Gov’t Won’t Privatize NAIA But Open To Private Mgt. Deal

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The Marcos administration intends to privatize the operations and maintenance of the Ninoy Aquino International Airport (NAIA) while keeping its assets under government control, Transportation Secretary Jaime Bautista said on Tuesday.

Bautista issued the clarification after President Ferdinand Marcos Jr. on Monday said the NAIA, the country’s main gateway, would not be privatized.

Mr. Marcos said “a private firm cannot own the airport” during a televised interview with broadcast journalists Monday night.

“What the President means is that we will not give it to the private sector, the assets of NAIA. What he wants to convey is, it’s the private sector who will manage the operations through a concession agreement, which is what we have been doing in two airports now, Cebu and Clark [airports],” Bautista said at a Palace briefing.

The Department of Transportation chief was referring to the Mactan-Cebu International Airport and Clark International Airport, which are operated by private firms GMR-Megawide and Luzon International Premier Airport Development Corp., respectively.

Bautista said the DOTr is working with the Asian Development Bank in preparing the terms of reference for the NAIA operation’s privatization.

The Transportation chief also allayed fears of higher airfares and airport terminal fees, as the regulatory function will remain with the government.

“The government will have a say in the rates that the operators will impose,” Bautista, a former president of flag carrier Philippine Airlines, said.

Meanwhile, the President ordered the fast-tracking of the modernization of the country’s aviation safety system to avoid glitches like the New Year’s Day air traffic incident at the NAIA.

At the same media briefing, Bautista said the management agreement with Sumitomo-Thales — the maintenance provider of the communications, navigation, and surveillance/air traffic management (CNS/ATM) system of the Civil Aviation Authority of the Philippines (CAAP) — will also be expedited.

Information and Communications Technology Secretary Ivan John Uy said an “electromechanical malfunction” triggered the air traffic system glitch that shut down the country’s airspace for most of January 1 and affected over 300 flights, stranding thousands of travelers.

At a Palace press briefing, Uy said the matter was discussed during a recent meeting with the President and the Department of Transportation.

“We did discuss on the incident that happened last January 1, and so far from the cybersecurity aspect, there doesn’t appear to be any cyber-related incident that triggered the incident,” Uy said.

“It was basically an electromechanical malfunction that triggered the whole incident,” he added.

“[The President] is very much aware of what happened, and he supports our recommendation to implement future requirements necessary for the upgrade or improvement of the CNS/ATM system,” Bautista added.

The requirements include hardware and software maintenance, hardware replacement, ultimate fallback system for software redundancy and the need for an independent CNS/ATM in a separate location, the DoTr chief added.

Bautista said that the government has been working with Sumitomo-Thales since last September to help CAAP with the CNS/ATM system maintenance.

However, he said a maintenance agreement was not reached due to financial issues with the maintenance provider.

“They have claims against the government, we do also have claims against them, and they were just trying to settle this and hopefully by the end of this month, There is a clear indication on how we will be able to settle the issue,” Bautista said.

Aside from upgrading the CNS/ATM system, the government is looking to create an offsite permanent back-up system, possibly in another airport, to keep the system redundant and further minimize the possibility of issues that could affect airport operations.

“We will need to prepare a feasibility study to do this and for us to be able to determine the cost which we will present to NEDA (National Economic and Development Authority) for approval and for funding either from ODA (official development assistance) or from GAA (General Appropriations Act),” the Transportation chief said.

The Senate public services committee launched an investigation into the fiasco that happened in the country’s main gateway on January 1.

At least 282 flights were canceled, diverted, or delayed on New Year’s Day as the CAAP recorded a technical issue at the Philippine Air Traffic Management Center (ATMC) at 9:50 a.m.

Some 56,000 passengers were affected at the NAIA.

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