Vol. XXII, No. 95 [ BusinessWorld Online ]
Friday, December 5, 2008 | MANILA, PHILIPPINES
THE GOVERNMENT has cut by more than a third the budget for a planned airport terminal at the Clark Freeport in Pampanga, effectively reducing its capacity in line with the grim outlook for the global aviation industry.
Clark International Airport Corp. (CIAC) yesterday said the terminal will now cost P4 billion from P6.5 billion originally
As a result, the new terminal, expected to open in the first half of 2010, will have a capacity of at least three million passengers a year, less than the seven million initially planned.
"We want to be very conservative," CIAC President and Chief Executive Officer Victor I. Luciano said in an interview yesterday.
"We scaled down because of the times," he said, adding that airlines around the world are going through tough times as a result of the surge in oil prices for much of the year, and the global economic downturn led by the US.
Some airlines have already postponed the delivery of aircraft, slowing down in their expansion plans, he pointed out.
In a statement, CIAC Vice-President for Administration and Finance Romeo N. Dyoco, Jr., who is the chairman of the joint venture selection committee for the terminal project, also said the lower budget was meant to attract investors willing to built it.
A report by the International Air Transport Association late last month showed that Asia-Pacific carriers, which make up almost a third of global international passenger operations, saw passenger traffic decline by 6.1% in October, the second month of contraction in the region.
This was faster than the 1.3% contraction for global air travel in the same month.
Meanwhile, CIAC said four companies have expressed interest to build the terminal.
Mr. Luciano identified these as Pacific-Avia Group, Inc., R-II Holdings, Inc., SNC Lavalin International, Inc. of France and Samil PricewaterhouseCoopers of Korea.
He said the Pacific-Avia Group, SNC Lavalin International and Samil PricewaterhouseCoopers had submitted letters of intent, while R-II Holdings had submitted an unsolicited proposal for the project.
Pacific-Avia Group, Inc., the only local group out of the four, is composed of A.M. Oreta Construction Co., DHL Philippines, DRI Holdings, EGIS AVIA S.A., Pentagon Development Corp., the Bank of Commerce and Castillo Laman Tan Pantaleon & San Jose.
"They are very serious. They look like very solid companies," Mr. Luciano said.
Last month, CIAC disqualified Admiral Energy LCC, the original winning bidder for the project, after the US-firm failed to find an experienced airport operator for a partner, one of the major criteria for the contract.
Mr. Luciano said the new companies interested in the project must undergo a 30-day evaluation by the government before these are chosen.
CIAC is no longer holding an auction and will instead accept unsolicited proposals, from which it will select the best offer.
Under the deal, whoever gets the contract must design, build, finance and operate the new airport.
The facility is part of the government’s bid to develop Clark as the country’s next international gateway.
Clark’s present terminal at the Diosdado Macapagal International Airport can hold two million passengers yearly.
In comparison, Manila’s airport system has a combined capacity of over 30 million passengers a year.
Officials have said Clark has more room for growth than Manila, with around 4,200 hectares of land that can be used for expansion.
Manila’s airports have filled up the 700 hectares available in the capital.
Clark also has two full runways with room to build two more, compared with Manila, which only has space for one runway. — Paolo Luis G. Montecillo
