MANILA, Philippines — The government is taking a cautious approach in reviewing the P33-billion offer to privatize air traffic control (ATC) through a public-private partnership (PPP) given the financial impact of the project.
The Civil Aviation Authority of the Philippines (CAAP) wants financial guarantees that it would be able to sustain its other functions if the ATC is turned over to a private operator through PPP.
CAAP is taking its time reviewing the unsolicited proposal to take over the country’s ATC, as filed by a consortium composed of ComClark Network and Technology Corp., JG Summit Infrastructure Holdings Corp. and Asia’s Emerging Dragon Corp.
CAAP deputy director general Danjun Lucas said the regulator is evaluating how it could sustain operations without revenues from ATC. The service accounts for around 70 percent of CAAP’s revenue.
CAAP’s air traffic control earnings finance its other operations. The agency is also in charge of airline regulation, airport management and independent investigation.
“We are not familiar with the private operations [of air traffic control] because to our mind, this is a government function,” Lucas said.
On top of this, Lucas said CAAP’s functions outside of ATC are mostly public service, especially airport operations, as they involve gateways to some of the country’s remotest islands.
There are also airports that have no commercial flights but CAAP has to maintain them so that they are ready for emergency purposes like disaster response and military efforts.
The consortium led by ComClark has been denied twice of its offer to take over ATC. However, the group is making a third push, and this time it is gaining traction unlike in previous tries.
In September, the proposal was determined complete by the PPP Center. In October the offer was accepted by the Department of Transportation and CAAP for detailed evaluation.
The consortium wants to operate air traffic control in the Philippines, committing to invest at least P33 billion to upgrade communication, navigation and surveillance equipment.
CAAP currently manages ATC through the over 1,000 air traffic controllers in its employment nationwide.