Dominguez prioritizes Clark City development over Bulacan airport

The Department of Finance (DOF) said that it will prioritize the viability of the government’s New Clark City in Tarlac over the proposed “aerotropolis” in Bulacan.

While developing a new international airport is also crucial for the country, Finance Secretary Carlos G. Dominguez III said that it should not compromise the future valuation of the government’s major development projects, like the $14billion New Clark City.

“Our priority is the Clark City development and we have put money in it. We have invested money, we started that, obviously that's our priority,” Dominguez told reporters in an interview at the DOF headquarters late Monday. “My job is to increase the government's assets value.”

“What were my concerns? Number one, how will it [Bulacan airport] affect the value of our project? Our assets? The nation's assets?” Dominguez asked.

On Monday, the finance chief raised concerns that the unsolicited proposal submitted by San Miguel Holdings Corp. (SMHC) to develop a 1735.6 billion international airport in Bulacan could have an impact on the real estate value of New Clark City.

The 9,450-hectare New Clark City is only 65 kilometers away from San Miguel’s proposed “aerotropolis” spanning 1,168 hectares with a city complex to be built at a 2,500-hectare area along Manila Bay in Bulakan, Bulacan.

Aside from its potential impact on New Clark City, Dominguez also has concerns on SMHC’s capacity to fund the country’s largest infrastructure project in history, citing the company’s capitalization only amounts P60 billion.

For this reason, the finance chief believes SMHC is “not qualified” to proceed with the project unless its parent firm, San Miguel Corp., entered into a joint and several liability agreement, which means the project will be fully financially backed by the diversified conglomerate.

A joint and several liability agreement refers to a deal in which two or more parties are held liable for the same act and are all held responsible for the payment of any restitution or damages.

Dominguez said that the DOF has suggested the signing of a joint and several liability agreement as early as February this year.

Following Dominguez’s comment on Monday, the parent San Miguel said in a statement that it is ready to back its subsidiary SMHC to build a new international airport in Bulacan.

Meanwhile, the finance chief said that the DOF has no zero state-guarantee policy for private sector-funded projects.

“I didn't say zero, but unreasonable demands for guarantees won't be accepted. We had so many PPPs [public private partnerships] we know what's good, we know what's bad. Certainly we'll follow what's good and we'll not follow what's bad. It depends on the circumstance,” he said.

Dominguez said that the DOF has to be “meticulous” in evaluating any proposals submitted by the private sector to protect the interest of the government against unwanted state-guarantees and contingent liabilities.