Airport options
Starting infrastructure projects, especially those that require billions of pesos in capitalization, is a daunting task as the current government is now realizing. No amount of sloganeering and declarations of aspiration can significantly provide shortcuts.
When the Duterte government came into power, one of its first declarations was to stop public-private partnerships (PPPs) in favor of direct government funding, albeit assisted by official development assistance (ODA) funds.
It was argued that government could get plenty of ODAs at lower interest rates, which, in turn, would significantly bring down the cost of infrastructure projects. Unfortunately, while this logic holds some truth, it also ignores a few realities.
First and foremost of this is the fact that some infrastructure projects are better suited as PPPs because they will directly be paid for by the users and not by all tax payers who will not use the completed infrastructure.
Such is the case for those elevated tollways and expressways that directly charge users who have the capacity and inclination to pay for toll fees. Here, the government, and many tax-paying citizens, do not have to spend a single centavo of tax money.
PPPs, like those expressways, even bring in revenues for the government in terms of taxes committed in exchange for the concession. Overall, it sounds like a win-win solution, one that should not be discriminated on. ‘Aerotropolis’ in Bulacan
Realizing the potential contribution of PPPs, even indirectly to the government’s Build Build Build program, recent developments have seen a welcome rise in private sector interest in building infrastructure projects through unsolicited bids.
The big push is now in upgrading the Philippines’ major air gateway, the Ninoy Aquino International Airport (NAIA). There are three available options, all under consideration.
One year ago, the Department of Transportation (DoTr) received an unsolicited proposal, valued at P700 billion, for a new international “aerotropolis” in Bulacan to eventually replace the old, congested NAIA.
The project, submitted by San Miguel Corp., would involve a huge airport and city complex to be built on 2,500 hectares adjacent to the Manila Bay. It carried a 50-year concession conditionality under a build-operate-transfer scheme.
The airport will initially have two parallel runways, much better than what NAIA currently has, but can be expanded to six over time. NAIA has only two runways that intersect each other. A third runway in NAIA has been ruled out by experts as technically not feasible.
The initial capacity of the airport was set at 100 million passengers per year, more than double what NAIA now handles. A “new shoreline expressway” is included in the plan, which would bring travel from the Bulacan airport and the Entertainment City complex to just 30 minutes.
A team under the DoTr was assigned to review the proposal. Nothing much has been heard since – not a yes, nor a no. Augmenting NAIA through Clark
The second area of action involves the Clark International Airport, which the government wants to be developed as the country’s second major air gateway.
Bidding by a third party to operate and maintain the Clark International Airport is expected to be underway as soon as the President stamps his approval on the project. It will be the first hybrid PPP under Duterte’s Build Build Build campaign.
Earlier, the DoTr turned down an unsolicited proposal by JG Summit Holdings Inc. and Filinvest Development Corp., together with Changi International Airport, for a P839-billion long-term development plan for the Clark airport.
Apparently, the DoTr, together with the Bases Conversion and Development Authority (BCDA), wants to take a more
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