MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) and San Miguel Corp. (SMC) have agreed in principle to team up in a bid to undertake the construction of a new terminal at the Diosdado Macapagal International Airport (DMIA) in Clark, Pampanga.
This was revealed yesterday by MPIC chairman Manuel V. Pangilinan who said the final agreement may be reached soon.
MPIC and SMC will be part of a Filipino-Korean consortium which earlier offered to invest as much as $177 million (more than P8 billion) for the new passenger terminal.
Earlier, SMC president Ramon Ang told The STAR that they are still discussing the extent of their equity participation in the consortium.
The Philco Aero consortium, which is in negotiations with the Clark International Airport Corp. (CIAC) on a possible joint venture for the construction of the new DMIA terminal, is presently majority-controlled by Filipino firm Penson and Co. Its foreign partners include South Korea-based Posco Engineering and Construction Co., Samil PricewaterhouseCoopers and Korea Development Bank.
Philco Aero’s controlling shareholder Ricardo Penson earlier said his group has inked agreements that will pave the way for SMC to take a majority position in the consortium.
In an interview with The STAR, CIAC president Victor Jose Luciano revealed that as early as 2009, MPIC chairman Manuel Pangilinan visited Clark “where we gave him a presentation and he expressed interest to join, but wanted to be part of a consortium.”
“There was not much development from (Pangilinan) after the visit and then Philco Aero’s proposal was submitted and he expressed interest to join,” Luciano added.
CIAC’s chief executive also disclosed that Pangilinan is also interested in connecting the terminal to a rail system.
“If you look at what is happening wherein NAIA (Ninoy Aquino International Airport) is already nearing capacity and given its single runway, there is a need for a new international gateway,” he added.
CIAC has received two unsolicited proposals for the construction of a new second DMIA passenger terminal – from the Philco Aero group and the Malaysian consortium Bristeel Overseas Ventures (BOV).
However, Luciano said after evaluating the financial capacity of the two groups and the possible stream of revenues over the 30-year life of the project, the proposal of Philco Aero proved to be more superior.
Under the joint venture, the winning consortium will put up the capital while CIAC’s equity contribution will be in terms of property, rights, and its franchise as a public utility airport.
“But capital is not enough. We require those interested to have airport operation experience because we want to get the best practices (such as those of the Hong Kong, Korea and Singapore airports). The foreign partner will be the one offering this experience because aside from NAIA and Mactan, no one here can offer it,” he pointed out.
If the negotiations with the Philco Aero group succeeds, Luciano said they will stamp it as an original proposal and then prepare the terms of reference for a competitive challenge.
After spending a total of P1 billion (including the purchase of a radar worth around P500,000) in refurbishing and renovating the present DMIA terminal and constructing a second floor and connecting the two passenger loading bridges, CIAC saw the need for a bigger terminal if it wants to bring in the legacy and international carriers and entertained proposals to put up a new terminal under the joint-venture mode.
Luciano explained that the project that will be undertaken by the winning consortium will consist of a new passenger terminal with commercial facilities. “If you look at Heathrow, Changi and even Hong Kong, 60 percent of the revenues come from land use or non-aeronautical fees such as lease rentals and commercial spaces and the rest from landing, take-off and parking fees (aeronautical fees),” he said.
Once the new terminal is operational, he revealed that plans are to convert the old terminal into a domestic terminal or even a budget terminal.
DMIA currently has two runways but only one is being used. “But it is good for three runways,” he said.
Luciano added that plans for a third terminal will only come in once DMIA has been designated as an international gateway. “But this will depend on the infrastructure, policy, consultations, among others. NAIA currently accommodates around 24 million passengers but its capacity is maybe around 30 million. With our population at 95 million, plans to improve tourism, and the Philippines consisting of 7,100 islands, maybe we could have not just one, but two or three gateways,” he pointed out.
Philco Aero’s proposal will allow DMIA, which handled 750,000 passengers last year, to gradually increase passenger capacity from three million to seven million over a five-year period.