially opened before 2022, the urgency is gone.

Maybe, Mr Ang’s mother can heave a sigh of relief. Ramon said she had urged him to give up the project because it is causing him so much anxiety and putting so much risk on his personal wealth. But Ramon is convinced the country needs that airport and he is determined to build it.

Perhaps, for the sake of San Miguel shareholders, Ramon should start thinking of initiating development of some areas in the airport complex into an industrial park, leaving enough space for the airport just in case government changes its mind. That part of Bulacan, so near Metro Manila, can use a lot more economic activity.

But it is sad that Duterte is likely to end his term without being able to have a good alternative to NAIA or even improving it.

True, they approved a project for expanding Sangley, but that is not as shovel ready as San Miguel’s project. Also, the Chinese partner doesn’t have a good record and had in fact been banned from bidding World Bank funded projects.

Dr. Epictetus Patalinghug, in his paper on Build Build Build which I wrote about last week, also had good observations on how government has handled private sector proposals to build airports. Here is the portion of his paper that space limits forced me to cut last week.

On unsolicited private-public partnership (PPP) airport projects, “the biggest is SMC’s New Manila International Airport in Bulacan which was approved by the NEDA Board on Dec. 21, 2018, and is now undergoing the Swiss challenge.”

(Update: The Swiss Challenge had been done, contract signed, notice to proceed given and date for groundbreaking set. But DOF recalled approval of contract and it is now in limbo).

“This project proposes to build four runways, modern terminal buildings, seaport and industrial zone accommodating 100 million passengers per year in a partially reclaimed 2,500 hectares of land.

“However, SMC’s realistic plan is to build in the early phase two parallel runways and a terminal building that can accommodate 35 million passengers annually, which is below NAIA’s actual traffic of 45 million passengers annually. (San Miguel hopes the two runways will ease congestion with faster take offs and landings).

“At the same time, there is an existing proposal to expand and operate NAIA as well as a separate proposal to develop the Sangley Airport. DOTr calls it a multiairport free competition policy. But in governance perspective, this is simply a classic case of sheer lack of transport planning capacity of the bureaucracy.

“The NAIA Redevelopment Project proposed by the seven taipans has not yet hurdled the NEDA Board’s approval. (The proposal was sent back to proponents to comply with Clark airport terms to which proponents agreed. The ball is now in government’s court).

“The Sangley Point International Airport has two  proponents, the Cavite Provincial Government and the All Asia Resources and Reclamation Corporation. DOTr has given the LGU proponent preference over the private proponent, despite inability of the former to firm up its financing plan within the period imposed by DOTr.

“Complicating this PPP status is the current DOTr’s P486 million project to rehabilitate Sangley airport so that it can accommodate private jets and small planes delivering fresh marine products by November 2019. (This was inaugurated last Sunday by Duterte. Cebu Pacific will use it for domestic cargo flights. Not clear who else will use it other than the fish flights.)

“The common pattern among these unsolicited PPP airport projects is that getting the original proponent status (OPS) from CAAP/DOTr is much easier than getting the final approval from the NEDA Board, which is a major requirement before undergoing the Swiss challenge prelude to actual upgrade, operation, and maintenance of concerned airports…”

The Clark airport terminal project is the only airport project that will be delivered on time. Credits to Megawide which constructed it and most specially to Vince Dizon of BCDA who managed a smooth bidding process and turn-key at that.

Management of Clark asirport will be done by a consortium that includes Singapore’s Changi Airport. Hopefully, Clark can relieve congestion at NAIA. But the train connection won’t be there before Duterte’s term expires.

There is no excuse for lousy airports. Mactan Airport Terminal 2, with its timber arches, won in the World Architecture Award’s “Completed Buildings-Transport” category, beating Jewel Changi. Filipinos can build and run world class airports, if our officials will let them.