Firm asks agencies to explain P17.5B

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Tuesday, December 31, 2013

A TRAVEL agency urged the Department of Transportation and Communication (DOTC) and Mactan Cebu International Airport Authority (MCIAA) to give the public a breakdown of the P17.5 billion airport services privatization budget because of allegations that the amount was bloated.

Businessman Bobby Lim Joseph, the consul general for Latvia and chairman emeritus of the National Association of Independent Travel Agencies (Naitas), said P17.5 billion is such a big amount that the Filipino people in general and the Cebuanos in particular will pay in terms of airport fees.

Records showed that on July 28, 2011, the Korean International Cooperation Agency (KOICA) conducted a second presentation of its feasibility study for the new passenger terminal building that will cost US$180.7 million ($134.6 million for the first phase and $46.1 million for the second phase).

At P42 per US dollar at that time, the P180.7 million was equivalent to P7.8 billion for the entire project. At present, the dollar-peso exchange rate is at P44.

Joseph said KOICA’s cost estimate is authoritative because it is the one that conducted the feasibility study on improving Mactan airport’s facilities.

Records showed that the Korean Government even spent US$1.1 million for the feasibility study as a grant, and no repayment obligation on the part of the Philippine Government.


Joseph, an adopted Cebuano as per Cebu Provincial Board resolution authored by then board member, now Vice Gov. Agnes Magpale, said P17.5 billion is such a highly questionable figure considering that the airport terminals are already there and all they need are improvement and expansion.

“What equipment are they going to install at Mactan airport? Why will the government turn it over to the private sector when it can afford to undertake the project at P7.8 billion as recommended by Koica?” Joseph said.

When sought to comment, Villarete denied any bloating of figures in the project which will be implemented through Public-Private Partnership (PPP) of the Aquino administration.

Villarete said that DOTC conducted the technical review of the project, while the financial and economic viability was reviewed by the Investment Coordinating Council (ICC) of the National Economic and Development Authority (Neda).

It was deliberated by the ICC Cabinet before this was approved by Neda. If somebody thinks the amount is bloated, then they should look at the process, Villarete said.

On the other hand, Villarete also clarified that only the operations of the parking area, domestic and international terminals and the romps will be privatized and will not include the rest of Mactan Cebu International Airport.

Villarete said the other parts of the airport like the entire airfield, General Aviation, and the areas outside the terminal buildings rented by various firms are not included.

Villarete said that even if services in the terminal buildings, romps and parking areas will be operated by a private entity, MCIAA is still there as a regulatory body.


Lawyer Clarence Paul Oaminal said airport operations is complicated because the presence of other agencies are important such as the Philippine National Police (PNP), Philippine Overseas Employment Administration (POEA), Office of the Workers Welfare Administration (OWWA), Bureau of Plant Quarantine, Bureau of Quarantine (under the Department of Health), Bureau of Customs (BOC) and the Bureau of Immigration (BI).

“This is the reason airport service is inherent in government and should not be turned over to any private entity,” Oaminal said.

On the other hand, Medellin Mayor Ricardo Ramirez urged Cebu Gov. Hilario Davide III to make public his stand on airport privatization considering that he is a leading member of the MCIAA Board.

Ramirez said he cannot understand why Davide who styled himself as an advocate for transparency and good governance will keep his silence at this time when the Cebuano public are expressing their opposition to the privatization of Mactan airport by the Aquino administration.

Published in the Sun.Star Cebu newspaper on December 31, 2013.

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