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Dominguez, tired of unfeasible plans, threatens to pull out NAIA from PPP

Prinz Magtulis - Philstar.com
Dominguez, tired of unfeasible plans, threatens to pull out NAIA from PPP
Finance Secretary Carlos Dominguez III floated the idea while expressing dismay to private investors that tried but failed— or even pulled out— of the much-anticipated and long-delayed project meant to decongest one of the world’s worst airports.
STAR / File

MANILA, Philippines — Apparently fed up with unimplementable plans from the private sector, the finance chief said the state is ready to modernize the Ninoy Aquino International Airport (NAIA) if investor offers to do so will not meet government demands. 

Finance Secretary Carlos Dominguez III floated the idea while expressing dismay to private investors that tried but failed— or even pulled out— of the much-anticipated and long-delayed project meant to decongest one of the world’s worst airports.

“They want to do or they don't want to do (it)? Make up your minds because if not, NAIA will do it itself,” Dominguez told businessmen at the Management Association of the Philippines conference on Tuesday.

“It may not be as good as the private sector (proposal) but their plans cannot be implemented anyway so what’s the point of discussing that? NAIA is prepared to do it,” he added.

Under the Duterte administration, the NAIA rehab was envisioned to be accelerated and at first got the interest of a consortium of six conglomerates including the Ayala Group and Aboitiz Group. In the end however, the consortium backed out of the project last year after the administration rejected a revision to its plans that was intended to make NAIA financially viable while pandemic travel restrictions are in effect.

A new bidder, Megawide Construction Corp., then came forward with a proposal, but the Manila International Airport Authority, which offers the NAIA renovation as a project, took back the undertaking from the company at the prodding of Dominguez and Acting Socioeconomic Planning Secretary Karl Kendrick Chua. Both believed that Megawide did not have the financial ability to mount the P109-billion project, something the firm, backed by Indian investors, objected to.

“The only thing you’ve seen so far is that they have capital, but we have not seen it in actuality,” Dominguez said.

Currently, MIAA is evaluating other proposals for the NAIA Project from Philippine Airport Ground Support Solutions Inc. and San Miguel Corp. 

Dominguez himself had insisted against easily giving in to the demands of private investors in projects at the cost of government, including guarantees that translate to contingent debts and paid for by taxes. This is a big reason why he and the rest of President Rodrigo Duterte’s economic managers had earlier shunned public-private partnerships (PPP) as a primary mode of infrastructure development.

Contingent liabilities under review

It was also this position that prompted him to back Duterte’s unilateral cancellation of water contracts in Metro Manila supposedly for "onerous" provisions that put the public at a disadvantage. A new contract had since been drafted and currently under negotiations between the government and water firms, Manila Water Company Inc. and Maynilad Water Services Inc.

This aloofness to PPP somehow softened in recent years after delays hit government-initiated and funded projects, including those by loans from foreign donors. The pandemic added to implementation woes, but despite that, Dominguez has completely rejected proposals that pay private investors more even if that means getting fresh delays in projects. 

“You want us to bend ourselves each time, we are not gonna do it. This administration is not gonna do it,” he reiterated.

In fact, Dominguez even went a step further and said that he had ordered a reassessment of all the government’s existing contingent liabilities, including those from PPPs and state-run pension funds. The finance agency oversees government-owned and -controlled corporations including the Social Security System and the Government Service Insurance System.

“We want to give the public a good view of what our real liabilities are so that our decision making is based on facts. We don't have the final numbers on our liability on PPP, but I know they are pretty huge,” he said.

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