By FLORO L. MERCENE
Finance Secretary Sonny Dominguez did the country a favor scrutinizing San Miguel Holdings Corp.’s (SMHC) Bulacan Airport project. He explained in Senate hearing September last year that the DOF had backed rather than blocked SMHC’s unsolicited proposal to build a new international airport in Bulacan. The DOF support and the National Economic and Development Authority (NEDA) approval set in motion the Swiss Challenge in April this year.
Dominguez suggested that the DOTr execute a joint and several liability agreements that would have SMC a deeper capital base as SMHC stands behind the project.
SMHC’s total equity in 2016 was only P60 billion, deemed insufficient given that the usual financing mix of 70 percent debt and 30 percent equity for a Public-Private Partnership (PPP) project would require the company to shell out at least P200 billion for the P735-billion New Manila International Airport (NMIA) project.
Dominguez’s initial concerns includes the financial capability of the proponent to which he himself offered a solution; the effect of the project on traffic in the area and any additional infrastructure that need to be built to avoid congestion; and its effect on the real estate value of New Clark City in Central Luzon, funded with government money.
Dominguez worries that an airport in Bulacan would create added financial burden on future generations since the government has committed there would be no other competing airports to ensure the profitability of concessionaires, similar to the Cebu-Mactan international airport scheme.
If the income is not as predicted, the government would need to reimburse them for both the market value of infrastructure assets and all future profits of the commercial business.
However, the Alliance of Concerned Teachers (ACT) party-list Rep. Antonio Tinio pointed out that Ang has strategic interests in power, transportation, infrastructure, agriculture, among others, that all need to be protected. He pointed out that speaker-aspirant Rep. Lord Allan Velasco is “closely associated” with Ang.
A speaker indebted to Ang would have to compromise his principles and shields Ang’s businesses from the government’s claims and regulations.
Tags: Floro L. Mercene