San Miguel Corporation - Engineering & Construction bid for 3 airport projects in the Philippines

Philippines—Diversifying conglomerate San Miguel Corp. is investing about $300 million to modernize and set up new tourism amenities at the Boracay Airport; the main gateway to the world-famous Boracay Island.

The conglomerate also plans to participate in the public bidding for the public-private partnership airport contracts for Palawan, Bohol and Caraga (Agusan).

The three airport projects were cited by President Aquino on Saturday during the inauguration of the SMC-backed Caticlan airport rehabilitation.

“When we join the bidding, the price becomes reasonable, so we’ll participate in all of them,” SMC president Ramon S. Ang told reporters at the sidelines of the inauguration of the airport project. It was earlier reported that SMC was likewise interested in the NAIA 3 airport terminal privatization.

By the time the Caticlan modernization project is completed by December 2013, it will accommodate three million tourists a year from only 500,000 at present. “We invested here because we saw the potential that we can contribute to [boost] tourist arrivals,” Ang said.

Over the last seven months, SMC has spruced up the Caticlan airport but it would take at least two more years to complete the major upgrading, Ang said.

The $300-million investment will include not only the upgrading of the airport itself but the construction of new amenities like a 5,000-room budget hotel, a world-class convention center and a retail complex that will showcase local souvenirs and a row of seafood restaurants. The tourism amenities, Ang said, would be managed by local operators.

“The airport will make Boracay a more affordable holiday destination for many Filipinos,” Ang said. With the upcoming improvements, he said there would be more regional and domestic flights to Boracay, in turn pulling down airfare costs per passenger from as much as P16,000 during the peak season to as low as P1,500 to P2,000.

The Caticlan airport is envisioned to be at par with the best airports in the region, with its runway planned to be extended from 950 meters to 2,500 meters. The width of the runway will also be doubled to 60 meters, allowing Boracay to handle regional and night landing. Flight volumes are targeted to increase by at least 30 percent.

Airport systems will likewise be streamlined for bigger volume of passengers while departure lounges will be improved. Based on the blueprint, it will also have a jetty port that can handle two international cruise liners at a time, allowing a more efficient transfer to Boracay Island.

To support Boracay’s green initiatives, Ang said the conglomerate would invest in a major water-treatment plant.

Asked whether SMC would start collecting higher terminal fees to recover its investment, Ang said there was no plan to do so as investment could be recovered from other businesses like hotel and retail operations. “We’ll keep the terminal fee affordable,” he said.

He said many international carriers were very much eager to fly to Caticlan once the rehabilitation has been finished.