Modernizing the Naia

The interest generated among the country’s tycoons by the proposed modernization of the old Ninoy Aquino International Airport should prod the government to work double-time to speed up its flagship public-private partnership program. With only a handful of projects actually awarded to the private sector, the government needs a big push in this department.

The Naia was one of eight PPP projects that the government announced it would fast-track in 2012. No less than President Aquino announced during a Philippine investment forum in Makati City that his administration intended to roll out eight projects in that year and that he wanted to accelerate the PPP program itself. Mr. Aquino told the gathering that he had instructed the Cabinet economic cluster and the National Economic and Development Authority to hasten its review of pending PPP project proposals; he specifically cited airports as being “very, very essential,” and singled out the Naia, which, he pointed out, was approaching saturation level.

However, it was only last July 21 that the Neda Investment Coordination Committee endorsed the Naia PPP project for final approval by the Neda board, which is chaired by the President. The P74.56-billion Naia development project seeks to transform the Philippines’ main international gateway into a “world-class modern airport facility.” The winning bidder of the airport project will upgrade the existing terminal to increase capacity and handle the operations and maintenance—except air traffic services—to increase operating efficiency and improve quality of services.

Indecision on the government’s part is also to blame for many of the delays in the PPP program. For instance, investor interest in the premier gateway has been ramping up only recently because of statements coming from the Department of Transportation and Communications, to the effect that a new international airport in Sangley Point, Cavite—a project aimed at replacing the congested Naia

—might not be implemented within Mr. Aquino’s term.

The need to upgrade Naia Terminal 1 is terribly long overdue. The terminal reached capacity as early as 1991, when it hit a total passenger volume of 4.53 million. A Filipino tourist will really feel sad comparing the Naia with international terminals in other Asian countries: Terminal 1 will be at the bottom due to its outdated facilities that lead to passenger discomfort and overcrowding.

Moving forward, upgrading the Naia will not be enough. A 2014 study conducted by the Japan International Cooperation Agency (Jica) showed that the three Naia terminals could no longer accommodate another round of increases in passenger traffic this year. Jica said the Naia would “totally be capacity-saturated in 2015 and not be able to cater to the increasing passenger demand anymore.” The report added that by this year, the airport would be handling 38 million passengers, the bulk (21 million) of which would be domestic traffic, while the remaining 16.46 million would be international passengers. Come 2040, the Naia’s passenger traffic would reach 102 million. As of end-2013, the airport’s annual passenger traffic reached 33 million from 32 million in 2012. The ideal capacity of the Naia’s three terminals is 30 million passengers a year.

The Naia development project aims to transform the Philippines’ main gateway into a world-class facility that Filipinos can be proud of, not embarrassed, every time they send off or welcome relatives or friends. Also, the government has been boosting efforts to lure more visitors with catchy slogans like “It’s more fun in the Philippines.” The country will need a world-class modern airport facility to do this.

The country needs an upgrading of not only the Naia but also the other airports scattered across the archipelago. As the President noted in 2012, there was a need to really expand the country’s gateways, and while there were limitations as to how the government could expand the existing airports, this should not stop us from having the facilities available for tourists. He also emphasized that tourism was the very low-lying fruit that had yet to be picked.

As the President likewise said in 2012, there has to be more speed in giving a thumbs-up or a thumbs-down to all the PPP projects under consideration. “We cannot afford to think for decades upon decades,” he said. Indeed, the Philippines is missing opportunities that are there for the taking.