Major flaw

Earlier this month, the North Luzon Airport Consortium bagged the 25-year contract to operate and maintain Clark International Airport in Pampanga after the NEDA Investment Coordinating Committee gave the green light for the award.

The members of the North Luzon Airport Consortium are Filinvest Development Corp., JG Summit Holdings Inc., Philippine Airport Ground Support Solutions Inc. and Changi Airport Philippines Pte Ltd. The signing of the operations and management contract is scheduled next month.

This is supposed to be good news since the Clark International Airport will be operated and maintained by a group that includes Changi, the operator of Singapore’s Changi Airport which has been consistently named the world’s best airport since 2013 and is therefore synonymous with excellence.

Actually, the Changi group that won the award for the Clark airport has nothing to do with the Changi Airport itself.

It is Changi Airports Philippines Ptd. Lte. (CAP) that is included in the North Luzon Airport Consortium and not Changi Airport Group Singapore (CAGS), which is the company that operates Singapore’s Changi Airport.

CAP is a wholly-owned subsidiary of Changi Airports International Pte. Ltd., which is itself a subsidiary of CAGS. In short, CAP is like the grandchild of CAGS.

What’s wrong with that?

During the bidding for the 25-year operation and management (O&M) contract, the Bases Conversion and Development Authority (BCDA) included in its instructions to bidders that to be eligible to submit a bid, the bidder must have operated and managed an airport within the Skytrax Top 50. The ITB also requires a certain net worth from the member-companies of a consortium.

While CAP is a member of the Changi group, it does not change the fact that it had nothing to do with its grandparent’s success, nor can it claim its grandparent’s track record as its own.

We have this legal concept called veil of corporate fiction which states that a corporation or a company for that matter is a juridical entity separate and distinct from its owners. Corollary to this is that the assets and liabilities of the parent are separate from those of its subsidiaries, even if wholly owned and vice-versa.

How is it possible then that CAP passed BCDA’s requirement in terms of net worth and of having operated in a Skytrax-topping airport?

It seems that the CAP itself has had no professional activity other than the registration of its name only in 2015.

The BCDA disqualified the other bidder – X-Droid – composed of Indonesia’s Angkasa Pura II, Globalport 900, Mazy Capital and Desco for committing a mistake in formatting but seems to have overlooked CAP’s failure to comply with crucial requirements.

Why the rush

What is already a headache-inducing commute for millions of Filipinos everyday is about to get much worse, thanks to a hilariously ill-conceived bridge reconstruction project.

Despite growing public opposition, the Department of Public Works and Highways (DPWH) seems to have made up its mind to finally close the nine-year-old Estrella-Pantaleon Bridge, a two-lane bridge which connects Estrella Avenue in Makati to Barangka Drive in Mandaluyong.

The bridge has exceeded its 20,000 daily vehicle limit, according to DPWH. It will be replaced by one that will have four lanes, spanning more than 500 meters, costing P1.2 billion, and expected to be completed by 2020.

The Estrella-Pantaleon Bridge is set for a final date of closure on Jan. 12, 2019. Previously postponed in September 2018 due to massive public backlash, the DPWH decided to wait until after the holidays to avoid the peak season rush.

But as the holidays come to a close, what was once a distant worry will soon be a daily reality for almost three years.

The bridge has helped alleviate traffic for citizens who frequently shuttle between the two cities. Providing relief from chokepoints in its arteries, the bridge will be closed for 30 months to add two more lanes. With 100,000 vehicles passing through the bridge on a daily basis, its closure would reroute motorists to Guadalupe Bridge, which is also scheduled for rehabilitation within the first quarter of 2019.

Accounting for the average length a car takes up on the road and multiplying this by the number of cars that will be rerouted to surrounding streets, EDSA, which is already the bane of Metro Manila motorists, will get about 12.5 more kilometers of traffic. Expect a virtual standstill.

That the project will worsen our traffic situation during construction is a given. DPWH estimates that the new bridge would allow 1.3 million cars to pass through, but these will still feed into narrow streets, creating a major bottleneck in one of the busiest areas of the metro.

While the intention behind the reconstruction of the bridge is noble, it appears to be poorly planned. With no regard for actual traffic management and without careful consideration for how badly it will congest surrounding areas, there was clearly a lapse in judgment from whoever conceptualized this new bridge.

Many have already suggested better ways of tackling Metro Manila’s traffic problem like build more bridges, providing more sidewalks and bicycle lanes, investing in improved public transport, among others. But no one saw this bridge reconstruction project coming, because the bridge is still a new one and is in fact among the youngest in Manila.

There has been no public demand to rehabilitate this bridge. So why fix when it ain’t broken?

It is worth noting that one of the most controversial aspects of this project is the fact that DPWH has partnered with a Chinese company blacklisted by the World Bank for being involved in graft in a previous infrastructure project in the Philippines.

There’s seems to be more than meets the eye here.

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