A public policy think tank has urged the Philippine government to prioritize the rehabilitation of the Ninoy Aquino International Airport, dubbed as one of the world’s worst, as moves to privatize its operations continue.
By PRINCESS FRIEL LONTOC and MERY JOY SISCAR
MANILA – A public policy think tank has urged the Philippine government to prioritize the rehabilitation of the Ninoy Aquino International Airport, dubbed as one of the world’s worst, as moves to privatize its operations continue.
This was following the Communications, Navigation, and Surveillance Systems for Air Traffic Management (CNS/ATM) system failure that occurred on January 1, affecting thousands of passengers. Among the proposals that are being put forward for now is its privatization, which, according to InfraWatch PH will not help in the long run.
Ferdinand Marcos Jr. recently denied that he has plans of privatizing NAIA, saying that a “private firm cannot own the airport,” after the transportation department said they are working double time to privatize the airport and that the government is already working on the terms of reference with the Asian Development Bank.
“If we’re pertaining to the rehabilitation of NAIA, we are not against it in any way–but we have to reiterate that privatization is not the solution,” lawyer Terry Ridon of InfraWatch PH, told Bulatlat in an interview.
The Civil Aviation Authority of the Philippines, an attached agency under the Department of Transportation (DOTr) that oversees the country’s air transportation, earlier denied that there was negligence on their part, adding that apart from having highly-qualified technicians, they also conduct regular system checks.
On a joint Senate committee hearing on January 12, Thales Corp., a corporate venture focusing on cybersecurity and data protection, said that they refuse to upgrade the air traffic systems due to unsettled claims amounting to P986 million.
In 2010, Thales Corp. partnered with Sumitomo Corp., an electric services company, in the installation of the country’s CNS/ATM. In 2011, the Commission on Audit (COA) suspended the advance payment of P58.92 million to the project. It was only in 2013 that the notice of disallowance was lifted, due to appeals by the DOTr.
Due to these project delays, the joint venture accumulated claims that remained unsettled by the Philippine government. These claims include P477 million suspension claims, due to the three-year suspension of the project from 2010-2013; prolongation claims or prolongation of work suspensions amounting to P387 million; and escalation claims worth P121 million.
Thales refuses to enter a new contract until the Philippine government settles these claims. Still, CAAP is reportedly in talks with Thales, seeking advice on upgrading the system they previously installed.
Ridon, however, said that a system upgrade is not the only issue here. “Before we talk about the equipment, we must also look into the programming schedule, maintenance, and repair of the CNS/ATM. Funds will be wasted if these systems are not properly maintained.”
He also stressed that the privatization of NAIA will not prevent similar system failure as seen last Jan. 1, as it would not include the privatization of the radar system and the air navigation operations. “It will not include the privatization of CAAP and our air navigation systems, and with regards to the problem, CAAP’s leadership should still be questioned.”
Per the senate hearing earlier this month, among the issues that was brought up were the absence of CCTV units in equipment rooms, a faulty circuit breaker, and oversight.
Calls for rehabilitation
The rehabilitation of NAIA has long since been discussed across various administrations, all due to various glitches and problems that arose throughout the decades.
TIMELINE: NAIA Rehabilitation
March 3, 1972: Executive Order No. 381 is signed by President Ferdinand Marcos Sr., authorizing the construction of Manila International Airport and the creation of a Committee on MIA Rehabilitation and Improvement. According to the Manila International Airport Authority, the 1970s saw a significant increase in the number of international passengers, which prompted the building of Terminal 1 in 1981.
November 27, 1987: Under President Corazon Aquino’s administration, Republic Act No. 6639, which renames Manila International Airport to Ninoy Aquino International Airport, is passed without executive consent.
According to the MIAA, NAIA Terminal I reached its projected capacity of 4.5 million passengers in 1991 as a result of the airport’s steadily increasing air traffic. The terminal once more had a passenger overflow in 1997 when the number of passengers exceeded 7.7 million, despite major modifications boosting its design capacity by 1.5 million.
As a result, the Philippine government pushes on with plans for Terminals III and III at NAIA.
June 9, 2008: President Gloria Macapagal-Arroyo signs Executive Order No. 732, which establishes a task force to ensure Terminal 3’s quick inauguration and operation. The terminal didn’t fully begin running until more than a month later. Foreign investors claim that the large, deserted port serves as a stark reminder of the legal uncertainties and corruption that may plague companies doing business in the Philippines. It is situated along a road that runs south of Manila from the airport to affluent residential areas.
2011-2013: The gateway is named the world’s worst airport by the travel website “The Guide to Sleeping in Airports,” and NAIA also ranks among the worst airports in Asia in 2015 and 2016 but eventually drops off the list in 2017. Decades of air traffic congestion and operational issues finally catch up to NAIA.
February 12, 2018: The NAIA Consortium formally presents to the Department of Transportation its unsolicited proposal to renovate NAIA. The largest companies in the nation, including Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corp., Alliance Global Group, Inc., Asia’s Emerging Dragon Corp., Filinvest Development Corp., JG Summit Holdings, Inc., and Metro Pacific Investments Corporation, make up the group.
San Miguel President and COO Ramon Ang also said they were the first to make an offer to renovate the airport but were advised the project should be maintained “for somebody else to compete with us at the moment” in an interview with Rico Hizon of CNN Philippines in July 2020.
March 1, 2018: The Megawide-GMR team, which consists of Megawide Construction Corporation and GMR Infrastructure of India, also formally submits their plan to widen the airway. The upgrading of the “model” Mactan-Cebu International Airport and Clark International Airport was carried out by the collaboration.
May 1, 2019: After making threats to halt the project, Transportation Secretary Arthur Tugade ultimately agrees with the consortium’s new offer after both sides reach an understanding of the terms of the agreement.
July 5, 2019: The Department of Transportation rejects the consortium of seven conglomerates’ unsolicited offer to renovate the Ninoy Aquino International Airport (NAIA) after deciding to mandate that all proponents of airport projects model their draft concession agreements after the operation and maintenance agreement for Clark International Airport.
November 29, 2019: The NAIA Consortium’s plan to renovate NAIA is approved by the National Economic and Development Authority (NEDA) Board following a number of amendments. The proposal was finally reduced to 102 billion for a 15-year agreement from its planned 350 billion for a 35-year concession term.
March 9, 2020: Metro Pacific Investments Corporation declares that it is leaving the coalition of major corporations seeking to modernize Ninoy Aquino International Airport (NAIA), whose unified plan had previously been rejected by the government. The tycoon Manny Pangilinan-led conglomerate acknowledged in a disclosure that it had long since informed its partners in the so-called NAIA Consortium of its “plan to withdraw” from the project. The company has submitted at least three updated bids to the Department of Transportation since 2019 in an effort to secure a 102 billion dollar contract to handle 15 years of NAIA improvements and maintenance.
July 7, 2020: The major businesses in the country submitted an unsolicited plan to modernize the Ninoy Aquino International Airport (NAIA), but the Philippine government rejected the adjustments.
The majority of the adjustments suggested by the NAIA Consortium, according to Lucio Tan’s LT Group in a disclosure on July 6, were “not willing to accept” by the government. These alterations have not yet been made public then.
July 17, 2020: According to a declaration from the corporations, Megawide Construction Corporation and GMR Infrastructure Limited, an Indian company, have been accorded formal original proponent status for the NAIA restoration plan. The Mactan-Cebu International Airport’s passenger terminals, which opened in June 2018, were likewise created by Megawide GMR. When it opens in the upcoming six months, the Clark International Airport’s new terminal, which is almost finished, will increase capacity to up to 12 million passengers annually.
November 23, 2020: After NEDA and the Finance Department rejected its application to take on the project and questioned the company’s financial capability, Megawide reaffirms its ability to pay for the renovation of NAIA.
December 15, 2020: Megawide officially delays plans to renovate NAIA by announcing the revocation of its initial proponent status for the airport’s rehabilitation.
December 17, 2020: San Miguel Corporation presents a proposal to run and maintain NAIA, says MIAA general manager Ed Monreal at a Senate committee meeting. Additionally, he names Philippine Airport Ground Support Solutions Inc. as the rival candidate vying to manage the global entry.
Tugade claims Megawide still has time to convince the MIAA board to reinstate it as the rehabilitation project’s contractor during the same hearing.
December 21, 2020: Megawide Construction Corporation officially appeals to have its preferred position in the plan to renovate the Ninoy Aquino International Airport reinstated. After the regulator voted to deprive Megawide and its Indian partner GMR Infrastructure of its original proponent status for the 109-billion project, Megawide Chief Branding and Corporate Affairs Officer Manuel Louie Ferrer confirmed the filing of the motion for reconsideration before the Manila International Airport Authority and the Department of Transportation.
January 26, 2021: Megawide discloses thatbthe Manila International Airport Authority has rejected its application for reconsideration, which sought to reverse the termination of its preferred status for the renovation of NAIA. The consortium also claims that the airport administration officially notified it of the rejection the day prior.
August 2022: The Department of Transportation (DOTr) announces it will rebid the rehabilitation of the Ninoy Aquino International Airport (NAIA) within the year.
Transportation Secretary Jaime J. Bautista said that they will invite the private sector to revisit the possibility of doing a Public Private Partnership (PPP) for NAIA. He said that it might be Megawide and the super consortium can participate again. Already, NAIA has been operating beyond its capacity of 35 million passengers per annum before the pandemic.
Reacting to the government’s supposed plans to forge a partnership with the ADB, Ridon said this brings in a new set of problems. “Administrations have rejected both rehabilitation and privatization proposals concerning NAIA in the past so the momentum is a little off.”
In the 2022 General Appropriations Act (GAA), P3.87 billion was allocated for the capital outlay for the Aviation Infrastructure Program of the DOTr.
In 2019, Budget and Management Secretary Benjamin E. Diokno announced that the government will invest P2.16 billion in aviation infrastructure which was expected to boost the country’s bid to be a major global aviation market by 2022.
Some of the key projects included the Bohol International Airport Development Project, the construction of the nautical highway leading to the Sayak Airport terminal in Surigao del Norte, and the extension of the runway of the Catbalogan Airport in Samar and Davao International Airport.
In the 2023 GAA special provisions, the amount is allocated for the construction of various airports and navigational facilities, and the acquisition of navigational equipment.
It is recorded in the DOTr books of accounts and transferred to the Civil Aviation Authority of the Philippines as an equity contribution of the National Government in accordance with Section 14 of R.A No. 9497.
In the latest 2023 report on the Department of Budget and Management (DBM)’s website, DOTr stated in the special provisions that P100 million shall be given to CAAP as the budget for Maintenance and Other Operating Expenses (MOOE).
According to CAAP Spokesperson Eric Apolonio, they have secured a budget of over P120 million for the systems upgrade.
The upgrade will affect the current 13 radars of the CNS/ATM, located at NAIA Terminals 1 and 2, Clark, Tagaytay, Aparri, Laoag, Cebu-Mt. Majic, Quezon-Palawan, Zamboanga, Mactan, Bacolod, Kalibo, and Davao. (JJE, RVO)