SMC sets $300-million budget for Caticlan airport

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. has earmarked around $300 million over the next two or three years for the modernization of the Caticlan airport, the country’s gateway to the world famous Boracay Island.

At the inauguration of the Caticlan airport yesterday, San Miguel president and chief operating officer Ramon S. Ang said the company has fleshed out the masterplan for the redevelopment of the Caticlan terminal into a world-class, state of the art facility, with the aim of luring more foreign and local tourists.

 Ang said the renovation would involve the expansion of the terminal and the airport’s runway from 950 meters to 2,500 meters to accommodate more passengers.

The company, through unit TransAire Development Holdings Corp., also plans to extend the width of the runway from 30 meters to 60 meters to allow domestic carriers to bring in bigger aircraft.

Once the expansion is finished, San Miguel is hoping to increase the terminal’s capacity by 30 percent. With the renovation work, airfares to Boracay are expected to be more competitive since airlines can use bigger aircraft with more seating capacity.

Targeted for completion by December 2013, the country’s first privatized airport development project will include the development of a budget hotel, a convention center that can seat 25,000 people, and a commercial/retail area.

According to the Department of Tourism, tourist arrivals in the pristine island resort of Boracay in Aklan province rose 20 percent to 779,666 last year from 649,559 in 2009.

San Miguel Holdings Corp., has acquired a majority interest in Caticlan International Airport Development Corp. (CIADC) from a consortium led by businessman George Yang.

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

It has up to seven years to build and expand the airport and 25 years to operate the facilities. All revenues will go to CIADC except for earnings from the operation and maintenance of navigation systems, which will go to the Department of Transportation & Communication.

Ang said the company is also looking to bid for other domestic airports including Puerto Princesa, Palawan; Cagara, which is on the northeastern portion of the island of Mindanao; and Bohol, Cebu.

San Miguel’s venture into the infrastructure business is in line with diversification strategy aimed at fuelling faster growth.

The conglomerate also also announced earlier its interest to take part in a consortium that is bidding for the right to modernize the Clark International Airport. It is also interested in taking over the operations of the Ninoy Aquino International Airport Terminal (NAIA) 3 should the government open it for privatization.

The conglomerate sent earlier an offer to privatize the NAIA 3, through unit Philco Aero Inc., its joint venture with Korean partners.

San Miguel has been aggressively moving away from its core food and beverage business, and into heavy and high-growth sectors including telecommunications, oil refinery, power and infrastructure. The company earlier sold $900 million worth of equity and convertible bonds to help fund infrastructure investments.