On an unholy hour last week, while most of the country was asleep, Cavite Gov. Jonvic Remulla made a surprise announcement that the Cavite provincial government has junked the proposal of Lucio Tan’s MacroAsia Corp. and China Communications Construction Co. Ltd. (CCCC) to develop the Sangley International Airport at a cost of $10 billion.
By daytime last Jan. 27, Remulla’s announcement, posted at 3:45 a.m., had spread like wildfire. As soon as the stock market bell rang, MacroAsia’s shares tanked as much as 19 percent to a three-month low in the first 10 minutes of trade following the cancellation.
What a morning it must have been for MacroAsia president Joseph Chua, the son-in-law of the taipan.
One wonders what happened?
Remulla said MacroAsia and partner CCCC failed to comply with the requirements. There were “various deficiencies” in their submissions, he said in his Facebook post.
Because of this, the Cavite government, the public sector proponent of the project, would look for “a more qualified partner” hopefully by October.
He did not specify these deficiencies so I asked around.
The business grapevine talked of two main issues – the financial capability of the joint venture and CCCC’s involvement in the project.
On the financial capability, nobody is doubting that Lucio “Kapitan” Tan, at one time the country’s richest man, has the financial capability to back the ambitious airport project. It’s also no secret that the taipan, in the past, wanted to be part of an airport development. Wasn’t he one of the pioneers of the Asia Emerging Dragon, the group of taipans who proposed to develop NAIA Terminal 3? His group was also part of the more recent but now dissolved NAIA Consortium.
But would Tan actually pour in his billions into the Sangley project? The Cavite government wants an assurance in this regard, so I heard.
The $10-billion Sangley Airport project isn’t cheap although Kapitan certainly has the financial muscle for it but he has remained quiet since the joint venture submitted the proposal. Soon after MacroAsia won the bid in February this year, Tan’s holding company, LT Group, simply said that if the airport project is presented to the LTG’s management and board, it will be subjected to the same “vigorous review and assessment applied to all similar proposals.”
Perhaps at this time, the taipan is focused, on saving his four-star airline, the country’s flag carrier Philippine Airlines, which is struggling to recover amid the negative impact of COVID-19 on air travel.
On CCCC, it’s no secret that the company had been blacklisted by the United States for its role in constructing and militarizing artificial South China Sea islands. The Cavite government, I heard, didn’t want any of these controversies hanging over the project.
Chua, who has been entrusted with important roles in the Tan empire – from directorships in different Tan-owned companies to being head of MacroAsia – will either repackage MacroAsia’s proposal or throw in the towel.
Sources said there is a meeting among all stakeholders in the coming days, MacroAsia included. MacroAsia will likely submit a better offer, sources believe.
Three years ago, I sat down with the Sangley Airport guys from the Cavite government side to listen to their grand plan about developing a new Philippine airport. The excitement in the air was almost tangible as they discussed with awe the blueprint for Sangley – a 26-page powerpoint presentation.
But now, it’s clear that the rejection is a major setback for the project.
Who is next for NAIA?
It’s no different over at the Ninoy Aquino International Airport. Its redevelopment also faces another delay.
Megawide is out of the picture after the Manila International Airport Authority rejected its offer and then its motion for reconsideration. The next in line is the proposal of Philippine Airport Ground Support Solutions Inc. (PAGSS) led by Filipino-Chinese businessman Jeffrey Cheng, who was also part of PIATCO consortium that bagged the controversial NAIA Terminal 3 project in 1997.
Ramon Ang of San Miguel Corp. is also looking to do the operations and maintenance (O&M) for NAIA while building his planned Bulacan airport.
There’s been no word from MIAA on PAGSS’ proposal as of this writing and on Ang’s O&M offer so for now, it’s a wait-and-see game for both Sangley and NAIA.
In the end, the government may end up just redeveloping and operating NAIA, if Cheng or Ang or any other tycoon does not get the project. This isn’t necessarily bad as long as the government can really improve on many of the choke points and provide world-class and efficient service to airport users.
But I wonder who will do Sangley. There were several groups interested in Sangley in the past including the group of billionaire Manuel Villar, the Gotianuns, Megawide and Cheng’s PAGSS too.
Perhaps, it will continue to be a race among tycoons not just for NAIA, but for Sangley as well. Will Filipinos’ interest be in the mind of whoever reaches the finish line? I fervently hope so.
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Article and Photo originally posted by Philippine Star last February 1, 2021 12:00am and written by Iris Gonzales.
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