Manila’s aviation master plan

This is the first in what I hope will be hundreds of articles for the Philippine STAR. I have always looked at this paper as the holy grail of local newsprints. It has the widest and most diverse readership, after all. I am grateful for the opportunity and commit to write with truth and integrity.

This corner will tackle economic, political and social issues that affect us all. What I hope will set this column apart is that my sources will be the people and/or agencies at the center of the issue. Thus, the name “The Corner Oracle.” In time, I hope this column will become a preferred source of reliable information.

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Last month, the Department of Transportation announced that it was fast-tracking the construction of the Sangley airport to absorb a part of NAIA’s traffic.  When completed, general aviation which includes non-commercial flights like private jets, cargo deliveries and surveillance flights, will be diverted to Sangley to decongest NAIA’s two overstressed runways. This came on the back of President Duterte’s surprise visit to NAIA and his dismay over its poor on-time performance record.

The move to divert general aviation to Sangley was met with wide criticism. Many accused it of being a white elephant in the making given that Sangley does not have enough space to accommodate private hangars nor does it have access roads wide enough to absorb the increased traffic of cargo vans and private vehicles. In fact, Ricky Razon announced that his fleet of Gulfstream jets will not call on Sangley but instead utilize Subic as its hub.

I spent a good part of the day with DOTr Secretary Art Tugade to understand his aviation master plan for the greater capital region (Metro Manila, Central Luzon and Southern Tagalog).

At the heart of his plan is to create over-capacity and competition between airports. Its a scheme called “airport complementation strategy,” the same tact adopted by the world’s busiest financial centers like London, New York and Tokyo.

We must prepare for the imminent spike in aviation traffic and also create a situation whereby multiple airports compete among themselves, said the Secretary. This will up their game in terms of service, amenities and adoption of new technologies. Ultimately, market forces will determine which airport gets the lion’s share of traffic. This is how we become future-ready.

The DOTr will continue to entertain unsolicited proposals for new airports for so long as they do not call for sovereign guarantees or require assurances on air traffic.

Sangley plays a small role in the whole scheme of things. It is being renovated only as an option for general aviation. Nothing stops private operators from choosing other airports, be it Subic or Clark. The rehabilitation and expansion of Sangley started as early as May 2018, a year before the President insisted that general aviation be diverted out out of NAIA. The head start in construction will allow Sangley to be operational by November this year.

Along with Sangley, multiple airports are being developed simultaneously. Terminal two of Clark will be the first to come online. Initiated in December 2017, Clark’s second terminal will go down in history as the fastest project ever undertaken by government.  The project was structured as a PPP-Hybrid whereby government builds the facility using funds from ODA sources while operation and maintenance will be passed-on to the private sector. The success of the hybrid model is now a template for future DOTr projects.

The P9.36 billion Clark terminal 2 is now 67 percent complete. It is expected to be operational by July 2020 under the management of the Filinvest, JG Summit and Changi consortium. With an annual capacity of eight million passengers, it is seen to take a substantial load out of NAIA’s traffic.

Come July 30, the result of the Swiss challenge for the mammoth New Manila International Airport in Bulacan will be announced. There are no challengers so far and the Secretary sees no impediments to the issuance of a notice to proceed to the proponent, San Miguel Holdings Corp. Construction of the P753 billion airport will start in the 4th quarter for which partial operability will be realized by 2022.

The consortium of seven conglomerates bagged the original proponent status for the rehabilitation of NAIA. Unfortunately, the project is now in flux due to differences in splitting tariffs and the extent of Material Adverse Government Action (the right of the consortium to seek compensation if the state fails to live up to its part of the deal). Sec. Tugade gave the consortium 60 days to submit a revised proposal, this time based on Clark’s template.

Should the consortium back out, the Megawide Group is ready to assume the project according to DOTr’s terms. Regardless of whoever bags the right to rehabilitate, operate and maintain NAIA, Sec Tugade assures that the 37-year-old airport will be completely redone to world class standards by 2022.

Last December, the Solar Group’s All-Asia Resources and Reclamation Corp. along with the city of Cavite submitted an unsolicited proposal to build a new international airport at Sangley. The $12 billion project will be built on 2,500 hectares of reclaimed land. NEDA returned the group’s proposal last January as its implementing arrangements were deemed unclear. The DOTr set June 30 as the deadline for the re-submission of a more detailed plan. As of press time, no proposal was received by the DOTr. Assuming that Solar Group gets the notice to proceed next year, the soonest this airport can become operational is in 2026.

Air traffic in the greater capital region area is seen to top 50 million by the year 2020, 75 million by the year 2030 and 107 million by the year 2040.  With all the plans presently in motion, Sec. Tugade is confident that we will be future-ready. On the horizon are spacious, modern airports with capacities beyond our needs and passengers spoilt for choice.