Press Release
September 17, 2006

If NAIA 3 would need subsidy, govt told to make forecast now
Govt should pay for airport lobby but not the lobby to bag the project

With a projected net profit of only P609 million this year, how can the Ninoy Aquino International Airport Authority pay for its Terminal 3 complex, which is costs hundreds of billions of pesos to build?

This query was raised by Sen. Ralph Recto in doubting the financial capability of the airport authority to pay for the sprawling complex sans government subsidy .

Recto said that in the 2007 budget documents Malacañang had submitted to Congress, it admitted that the NAIA Authority will gross P6.8 billion this year , but will spend P5.9 billion for operations and salaries , leaving a net income , after tax, of P609 million.

It appears that corporate funds alone of the NAIA management will not suffice in settling the obligations incurred in building the new airport , Recto said.

To pay for its own, the airport management can , however, adopt a user pays principle but the terminal fees would be astronomical and may draw protests from OFWs, he said.

Recto said passenger traffic in the near term does not support the assurance that the airport can be a self-liquidating enterprise .

In the event the government would come in and lend a helping hand, then whatever subsidy should be through an appropriation of Congress, Recto said .

But so far NAIA 3 -related contingent expenses do not appear in the forward estimates used by the Department of the Budget and Management in projecting three-year expenditures of the national government, Recto said.

The DBM , according to Recto, is now using a multi-year budgeting in forecasting budget pressures government will face from now to three years .

But NAIA 3 is still not in its radar. Perhaps government is in the denial mode. But based on past experience , supposedly income-generating projects, such as the MRT, eventually ended up in the red despite earlier claims that they will be earning money, he said.

I do hope that obligations in building NAIA 3 would not migrate to the public debt column , that it would earn money, that it wont be needing a lifeline from the government, he said.

He urged government to be truthful about the budgetary implications of the soon-to-be-opened international gateway to the country .

There is no free lunch. This project will be paid either through fees paid by users or taxpayer-paid subsidies tucked in the budget , he said.

Recto said government should peg the fair final price for the NAIA terminal 3 , but it must pay for actual costs only, meaning it should pay for the airport lobby but not the lobby to bag the project, which is non-reimbursable expense.

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