Government may junk unsolicited DMIA terminal 2 proposal

MANILA, Philippines - The Philippine government appears headed toward junking an unsolicited proposal from a Filipino-Korean consortium to develop Terminal 2 of the Diosdado Macapagal International Airport (DMIA) which it was earlier already inclined to accept, and instead wants to undertake a new round of bidding.

Highly placed sources told The STAR that the Department of Transportation and Communications (DOTC) may soon accept solicited proposals from the private sector to undertake the development of the second terminal of the Clark, Pampanga-based airport in partnership with the Clark International Airport Corp. (CIAC).

“The construction of the new terminal will still be in partnership with CIAC. But instead of entertaining unsolicited proposals, the DOTC wants solicited proposals,” a source said.

This could open the door for those who have already signified interest to develop DMIA’s Terminal 2 such as the Metro Pacific Investment Corp. (MPIC) and San Miguel Corp. (SMC).

Just last Jan. 3, MPIC chairman Manuel Pangilinan met with CIAC president and CEO Victor Jose Luciano in Clark where the former said he wants accelerated talks with CIAC for the development of the new terminal as well as a modern railway system that would link Clark to Manila.

According to Luciano, Pangilinan expressed support for the development of DMIA, particularly the establishment of a world-class railway system that would link DMIA to Metro Manila. “He (Pangilinan) is fully supportive of the development of the DMIA. This is a welcome development for the airport that will benefit not only Clark Freeport but the rest of the country,” Luciano said.

The Filipino-Korean consortium Philco Aero earlier submitted a $177-million unsolicited proposal for a joint venture with CIAC for the construction of the new DMIA terminal, which CIAC found to be “superior” to another unsolicited proposal submitted by the Malaysian consortium Bristeel Overseas Ventures.

Luciano explained that the project that will be undertaken by the winning consortium will consist of a new passenger terminal with commercial facilities. “If you look at Heathrow, Changi and even Hong Kong, 60 percent of the revenues come from land use or non-aeronautical fees such as lease rentals and commercial spaces and the rest from landing, take-off and parking fees (aeronautical fees),” he said.

Once the new terminal is operational, he revealed that plans are to convert the old terminal into a domestic terminal or even a budget terminal.

Luciano added that plans for a third terminal will only come in once DMIA has been designated as an international gateway.

The group’s proposal will allow DMIA, which handled 750,000 passengers last year, to gradually increase passenger capacity from three million to seven million over a five-year period.

An inter-agency committee was already evaluating whether to stamp the proposal of Philco Aero as an original one, after which the terms of reference for a competitive challenge – a requirement under the government’s rules on unsolicited proposals to undertake infrastructure projects.

But a source revealed that the evaluation and negotiations with Philco Aero may no longer be pursued since the DOTC has already indicated that it wants to conduct a new round of biddings for the development of DMIA Terminal 2 by way of solicited proposals.

MPIC and SMC earlier indicated that they may partner with Philco Aero to be able to participate in the terminal project, although Pangilinan has said that his group can undertake the project by itself. MPIC and SMC also revealed that they can also be partners in the project.

“Both parties (MPIC and SMC) will jointly undertake a feasibility study of the project and explore the terms and conditions which will be mutually acceptable to MPIC and SMC,” MPIC earlier announced.

For his part, SMC president Ramon Ang also has said before that they have agreed to partner with MPIC for the Clark project. But he said the extent of participation of SMC and MPIC are still being discussed.

But with Philco Aero soon out of the picture, it is not yet known whether SMC and MPIC will be partners or will submit separate proposals once government starts accepting solicited proposals.

Pangilinan said that he wants a more comprehensive approach toward developing Clark, which would include not only developing Terminal 2 of DMIA, but also linking it to Metro Manila via an airport express train service that will run from DMIA in Clark, Pampanga all the way to Buendia in Makati City.

He said that while it may take some time before the project takes off, he emphasized that an airport express service is needed if the Clark airport where to attract more foreign carriers.

“(The Philippines) is the only country which still does not have an airport express service,” he stressed.

Pangilinan told The STAR that the airport express project can be complementary to the P17-billion connector project that will be undertaken by MPIC wholly owned subsidiary Metro Pacific Tollways Corp. (MPTC). The13.2 kilometer elevated connector road project will run along the Philippine National Railway (PNR) tracks within the Manila Central Business District, from the end of NLEX at C3 to the beginning of Skyway 1 at Buendia and is projected to start in 2012.

“We do not know yet whether it is the connector road or the airport express railroad that will be constructed above the PNR tracks. We are thinking of three levels. On the ground will be the PNR rail system, and above it are the connector road or the airport express railroad. But the two projects will both use the PNR right of way,” he said.

 He pointed out that while the train project may compete in some way with the connector road project, he emphasized that what is needed is to bring in more people into Clark.

As envisioned, he said the airport express may have three stops – one in Balintawak, another in Espana, and one in Buendia.

Pangilinan noted that one of the requirements among foreign air carriers is for a train to travel 40 minutes from Metro Manila to Clark for them to locate at DMIA. “The speed of the train must be calibrated,” he said.

In an earlier interview, MPTC president Ramon Fernandez said it is very natural for the Clark airport to use the NLEX right of way for a possible high-speed rail.

“If you have an airport in the North, you need a high-speed rail that will bring passengers in and out of the airport,” he added.