SMC, MPIC set to discuss terms in Clark project

MANILA, Philippines - Two of the country’s biggest conglomerates will jointly undertake a feasibility study to determine the extent of their participation in the $177 million project to construct a second terminal at the Diosdado Macapagal International Airport in Clark, Pampanga.

Metro Pacific Investments Corp. (MPIC) and San Miguel Corp. (SMC) have agreed in principle to team up for the Terminal 2 project of DMIA as part of a consortium that will enter into a joint venture with Clark International Airport Corp. (CIAC) for the project.

 “Both parties (MPIC and SMC) will jointly undertake a feasibility study of the project and explore the terms and conditions which will be mutually acceptable to MPIC and SMC,” MPIC said in a statement.

For his part, SMC president Ramon Ang confirmed to The STAR in a text message that they have agreed to partner with MPIC for the Clark project. But he said the extent of participation of SMC and MPIC are still being discussed.

MPIC chairman Manuel V. Pangilinan, meanwhile, said a 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 at DMIA.

The Philco Aero consortium, which is currently in negotiations with CIAC on a possible joint venture for the construction of the new DMIA terminal, is at present majority-controlled by Filipino firm Penson and Co. Its foreign partners include South Korea-based Posco Engineering and Construction Co., Samil PricewaterhouseCooper 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.

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, CIAC president Victor Jose Luciano said that 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 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,” Luciano told The STAR.

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.