Sangley Airport dev’t clears competition hurdles

Sangley Airport dev’t clears competition hurdles | Daily Tribune

The Cavite provincial government, along with a consortium led by Cavitex Holdings Inc. and House of Investments Inc. has secured approval from the Philippine Competition Commission (PCC) for the $11 billion Sangley Point International Airport (SPIA) project.

The clearance from the PCC comes two years after the Cavite provincial government awarded the project contract to the SPIA Development Consortium.

The joint venture aims to develop, own, operate, manage and maintain the SPIA in Cavite City, which is designed to ease congestion at the Ninoy Aquino International Airport (NAIA).

In a media statement on Monday, the PCC noted that the planned public-private partnership (PPP) project, structured as a joint venture development agreement, is not expected to significantly reduce or restrict competition in the market.

The Commission’s decision centered on three key aspects: competition in the construction services market, the relationships among major players, and potential overlapping businesses.

Competitive environment

The PCC found a competitive environment in the construction services sector due to many qualified contractors.

Even if the joint venture attempted to limit competition, consumers would still have access to various alternatives.

The PCC also reviewed the relationship between House of Investments and EEI Corporation, a major construction firm.

Despite House of Investments holding a majority stake in EEI, the PCC concluded that EEI does not have enough market power to prevent other companies from obtaining necessary services. Additionally, Samsung C&T Corp.’s involvement as the main contractor for the airport project bolsters competition.

No overlapping businesses

Furthermore, the PCC found no overlapping businesses among the companies involved in the project.

The presence of competitors, including Megawide Construction Corp. and Makati Development Corp., contributes to a competitive landscape, reducing the likelihood of unfair practices by the joint venture.

As initially agreed, the Cavite provincial government and the SPIA Development Consortium have up to 18 months from the signing of the joint venture and development agreement to finalize the project’s design and business plan and achieve financial closing.

The first phase will see the completion of the first of four runways, expected to be operational by 2028.

The second phase will introduce a two-way runway system along with airport facilities capable of accommodating at least 75 million passengers annually.

Currently, the Sangley Point Airport is operated by the national government to complement the runway operations at NAIA.