* This is my article in
BusinessWorld on July 11, 2019.
As argued in previous columns, I advocate integrated
Public–Private Partnership (PPP) — construction then Operations and Maintenance
(O&M) all done and financed by one private entity — and not hybrid PPP —
construction via foreign loan or national budget, O&M by local private
entity. I like the development in some provincial airports that become bigger,
more modern international airports, privately owned and managed, and helping
attract more foreign tourism, investments and commerce.
I saw a paper, “Airport ownership, economic regulation
and financial performance” (2016) by the Airports Council International (ACI).
(See Table.)
ACI made four policy recommendations:
• No “one size fits all” approach to airport ownership;
• Create economic incentives and guarantee consistency in
regulatory frameworks;
• Evidence-based policy making, and
• Fostering entrepreneurship and value creation.
Good. Private ownership and management of airports is
consistent with attracting more private investors and traders, local and
foreign.
Among the big, modern and privately owned airports in the
Philippines are the Mactan-Cebu International Airport (MCIA) and, soon, the
Davao or Francisco Bangoy International Airport (FBIA).
There are just some twists here. While the international
airport is privately owned for 25 or 30 years or longer (after which it will be
government-owned), there are government agencies that will “control, supervise,
construct, maintain, operate and provide such facilities or services…”
These agencies are the Civil Aviation Authority of the
Philippines (CAAP) for other provincial airports, the MCIA Authority (MCIAA, RA
6958 enacted in July 1990) and, soon, the Davao International Airport Authority
(DIAA) under SB 2168 and waiting for President Rodrigo R. Duterte’s signature
to become a law.
This seems confusing because the private owners of the
new international airports are supposed to have overall control and management
of the passenger terminals, the runway and plane taxi bay, etc. But there are
government agencies that, on top of the functions quoted above, have the power
to:
“Acquire, purchase, own, administer, lease, mortgage, sell
or otherwise dispose of any land, building, airport facility, or property of
whatever kind and nature, whether movable or immovable… levy and collect dues,
charges, fees or assessments for the use of airport premises, works,
appliances, facilities or concessions, or for any service provided by the
Authority…”
The implementing rules and regulations (IRR) of such laws
can be complicated but must clearly delineate where a government agency, its
national and local bureaucracies, can or cannot intervene, in facilities and
structures that were entirely built and funded by the private sector.
While the private sector has the incentives to develop
modern international airports that they will operate for two to three decades
or more, local and national bureaucracies do not have similar incentives as
their outlook is short-term, dependent on their appointment for six years or
less by the administration in power.
Let us hope that more investors, local and foreign, will
expand current small provincial airports into big and modern international
airports. More accommodating, more visitors-friendly international airports are
often the gateway to more foreign tourism, trade and investments into the
country.
So we wish for more modern, privately owned international
airports and less-interventionist airport authorities and other government
agencies, local and national. We expand the wish-list to include more budget
terminals charging lower terminal fees, alongside main terminals by private
contractors and airport owners; more airlines competition via the amendment and
liberalization of the Public Service Act; and, abolition of the travel tax. The
Philippines seems to be the only country in East Asia that penalizes its own
citizens for travelling abroad.
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