MEGAWIDE Construction Corp. and its partner GMR Infrastructures Ltd. are open to participate in an “honest and healthy competition” in the aviation-infrastructure development sector, even after figuring in a controversial fight for the right to develop the Clark International Airport.
Louie B. Ferrer, the president of GMR-Megawide Cebu Airport Corp., described today’s investing atmosphere as “very exciting times” given the level of concentration for infrastructure projects and the level of participation from the private sector.
“It’s a sign our economy is growing and we are keeping up,” he said. “It is a good climate for development because we are open to honest and healthy competition. That drives up the quality of the proposals because we want to offer only the best services.”
Ferrer reminded the government of its mandate to be transparent and fair in its dealings with proponents of infrastructure deals. This is especially true for contracts under the Public-Private Partnership (PPP) Program.
“This administration has committed itself to transparency and fairness. From our view, the outlook for PPPs is very promising. It has delivered solid results across various sectors and we are confident it will be the way forward,” he said.
Ferrer made this statement in light of the controversy currently hounding the development of Clark International Airport.
His group submitted in July last year a P250-billion (P12.59-trillion) unsolicited proposal for the modernization of the airport in the north, which is currently underutilized due to its distance from the capital.
While Ferrer is concerned over the “discontinuation” of his group’s proposal, which coincidentally came after the transportation department announced a P187-billion offer from Filinvest Development Corp. and JG Summit Holdings Inc., he is still confident that the government will be fair and transparent in its review.
“We understand the Department of Transportation has a lot of responsibility to evaluate and deliver projects. We are now in communication with them and would like to wait for the results of the review,” he said.
Ferrer said his group’s proposal is a better choice for the government. Clark, he said, could either become the gateway to Central and Northern Luzon, or a premier international gateway for the Philippines.
“There was one missing element in previous studies for Clark, however. And that is a comprehensive development framework,” he said.
Under a 50-year development plan, the Filipino-Indian consortium aims to modernize Clark International Airport in six phases, leading to a total annual passenger capacity of 100 million per year.
It aims to build two terminals and three runways, two of which will be independent under an 850,000-square-meter land. The plan also involves the construction of an integrated railway connection from Manila, similar to the one in Delhi India.
The P250-billion unsolicited proposal is at no cost to the government, “will not require any subsidy, guarantee or mandatory movement of airlines from Naia to Clark.”
Instead, the proponent “committed to pay the government annually a share of the airport revenues over the concession period.”
“It shifts the responsibility of capital expenditure from the government to us over the entire concession period,” Ferrer said.
The proposal of the Gokongwei and Gotianum families involves the development of the airport under a five-decade concession, and will start with an initial capacity for eight million passengers per year.
Its proposal also allows the airport to expand its terminals and runways to easily accommodate for the traffic growth over the next 50 years.
While Transportation Undersecretary Roberto C. Lim said the Filinvest-JG Summit group submitted its proposal last January, the consortium clarified that the unsolicited offer was actually submitted in July 2016.
Ferrer’s pitch also included his company’s marketing expertise to build traffic in Clark, similar to what was accomplished at the Mactan-Cebu International Airport.
From just seven international destinations in 2014, Mactan-Cebu now has a total of 16 with the opening of new destinations currently in the works. Domestic destinations experienced a similar growth from 22 to 27 in just two years. Significantly, the number of airline partners has also increased from 11 to a total of 19 by this month.
Route marketing, he said, is a unique strength of the consortium.
“While local carriers are already present in Clark, we believe its domestic connectivity can still be improved. There is also great potential for operating international circular routes which will include both Mactan-Cebu and Clark,” he said.
With the consortium’s vast experience operating airports in Asia and Europe, it has developed strong relationships with both local carriers and airlines in Asia, Europe and the Middle East, Ferrer added.
“Not only will we gain easier access to new routes, we will also be able to provide passengers with a wider array of choices and lower fares,” he said.
Currently, the Clark Civil Aviation Complex, located within the Clark Freeport Zone in Pampanga, covers an area of approximately 2,367 hectares with a 3,200-meter long runway and associated taxiways, aircraft parking apron, a passenger terminal building and related facilities. It has two runways in parallel configuration.
The airport logged in a total of 6,205 international and domestic flights with 950,732 passengers for local and foreign routes in 2016.
Although underutilized, Clark has a local catchment area with an estimated population of 23 million. It also serves passengers from Manila, and those with connecting flights from Cebu, Davao, and other local destinations.