Fraport to drop Chengs to save face, investment?

FRAPORT ON RETREAT: We're amazed at the fighting spirit of the Chengs who control the Philippine International Air Terminals Co. (Piatco) that is finishing and preparing to operate Terminal 3 of the Ninoy Aquino International Airport.

Considering that some $500 million has been reportedly sunk into the controversial project, we understand their tenacity, especially of their vice president Moises Tolentino Jr. who is carrying on the propaganda fight almost single-handedly.

Unfortunately for the Chengs, their main associate and financier, Fraport AG of Germany, does not seem to be made of the same stern stuff. Faced with a political storm back in its home state of Hesse, Fraport appears ready to throw in the towel.

Fraport looks desperate to sell its problem to the Philippine government for $300 million (make that $400 million, counters Malacañang!). If the government does not have the money, Fraport is even willing to lend it whatever sum is needed.

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GO DOWN FIGHTING?: The only thing Fraport wants in return, we were told, is for it to be allowed to bid for the management contract for Terminal 3 and thereby get a chance to recover face and investment.

To lay the basis for its obvious desire to work with Fraport, Malacañang is busy making life difficult for Piatco to force it to give up. Part of the pressure tactics is to rake up onerous contract provisions and threatening action on violations of the terms.

A bloodied Piatco (the Chengs) might just follow Fraport to the exit and sell their part of the problem. But it's too early to tell. It could also happen that, true to the fighting spirit shown by Tolentino, the Chengs might opt to go down fighting.

If they decide to hang on, the concluding battles would be fought in the courts and the backroom. When Piatco insists on the execution of its contract, the picture might change a bit as Fraport, already pressed for time, may not want to sit out a protracted legal battle.

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SHIFT TO CLEANER FUEL: On the energy and transportation fronts, it is full steam ahead for natural gas not only for power generation but also for running motor vehicles.

Coordinated moves of the government and the private sector point to a developing bias against dirty, sooty toxic fossil fuels in favor of cleaner-burning energy sources such as natural gas and derivative fuels.

The international community called for the shift to clean fuels during the recent UN-sponsored World Summit on Sustainable Development at Johannesburg, South Africa.

Time magazine reported in a recent issue: "The need to diversify (from fossil fuels) is now more urgent . . . Global energy demand is expected to triple by mid-century. The earth is unlikely to run out of fossil fuels by then, given is vast reserves of coal, but it seems unthinkable that we will continue to use them as we do now for nearly 80 percent of our energy. It's not a question of supply and price or even the diseases caused by filthy air. We know that global warming from heat-trapping carbon dioxide threatens to cause chaos with the world‚s climate."

The National Geographic chimed in: "An estimated three million people die annually from the effects of pollutants that result from burning fossil fuels. Children in the developing world's mega cities are the hardest hit, often inhaling two to eight times the amount of pollutants deemed safe by the World Health Organization."

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GAS-POWERED VEHICLES: The government must have heard the alarm bells. The Department of Energy has released details of a plan for the development of the downstream natural gas industry, saying at least 30 firms are willing to invest in such ventures.

This after President Gloria Macapagal Arroyo instructed DoE to start developing the "non-power" application of natural gas starting this year, initially with the conversion of government cars into compressed natural gas-powered vehicles. (Also see Postscript discussion of Aug. 25-27, 2002, on CNG as motor vehicle fuel.)

Several government agencies, including the Department of Environment and Natural Resources, have shown interest in converting some of their vehicles to use CNG for fuel.

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DEVELOPMENT PLANS: Energy Secretary Vincent S. Perez Jr. said these companies have agreed on a three-module plan detailing options for the development of the country's natural gas sources.

Module-1 includes the Batangas Manila (Batman I) pipeline involving the Sucat plant's conversion to run on natural gas. Up for discussion is whether to sell the pipeline separately from the plant or sell them in one package.

Module-2 is the Bataan Manila (Batman II) where the Limay plant will be sold to a private operator on condition that the new owner will convert the plant within a short period into a CNG facility.

Module-3 involves facilities using liquefied natural gas to fuel vehicles. The conversion will start with buses, and later include private cars.

The DoE is working closely with the Board of Investments to include public transport groups in its Investment Priorities Plan to motivate them to field vehicles running on natural gas.

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BUS FIRM TAKES LEAD: Perez said California Bus Lines has expressed intention to acquire 100 new buses that run on CNG.

"The CBL said it would acquire new CNG-fueled buses to ply Metro Manila routes," the secretary said. "The group wanted, though, that they be granted some incentives."

Perez said his department will lay down guidelines on standards for transport groups converting their vehicles to run on CNG. Aside from being applied on buses, taxicabs and jeepneys, the standards will also cover private vehicles.

The DoE and the state-owned Philippine National Oil Co.-Energy Development Corp., in coordination with the Land Transportation Office, have already conducted emission testing for the country's first 100-percent CNG-powered bus.

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LESS CARBON TO BURN: Natural gas – although a hydrocarbon – has been called the "green fuel" because it is generally considered the cleanest fuel for power generation.

"Theoretically, natural gas can meet 40 percent of the country's power requirements," said Facundo Roco, deputy managing director of Shell Philippines Exploration BV, the developer of the $4.5-billion Malampaya Deepwater to Gas Project.

Our natural gas is largely methane (CH4, or one carbon for every four hydrogen ions), with smaller amounts of propane (C3H8) and butane (C5H12). Propane and butane are separated from the methane and sold at a better price – propane as LPG (liquefied petroleum gas) and butane as propellant for aerosol products.

With less carbon to burn, methane emits less carbon oxides. This makes methane a cleaner fuel than the heavier hydrocarbons whose gaseous wastes (such as carbon monoxide) end up as poison in the air.

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ePOSTSCRIPT: You can read Postscript in advance, even before it sees print, simply by going to our personal website http://www.manilamail.com. While at our ManilaMail.com site, you can also peruse back issues of our column and review past discussions on certain subjects. Email can be sent to us at [email protected].