CGD reveals sweet deal for Mactan airport
The government needs to get better in computing profits and guarantees.
Finance Secretary Carlos Dominguez III has been so wary of lopsided public-private partnership (PPP) deals entered by the Philippine government that he does not want the proposed Bulacan airport to fall into the same trap.
Dominguez told senators that he worries about the country’s ballooning continent liabilities, which have reached P309 billion in 2018 as far as PPP projects are concerned. This provides for potential claims by private firms who take on a public facility or infrastructure project.
The Cabinet official took the Mactan-Cebu International Airport as an example, where the contractor secured a no-competition clause and got the government to commit to a P20-billion payment should it approve a competing airport project in the area.
Dominguez also called for a “meticulous evaluation of projects” to properly assess profits, with the Mactan airport earning beyond the P752 million projection.
“And yet, government still made the commitment that there will be no other competing airports in Mactan and Cebu. Now, should the Government later on want to build a new airport in the area to serve our OFWs and other tourists, we would be required to reimburse not just market value of the infrastructure assets, but also the future profit of the commercial business until the end of the concession,” Dominguez said during the Senate hearing.
Choose your battles well!