Clark has better long-term potentials - MPIC

MANILA, Philippines - While Ninoy Aquino International Airport (NAIA) is more attractive from an investment perspective in the short and medium-term, the Diosdado Macapagal International Airport (DMIA) in Clark, Pampanga has better potentials in the long term, Metro Pacific Investments Corp. (MPIC) chairman Manuel V. Pangilinan said.

In an interview, Pangilinan revealed that they are currently in a quandary deciding which between NAIA and DMIA to pursue, although operating both is also a possibility.

MPIC is planning to assemble a consortium of investors, including foreign ones and somebody with experience in airport operations, as it looks at going into this new business. “We are thinking of including Miescor (a Meralco subsidiary) for the operations part,” he disclosed.

Pangilinan said their consultants have recommended to keep NAIA, but at the same time go after the Clark airport for the overflow of traffic.

Pangilinan, who is managing director and CEO of Hong Kong-based First Pacific Co., explained that while NAIA will initially be profitable, in three years it would reach its full capacity. DMIA, on the other hand, has the capacity but not the traffic. “Thus NAIA will be good for the short and medium term while Clark will be better for the long term,” he said.

MPIC earlier signified interest in not only constructing Terminal 2 of the DMIA but also putting up a high-speed railway system that will connect Clark to probably Buendia in Makati.

Last January, Pangilinan met with Clark Indusstrial Airport Corp. (CIAC) president and CEO Victor Jose Luciano to pursue accelerated talks for the development of the new terminal as well as a modern railway system that would link Clark to Manila.

According to Luciano, Pangilinan expressed support for the development of DMIA, particularly the establishment of a world-class railway system. “He (Pangilinan) is fully supportive of the development of the DMIA. This is a welcome development for the airport that will benefit not only Clark Freeport but the rest of the country,” Luciano said.

But MPIC has also added the operations contract for the NAIA terminals to the list of Public-Private Partnership (PPP) projects it hopes to secure from the government through a formal bid.

If ever MPIC goes after the two airports, Pangilinan said what is critical is that a high-speed train line connecting the two airports must be built.

NAIA is a less risky deal since it is already operational and is the most used airport in the country. Clark, on the other hand, serves less than a million passengers a day, which will make it hard for the group to recoup any investment made on the facility if volumes would not grow significantly, Pangilinan added. “But the potential of Clark is bigger,” he said.

The DMIA is being primed as the country’s next international gateway to replace Manila’s inefficient and congested airport system, made up of the three NAIA terminals, as well as the Manila Domestic Terminal.

MPIC earlier tapped the services of its affiliate, the Madrid-based Indra Group, to conduct a study on how Clark should be developed.

Pangilinan said Indra recommended that Clark be developed as a complement to NAIA.

“They suggested a two-airport model for the Philippines,” he said, adding that DMIA would handle mainly international traffic while NAIA would be turned into a main domestic hub.

And before the NAIA terminals are put on the auction block, the government must sort out right away ownership issues that have hounded the NAIA Terminal 3 over the past decade, Pangilinan suggested.

MPIC earlier said that it wants the operation and maintenance of the NAIA terminals bidded out as a package.

According to him, the Indra Group has already submitted to MPIC its study on possible airport projects in the country.

“They seem to suggest to keep NAIA and to upgrade facilities but their view is that NAIA will be congested in three years,” Pangilinan said, adding that the firm also said that the NAIA terminals are better offered as a package.

“The advantage of NAIA is you already have the airports and volume is already there while Clark airport is still ramping up with the volume,” he added.

But Pangilinan said issues surrounding the airport should be resolved first in order to make the package attractive.

Pangilinan said he is open to the possibility that the winning bidders of NAIA will take care of the compensation owed to Philippine International Air Terminals Co. (Piatco) for the construction of Terminal 3. “Part and parcel of it is resolving the issue on Piatco,” he added.

He said that although Clark airport is still behind NAIA’s volume, the former has a bigger potential for expansion.

“In three years, NAIA will be full and there is no space to expand it. We really need Clark,” Pangilinan said, adding that he hopes to undertake the project in three years to address this concern.

DMIA, which is 85 kilometers away from NAIA, is the main airport serving the immediate vicinity of the Clark Special Economic Zone.

“We are now in talks with technical partners for the airport. They are quite keen to participate and visit the site,” he said.