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Business

Sangley

EYES WIDE OPEN - Iris Gonzales - The Philippine Star

There’s trouble brewing for the Sangley Airport Group it seems after Cavite Gov. Jonvic Remulla said he is willing to scrap the massive project if the government thinks that having a Chinese contractor do it would make it a security threat.

The way I see it, Sangley is caught in the middle of the US-China power struggle.

Sangley, which ironically was literally an old-fashioned term used to describe Chinese mestizos in the Philippines during the Spanish era, is a former naval station in Cavite developed by the Americans. Naval Station Sangley Point was a communication and hospital facility of the US Navy built in 1898 and used until 1971.

Perhaps, the sprawling area’s rich history tied to the Americans has something to do with the brewing trouble now. Perhaps the US won’t allow a Chinese contractor in its blacklist to develop what was once one of their strategic military bases in the Philippines.

The issue

To those not familiar with what just happened, let me share with you the latest developments the past couple of days.

In a television interview last week, Remulla said the provincial government of Cavite is willing to terminate the agreement with  Chinese state-owned firm China Communications Construction Co. Ltd (CCCC) if the national government deems the partnership as a security risk.

CCCC’s subsidiary was among the firms that helped build China’s artificial islands in the contested waters of the West Philippine Sea, and the US announced last week sanctions on such companies.

Lucio Tan’s MacroAsia Corp., headed by the taipan’s son-in-law Joseph Chua and CCCC formed a consortium and was the sole bidder for the Sangley Point International Airport Project. I tried to reach Chua for comment but I didn’t get any response.

Last week, the US Commerce Department said Chinese companies “enabled China to construct and militarize disputed outposts in the South China Sea.”

“Since 2013, the PRC (People’s Republic of China) has used its state-owned enterprises to dredge and reclaim more than 3,000 acres on disputed features in the South China Sea, destabilizing the region, trampling on the sovereign rights of its neighbors, and causing untold environmental devastation,” Secretary of State Mike Pompeo said in a statement.

The US placed the 24 companies, including the CCCC subsidiary, in its “Entity List” which allows it to block exports of US goods and materials to them.

What now?

I asked the Sangley Airport project proponents and they too, said it’s all up to President Duterte and the Department of National Defense to give the final go-signal to the project.

Although they clarified that it is only CCCC’s subsidiary that is on the list and not CCCC itself.

Now I’m not sure what will happen to the project, considering that it was supposed to get funding from China, at least that’s what I knew since last year when I did an exclusive story on it.

The project, as I reported, is envisioned to develop the former United States naval station into a modern gateway and transform it into a world class airport that would serve as an alternative to NAIA.

This particular government-to-government proposal has already been submitted to the Department of Transportation for approval.

Part of the funding will go through the Belt and Road Initiative.

Proponents have signed a development agreement with the Citic Group, formerly the China International Trust Investment Corporation, which is a state-owned investment company of China. CLSA is the local unit of the CITIC Group.

China’s Belt and Road Initiative is dubbed as the modern version of China’s Silk Road, wherein China intends to have stronger economic, infrastructure and trade cooperation with Asian countries, including the Philippines.

Under the proposal, Sangley Airport will be developed in phases, with the first runway to operate as a supplemental runway to NAIA, handling a design capacity of 25 million passengers per annum (mppa), according to documents obtained by The STAR.

The first runway, with a capex of $3.8 billion, can be operational as early as 2022, say the documents.

Proponents will then establish a second runway, with a capex of $5.5 billion, to take over the capacity from NAIA, with a design capacity for 75 mppa.

Third and fourth runways can be established upon certain demand triggers, which can eventually accommodate 130 mppa.

Sangley has been recommended by the Japan International Cooperation Agency as the best option for a new airport out of nine pre-selected sites.

The best way forward really is to clear all the issues and make sure that no firm – whether Chinese or not – would be part of the project if it is proven to betray the interest of the Philippines.

There is no immediate need for an airport now given the coronavirus disease 2019 or COVID-19 pandemic’s impact on the travel business, but when the skies are clear and the world is ready to fly again, we may still have the same congested airports if we don’t develop alternative gateways.

What is clear for now is that the Sangley Project joins a long list of deals now caught in the ongoing power struggle between Uncle Sam and Uncle Xi.

Iris Gonzales’ email address is eyesgonzales@gmail.com. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com

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