I recently expressed my disagreement to a petition filed before the Supreme Court to issue a TRO on the successful and highly beneficial DOTr-NNIC partnership for the rehabilitation and further development of the NAIA complex.
One of our readers shared a similar opinion but included a comparison of the Clark-LIPAD concession agreement versus the MIA-NNIC partnership based on his engagement with the Clark International Airport.
I declare that I have not had a chance to verify all the claims in the letter but because of its very valid points I deem it necessary to put it out in the open for all to see.
Dear Mr. Beltran:
I regularly read your column CTALK. As to your column “SC urged to suspend NAIA PPP to cut fees,” Ugnayan ng mga Lumalaban sa Airport Privatization, should also evaluate the privatization of Clark International Airport – to be consistent.
The documents below will show that the government’s share (18.25 percent for 25 years) in the Operation and Management Concession Agreement (OMCA) of the Clark International airport pales in comparison with the NNIC Rehabilitation and Operation agreement (80 percent for 15 years+ P30B upfront fee upon signing). Below is a comparative analysis of the 2 PPPs:
LIPAD (Luzon International Premier Airport Development Corp.) Clark International Airport: Operation and Management Concession Agreement is for a period of 25 years.
Clark International was a brand-new airport that cost P12.5 billion with an additional P1.6-billion Airfield Ground Lighting System and Terminal Radar System at the time the PPP was made.
LIPAD’s investment commitment is reportedly only P200 million since the airport was brand new. At the time of negotiation no upfront fee was offered or required, while the guaranteed income of government was 18.25 percent of revenues.
In contrast, the DOTr-NNIC Rehabilitation and Operation Agreement of the Manila International Airport is only for 15 years with no investment on the part of government (As is-Where is) and provides for the construction of a new terminal in three years.
The Concession Agreement required NNIC-San Miguel Corporation to pay the Philippine government P30B upon signing of the contract plus P2B annually and 82.16 percent of annual revenues.
The above info should open the eyes of Ugnayan ng mga Lumalaban sa Airport Privatization – that the government’s choice of NNIC is the best PPP amongst the other airport privatization deals.
Since the brains/mastermind behind the Clark OMCA are still in power, kindly conceal my identity for security reasons.
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Our reader also emailed a letter of Ret. Gen. Aaron Aquino, president/CEO of Clark International Airport Corporation, to BCDA OIC Atty. Batuhan dated May 5, 2022 regarding the concessionaire agreement entered into by the BCDA at the expense of CIAC.
Dear Atty. Batuhan:
This has reference to the Operations and Maintenance Concession Agreement (CA) between Bases Conversion and Development Authority (BCDA) and Luzon International Premiere Development Corp. (LIPAD) dated 21 January 2019, which transferred the operations and maintenance of the Clark International Airport (CRK) to LIPAD covering 781.06 hectares of land within the Clark Civil Aviation Complex (OCAC).
Under the said CA, BCDA receives from LIPAD 18.25 percent of the gross revenues from the operation of the Clark International Airport from the Existing Handover Debt. For BCDA to comply with its obligations under the CA, CIAC transferred P603,344,544.83 worth of airport assets to BCDA.
It is also worth mentioning that some of the assets transferred to BCDA, particularly, the construction of the Terminal Phase 2 and the acquisition of its equipment, were sourced from loans obtained by CIAC from the Land Bank of the Philippines (LBP) which the CIAC continuously pays and services to this very day in the amount of P13,602,419.35 payable quarterly plus an annual interest rate of four percent.
Further, CIAC lost revenues from aero operations annually of P531,128,508.00 (average annual revenue in the last four years prior to privatization) and about P182,313,354.00 annually (average annual revenue from lease agreements transferred to the BCDA in the last four years) from non-aero operations covering lease and concession agreements.
Despite the CIAC having transferred airport assets and 781.06 hectares of land within the CCAC to the BCDA as well as having lost all revenues as a result of the CA and continuously paying and servicing its loan with the LBP, the CIAC does not acquire its just share from the proceeds of the BCDA in its CA with LIPAD.
It is for these reasons that the CIAC Board of Directors deemed it just and appropriate to formally request from BCDA a 50 percent share in the Gross Revenue Share of BCDA that it receives monthly from Luzon International Premier Airport Development (LIPAD) Corporation at the rate of 18.25 percent of LIPAD’s gross revenues from the operations of the Clark International Airport (attached herein is the Board Resolution).
Thus, the proposed gross revenue sharing from the operations of the Clark International Airport is as follows:
O&M Concessionaire share: 81.75 percent
BCDA Revenue share: 9.125 percent
CIAC Revenue share: 9.125 percent
CIAC has previously requested for revenue sharing in its letters dated 15 July 2020 and 16 September 2020 to BCDA which were not answered unfortunately.
If it would help us reach a conclusion, we would like to discuss this more in a meeting.
Thank you for your continued support in the Clark International Airport Corporation and your kind consideration to this request will be highly appreciated.
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As far as concession agreements or PPPs are concerned, I strongly believe in the motto: “A deal is a deal” unless the law was broken or is grossly disadvantageous to the government. If so, then let us first go after those in government who made the deals.
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E-mail: utalk2ctalk@gmail.com