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Thursday, July 25, 2024

The essence of the Bulacan airport project

The essence of the Bulacan airport project"A country like the Philippines needs great, not half-measure, projects."

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It is no surprise that the Bulacan airport project of a subsidiary of the SMC (San Miguel Corporation group – San Miguel Aerocity Inc.) is encountering a great deal of turbulence. The proposed airport cannot expect to experience a safe flight.

The opposition to the airport that shortly began to rise in the municipality of Bulakan principally comes from four sources. The argument of each of the opposing groups embodies validity.

One of the opposing groups – perhaps the most important one – has been attacking the Aerocity project from the not-unfamiliar standpoint of its impact on the public finances under the terms of the bill granting a franchise to the aerotropolis, San Miguel Aerocity Inc. would be exempt from any and all direct and indirect taxes and fees “during the project’s 10-year construction period,” and thereafter would also be exempt from income tax and taxes over its real estate, buildings and personal property. 

The oppositors believe that what the government is giving away to the project’s proponent is excessive, even granting the project’s value to the economy. Who knows – years from now a president with a mindset like Rodrigo Duterte will want the successors of today’s SMC leaders to be jailed for practicing economic sabotage against the government.

The second group of oppositors of the aerotropolis project is made up of technically minded people. They question the stability of the 2,500 hectares of Bulakan land on which the project will be constructed, which is along the shore of Manila Bay.

These oppositors that the land is slowly sinking and will continue to sink, so that at the end of the franchise period – 50 years, the government will be taking back a white elephant. This is a serious change, given the scale of the project and the fiscal benefits that the government is granting the project. I have not seen a rebuttal from the SMC group, but I like to think that a corporate entity with the reputation and professionalism of SMC would not embark on, and place before the Filipino people, a badly prepared and technically questionable project.

The third group of oppositors to the New Manila International Airport are the companies and investors involved in the quest for a solution to the airport problem of this country’s premier metropolis. Three alternatives have been offered to an inefficient, overcrowded and poorly located premier international gateway: a NAIA (Ninoy Aquino International Airport) upgraded and upgraded by a consortium of seven leading business groups, an expanded Clark International Airport and a rehabilitated and expanded (by reclamation) Sangley airport. 

Sensing a steady increase in public frustration over the government’s seeming inability to find a satisfactory solution to the NAIA improvement problem, SMC’s management, led by president and chief operating officer Ramon S. Ang, decided to start considering the idea of a new airport that would be fairly close to Metro Manila and that would deserve to be called the New Manila International Airport. 

After a long search for a location that was acceptable from the physical, technical and accessibility standpoints, the SMC group settled upon the historic municipality of Bulakan, which is close to the expressways from Metro Manila to Northern Luzon and would be accessible from Manila Bay.

The fourth group of oppositors to the aerotropolis project is made up of people, Filipinos and foreigners, who believe that the enhancement of NAIA plus the expansion of Clark International Airport would be sufficient to address the persistent NAIA problem and that there therefore was no need to construct a large new airport. 

JICA (Japan International Cooperation Agency), an astute financier of Philippine development projects, expressed this viewpoint in a 2016 study.

The New Manila International Airport project of the San Miguel Corporation group is by any measure a huge undertaking; a P735 billion price tag, 2,500 hectares of land, four runways, an initial passenger capacity of 100 million and a passenger terminal with an initial annual capacity of 12 million passengers. As stated previously, numbers like these are bound to attract critical interest and opposition.

But to dwell on these negative arguments is to lose sight of the essence of the project of Mr. Ang and his colleagues. The aerotropolis is nothing short of an audacious and forward-looking project. As the economist Joseph Schumpeter wrote, “Small is beautiful,” Yes, smallness can be beautiful, but for an aspiring developing country to grow at a faster pace, large, well-prepared projects are what are needed. 

A country like the Philippines needs great, not half-measure, projects. The New Manila International Airport represents the essence of a country’s making by economic strikes forward.


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