Palace dipping its fingers into Clark airport project?

CLARK FREEPORT, Pampanga , Philippines  – Does Malacañang have a special interest in who should construct the new passenger terminal costing about P6.5 billion at the Diosdado Macapagal International Airport (DMIA) here?

Some 300 employees of the Clark International Airport Corp. (CIAC) went out of their offices at around 3 p.m. yesterday to stage a noise barrage in protest of a proposal to allow a Kuwaiti firm to take over the airport project.

The Kuwait-based group, Al Mal, together with its local counterpart PRIME, is reportedly being pushed by Malacañang allegedly through Nestor Mangio, chairman of the Clark International Airport Corp. (CIAC), a CIAC source told The STAR. Mangio was in a board meeting yesterday and could not be disturbed.

“We stand to lose our jobs if such a takeover occurs,” said CIAC union president Marvin Pineda.

In late 2008, the CIAC’s joint venture special committee (JVSC) already rejected Al Mal’s proposal as “onerous.”

Initially, the CIAC put in place the so-called “competitive challenge scheme” to choose the contractor for the terminal.

Under the scheme, interested contractors were told to submit their project proposals to the CIAC, which would then pick out the best offer.

The offer would then be allowed to be challenged by other interested parties until the best is chosen. The Office of the Government Corporate Counsel approved the scheme, the first to be implemented in the country.

The joint venture will be a 70-30 partnership, with CIAC getting the 30 percent, according to the terms of agreement drawn up by the CIAC for the bidders.

Under the new scheme, the CIAC expressed “high hopes” sometime in April last year on the project after final evaluation of the proposal of the Pacific Avia Group Inc. (PAGI) to construct Terminal 2 of the DMIA.

In an interview early last year, Romeo Dyoco Jr., CIAC vice president for administration and finance and JVSC chairman, said his committee’s technical working group was assessing PAGI as the CIAC’s likely partner for the terminal project.

“Should PAGI pass the evaluation and eligibility check, it will then face competitive challenge from other interested parties who will also offer proposals to build, finance, design and operate the P3-billion to P7-billion Terminal 2 project as a joint venture project with CIAC,” he said.

The CIAC source, however, said the bidding on the Terminal 2 project was suspended after President Arroyo’s visit to the Middle East in May last year wherein she allegedly committed the project to Kuwait’s Al Kharafi Group, whose subsidiary is Al Mal. Mangio was with the President during the trip.

A Malacañang bulletin then also reported that the President had secured a $1.2-billion investment from Al Kharafi for the joint venture deal to build a new airport terminal and aviation city here.

The press release wrongly identified Al Mal as a subsidiary of PAGI, the source said.  

According to CIAC records, PAGI’s foreign partners included Selex, Egis and Leigthon, while its local partners were A.M. Oreta Construction Co., DHL Philippines, DRI Holdings, EGIS AVIA S.A., Pentagon Development Corp., Bank of Commerce, and Castillo Laman Tan Pantaleon & San Jose. There was no mention of any links with Al Kharafi.

CIAC officials, according to the source, were asked not to issue any statement on the new terminal project until the President had arrived from her Middle East trip.

Later, however, Victor Jose Luciano, CIAC president and chief executive officer, clarified that the CIAC had not made any commitment to any group.

Another source in the CIAC said former Trade and Industry Secretary Peter Favila had backed Mangio’s support for Al Mal.

During the President’s visit to the Middle East, Favila was quoted as saying that the Kuwaiti firm intended to invest $100 million to $300 million for the Terminal 2 project.

CIAC sources said the Kuwaiti firm’s proposal was onerous, including its plan to take over the DMIA’s Terminal 1 for $20 million for 25 years despite the terminal’s potential revenue of $120 million. 

Al Mal also reportedly wanted to have control of virtually the entire 2,500-hectare aviation complex at Clark in its bid to construct a second and third passenger airport terminal.