Philippines' Sangley airport deal seen as favouring China

Construction under way at the Sangley airport in Cavite City, 35km south of Manila. A plan to develop Sangley Point International Airport in the area is being questioned by people who have reviewed documents of the joint venture between a consortium and the Cavite provincial government. - Richard Reyes

MANILA (Philippine Daily Inquirer/ANN): A plan to solve congestion at Manila’s international airport could soon transition from just a dream to reality with the US$10-billion Sangley Point International Airport (SPIA) project that will rise near the entrance of Manila Bay, some 35km from the capital.

But indications that the project would be awarded to a consortium that includes state-run China Communications Construction Co (CCCC) raise questions on the joint venture selection process that the provincial government of Cavite launched last October.

People who reviewed the joint venture documents and feasibility study said these showed that a Chinese partner was favoured from the beginning. The Inquirer has also seen copies of the documents.

The sources included groups that decided to back out due to what they described as the project’s subjective criteria and a rushed selection process.

Instead of at least six months to a year, bidders were given just more than two months to prepare proposals before the deadline on Dec 17,2019. At the time, the Cavite government had wanted to hold a groundbreaking ceremony early this year.

“It was clear to us that the project is really for China, ” said someone who had seen the documents.

Another source called the deadline unrealistic.

On Dec 17, it was disclosed that CCCC had joined forces with MacroAsia Corp, an aviation services firm of Philippine Airlines owner Lucio Tan, in what became the sole consortium vying for the project.

Six other groups, including infrastructure giant Metro Pacific Investments Corp and billionaire Manuel Villar Jr’s Prime Asset Ventures, dropped out of the race.

Should the CCCC-MacroAsia consortium win the project, it will be the joint venture partner of the Cavite government, which wants to transform the former US naval base into a world-class air hub serving more than 100 million passengers a year, three times the design capacity of Manila’s Ninoy Aquino International Airport (Naia).

SPIA is not the only project aimed at decongesting Naia. San Miguel Corp plans to build an international airport in Bulakan, Bulacan province, about 50km north of Manila, which would have a capacity of up to 100 million passengers a year.

The Cavite government, which is evaluating CCCC-MacroAsia’s proposal, dismissed allegations that any group was favoured.

A review of the documents, however, confirmed the reservations raised by some of the participants.

There were many direct references to the Chinese government’s planned involvement in the project from its feasibility study dated July 2019 to the draft joint venture and development agreement issued to potential bidders starting Oct 11 last year.

For one, the feasibility study already assumed the project would be a partnership between the Philippines and China, as the airport was one of the projects between the two countries under the Memorandum of Understanding on Cooperation on the Belt and Road Initiative, which was signed on Nov 20,2018, in Manila, the study said.

The Belt and Road Initiative is a US$1-trillion commitment by China to connect Asia, Africa and Europe through new land and maritime projects.

Critics contend the programme is an avenue for China to exercise debt-trap diplomacy in which it gains strategic concessions from borrowers that default on their loans.

Showcase projects like SPIA will be mainly funded by borrowings and assumptions made in the feasibly study showed that 98 per cent of the project’s debt or equity will flow from the Chinese.

The study noted that China Development Bank, which is under the direct control of the State Council, will finance 75 per cent or 413.25bill pesos of the estimated project cost of 550bil pesos.

The loan will have a 25-year term, including a 10-year grace period, with an interest rate of 2-3 per cent annually.

Chinese state-owned enterprises will provide 126.7bil pesos in equity financing, or 23 per cent, the study said. - Philippine Daily Inquirer/Asia News Network

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Philippines , Sangley , airport , china


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