Philippine airports should be privately-run, ADB says

MANILA, Philippines - Philippine airports should be managed by private companies to make these facilities more efficient, the Asian Development Bank (ADB) said. In a report, the ADB also chided government for its failure to complete a loan package intended for the upgrade of six airports, including Puerto Princesa, Cotabato, Sanga-sanga, Dipolog, Butuan, and Pagadian. It also belittled the Department of Transportation and Communications’ capability to manage the country’s airports. Giving the DOTC and the Air Transport Office (ATO) the responsibility for large sums of money from airport operations “does not encourage accountability and efficiency in the use of resources, and does not provide incentives to improve performance." “Accordingly, there is an urgent need to transform civil aviation from a government-run to a market-oriented subsector," the ADB said. The lender also noted several anomalies on the implementation of the projects under the $167-million ADB loan, which was signed between the government and the ADB in 1997. As of the loan’s closing in 2005, only 15.37 percent of the total loan was disbursed. Only about 25 percent of the consulting services were utilized and the project was simply not implemented, the ADB said. The loan, co-financed by ADB with the European Invesment Bank, aims to expand and improve civil aviation infrastructure and support safer operations based on international standards at selected airports. It also aims to reduce congestion in the Ninoy Aquino International Airport by providing alternate ports of entry and/or departure for international passengers and cargo. The project was finally terminated in September 2005 owing to procurement issues. The project was also beset by the slow progress in the land and acquisition and resettlement activities, severe delays in recruitment of consultants, and significant civil works and equipment procurement problems. The project was further worsened by the slow performance of the prequalification bidding and awards committee (PBAC) and the variation orders and price escalation committee. The PBAC was likewise blamed for the unsuccessful procurement process. Despite the project redesign of some aspects of the project to encourage improved equipment purchase, procurement was unsuccessful, mainly as a result of unprofessional actions by DOTC’s PBAC. Many complaints were received from bidders claiming that advantageous information was leaked to some contractors and/or suppliers, the ADB said. - GMANews.TV