Wednesday, November 14, 2012

Iata cautions PHL, two other countries vs private-sector development of airports

The Philippines, Vietnam and Indonesia were urged by the International Air Transport Association (Iata) to go easy in tapping private investment in the development of airport infrastructure, noting that many mistakes had been made when engaging the private sector in airport development.
The statement, attributed to Tony Tyler, Iata director general and CEO, appeared in Capa, a leader in global aviation knowledge that also delivers market analysis, data and information services.
Tyler noted that private investment in the development of airport infrastructure is an “emerging trend” in
the Asian region.
He suggested “cross-border regional thinking” for the development of Asia Pacific’s air traffic-management infrastructure.
The country came under Tyler’s notice after Philippine Airlines (PAL) and San Miguel Corp. President Ramon Ang said he would present to President Aquino in January 2013 a proposal to build a separate international airport near Manila.  Ang’s statement was corroborated by CIMP Group, a regional universal bank operating in high-growth economies in the Association of Southeast Asian Nations (Asean), which recently bought part of the San Miguel Group’s stake in Bank of Commerce, according to InterAksyon.com, online news of TV5.
“The permanent solution for the congestion at Manila Naia may ultimately come from a private-sector proposal by San Miguel Corp. to the government to build a completely new airport on the outskirts of Metro Manila, in the province of Bulacan,” CIMB said.
The planned international airport is about 45 kilometers northwest of Makati City, and closer to Metro Manila than the Clark International Airport, which is 100 km from Makati, the report said.
“The Bulacan airport will also be linked to the Makati business district via a six-lane ‘skyway,’ suggesting that access will be via an elevated highway in order to bypass Manila’s infamous traffic congestion,” it added.
Ang had said the new airport will have four runways and will span 2,000 hectares.
The San Miguel group had also proposed to the government a new line of the light-rail transit— the so-called MRT 7— that would run from North Avenue in Quezon City to San Jose del Monte in Bulacan.
According to the CIMB report, San Miguel’s plan is to have the new airport completed by 2015, with PAL potentially contributing $500 million to the project together with SMC and other investors.
“A formal submission to the Philippine government will be put through in early 2013, with construction planned to begin in the later part of 2013 together with a South Korean contractor,” the Malaysian bank said.
Tyler also noted that the Korean government was considering private-equity participation in Incheon airport, saying: “I am not advocating for or against private participation. But there have been enough mistakes made when engaging the private sector in airport development.”
He said these mistakes should not be repeated.
“When governments work with private investors to develop infrastructure, they must establish an effective economic and service-level regulatory framework to ensure that the national interest is well protected. That means ensuring that air connectivity is both cost-effective and efficient,” said Tyler.
He cited the example of Delhi Airport, where the 46-percent concession fee is making the airport unaffordable for airlines. Despite several appeals from the industry, the Airport Economic Regulatory Authority approved an increase of 346 percent. 
“We must not repeat the mistakes made in Europe where efforts to implement a Single European Sky are stalled because states are not delivering,” he said. 
The annual cost of airspace fragmentation to the European economy is estimated at over €5 billion annually and the cost to the environment is 16 million tons of carbon-dioxide emissions. 
Tyler urged the industry to take on a leadership role in the further development of a regional approach to traffic management in Asia Pacific.
“Aviation is a vital part of Asia’s economy, supporting 24 million jobs and nearly half-a-trillion dollars of GDP. Connectivity, facilitated by aviation, is a critical link to markets and a generator of wealth—both material and of the human spirit,” said Tyler, speaking to delegates at the Association of Asia Pacific Airlines Assembly of Presidents in Kuala Lumpur last weekend.

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