While it is better to build a new international gateway than to privately develop the “space-constrained” Ninoy Aquino International Airport (Naia), an aviation think tank believes the old airport may still be improved, even as Filipinos wait for the completion of a new facility a decade or so from now.
In a recently published report, the Center for Asia Pacific Aviation (Capa) said the Philippine government has to make key airport decisions in 2017, as spending billions of pesos to develop a facility with no room for expansion would only be wasteful.
“A new airport for Manila is required, but the reality is it could take a decade before the new airport is opened. In the meantime, the government has an opportunity to improve service levels further and increase capacity,” the research agency said.
It recommended the government to adopt a single runway system, while expanding all four Naia terminals. The government should also carefully review the terms of the project, which was placed under the Public-Private Partnership (PPP) Program.
“A privatization can be considered, but the Philippine government should be careful and only proceed with the PPP scheme if it can be ensured that the new owners will make the appropriate investments without significantly raising the costs for airlines or passengers,” Capa said.
Currently, the government is in the process of finalizing the terms for the P75-billion contract to redevelop the Naia, a deal under the PPP Program with a concession period of about 15 to 20 years. Bidding is slated for the second half of 2017.
With these initial terms, Capa said it is not confident that the private operator will complete all the needed upgrade. Should it do so, it could opt to “raise charges significantly in order to recoup the investment quickly.”
Extending the concession period to 25 years may the best solution, as it could provide the right mix of benefits for all stakeholders, it said.
But, a longer concession at the Naia could impact investor appetite in the new airport project.
“The Philippines may ultimately be best to retain ownership in the Naia and invest in upgrades under the current structure, while proceeding with a PPP scheme for the new airport,” it said.
Two groups has since proposed to build a new airport to replace Naia: San Miguel Corp. and All-Asia Resources and Reclamation Corp.
05 February 2017
By Lorenz S. Marasigan