Not worth it

Gov. Jonvic Remulla and the Cavite provincial government took the right step in scrapping the Sangley Point International Airport (SPIA) project. The P500-billion China-backed project was controversial from the get go, primarily over national security concerns relating to the involvement of a Chinese state-run firm in a big-ticket airport undertaking so close to the nation’s capital and seat of power, so the announcement that the deal is off is a laudable development.

On Feb. 12, 2020, the Cavite provincial government awarded the project to the consortium of the state-run China Communications Construction Co. Ltd (CCCC) and taipan Lucio Tan’s MacroAsia Corp. to build the first phase of the airport. Envisioned to decongest the Ninoy Aquino International Airport, the SPIA was to serve up to 130 million passengers a year, four times the capacity of the country’s main gateway.

But close to a year since the project was awarded, Remulla said the consortium had yet to submit post-award requirements and correct defects in the joint venture documents despite numerous extensions. “We saw it as a sign that they were not fully committed to the project,’’ he said.

Remulla approved a Jan. 26, 2021 recommendation by the provincial Special Selection Committee to scrap the award. MacroAsia subsequently reported to the stock exchange that the notice of selection and award had been cancelled.

The selection process, seen as skewed from the start for the Chinese, was among the deal’s many red flags. Documents such as the feasibility study and draft joint venture agreement issued to potential bidders indicated the involvement of China state firms, and the project was early on identified as among the deals covered by an agreement signed on Nov. 20, 2018 between Manila and Beijing during Chinese leader Xi Jinping’s visit to Manila.

As though by design, the bidders were also given a rushed time frame of only about two months to submit the requirements. The other proponents—infrastructure giant Metro Pacific Investments Corp. and billionaire Manuel Villar Jr.’s Prime Asset Ventures—backed out, leaving the CCCC-MacroAsia consortium as the sole bidder.

From 2011 to 2017, the CCCC was blacklisted by the World Bank for fraudulent activities. One of its subsidiaries, CCCC Dredging (Group) Co. Ltd., also built China’s illegal military installations on islands seized from the Philippines in the West Philippine Sea (WPS). The Philippines, in effect, was about to reward with a lucrative contract the very same Chinese company that had thrashed its islands in the WPS.

Another catch: The SPIA was to be funded through borrowings from the state-owned China Development Bank, raising the specter of onerous debts to China that had earlier been raised over another controversial mammoth project, the Kaliwa Dam in Tanay, Rizal.

But the primordial risk had to do with national security. As reported by Miguel Camus in this paper, Remulla was extensively briefed on the security threats posed by the participation of Chinese entities in the airport project at Sangley Point, which is home to the Major Danilo Atienza Air Base, a strategic base built by the Americans and is now controlled by the Philippine Air Force and Philippine Navy.

“Sangley Point is located in Manila Bay and only eight miles southwest of the capital,” a security expert pointed out in the report. “The strategic location allows it to act as defender against any security threats at sea against the central government.’’ China’s interest in Sangley Point seems of a piece with the curious desire by Chinese investors for other strategic land features around Philippine waters. Chinese firms, for instance, have also proposed developing Grande and Chiquita islands in Subic, Zambales, and Fuga Island in Cagayan province into economic and tourism zones, but critics warn that all these are tied up with China’s design to fortify its sweeping claims to the South China Sea, including the WPS.

Chinese inroads into vital Philippine infrastructure and economic interests have stepped up, from China-backed Dito Telecommunity’s agreement with the Armed Forces of the Philippines to build telecom towers inside military camps, to the State Grid Corporation of China’s ownership of 40 percent of the National Grid Corporation of the Philippines, which operates the country’s power lines.

The scrapping of the Sangley Point airport project represents one less national security worry at this point. Remulla said the province would rebid the project, because “I still believe that a new international airport is important for the country.” Certainly—but good to know that a local chief executive had the keen sense to understand that a grandiose project touted to be beneficial to his province, but one compromised and riddled with red flags from the start, wasn’t worth it.