SMC eyes majority stake in Caticlan airport

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC), through its wholly-owned subsidiary San Miguel Holdings Corp. (SMHC), has entered into an agreement to acquire a majority interest in a company that will undertake the expansion and upgrade of the airport at Caticlan, the gateway to the island-resort of Boracay.

SMHC has executed a share sale purchase agreement with the consortium of George Yang, Rafael Puno, Lino Barte and RPRP Ventures Management and Development Corp. under which the SMC unit will acquire a majority interest in Caticlan International Airport Development Corp. (CIADC).

“SMC is investing in infrastructure to help develop our country,” SMC president Ramon Ang told The STAR. Aside from the airport, SMC is also investing in tollroads (Tarlac-Pangasinan-La Union toll expressway and North Luzon East Expressway) and plans to go into railways, including MRT-7 and other similar projects in Cebu, Cagayan de Oro, Davao and Iloilo, and a possible bullet train project that will ply the Laoag-Manila-Bicol route.

Ang also said in an interview that they want to help spur tourism development, starting with Boracay and other attractions that would benefit from the development of an international airport in Caticlan.

CIADC holds the exclusive rights, obligations and privileges to finance, design, construct, operate and maintain the Caticlan Airport by virtue of the concession agreement dated June 22, 2009, with the government, through the Department of Transportation and Communications (DOTC) and the Civil Aviation Authority of the Philippines (CAAP).

The P2.507-billion build-operate-transfer (BOT) project awarded to CIADC involves three construction phases covering a total of seven years.

From 950 meters by 30 meters, the runway will be upgraded to 2,100 meters by 45 meters. The widening and lengthening of the runway will allow bigger aircraft such as the Airbus to bring in more passengers straight to Caticlan. At present, bigger aircraft of PAL Express and Cebu Pacific are allowed to land in Caticlan from Manila, subject to a condition that the planes may be rerouted to the bigger Kalibo airport, which is two hours by road, in case of changes of operating conditions at the Caticlan airport.

The CAAP earlier designated the Caticlan facility as a one-way airport, which means take-off should be towards the sea, and landing in the opposite direction. This shortened the portion of the airport runway that could be used despite its actual length. These changes were made to avoid incidents similar to Zest Air’s flight overshot on the runway of Caticlan airport in 2009.

PAL Express resumed its flights to Caticlan in December 2009 after the CAAP lifted its ban on the limited use of the Caticlan airport. Meanwhile, Cebu Pacific resumed Caticlan operations on March 1, 2010, seven months after suspending it on July 10, 2009 following the CAAP’s advice regarding the airport’s runway length and one-way runway rule.

Aside from runway expansion, the upgrade of the Caticlan Airport will include the addition of a second level to the terminal building, a fire station and the installation of fencing and navigational aids.