Philippines’ Clark airport gets $1.25bn deals
REUTERS - clark, Philippines • The international airport at Clark, a former US military airbase in the Philippines, has secured at least $1.25bn of new foreign investment to expand capacity, its president said.
Clark airport, currently catering mostly to budget airlines such as Tiger Airways, Air Asia of Malaysia, and Asian Spirit and Cebu Pacific of the Philippines, wants to position itself as an aviation service and logistics hub in Southeast Asia.
KGL Investment Company, a private equity unit of logistics group Kuwait and Gulf Link, is investing $1.02bn to build a logistics complex at a 130-hectare lot inside the former US military base north of the capital, Victor Jose Luciano, president of the state agency Clark International Airport Corporation (CIAC) said. “As soon as we sign, and we approve their development plans, within 30 days they will start construction,” Luciano said, adding the deal would likely be finalised in the coming weeks.
KGL, which hopes to service cargo coming from nearby Subic Bay port, will complete its full investment within 18 months of starting construction, he said. Luciano also said CIAC will sign an agreement next week with SIA Engineering Company, a unit of Singapore Airlines, for an investment of up to $250m in an aircraft maintenance facility in Clark. “It will not only service Singapore Airlines, it will also service other airlines,” Luciano said. “They will finish construction in less than a year.”
SIA Engineering teamed up with JG Summit Holdings’ airline arm Cebu Pacific for the venture and is spending $70m initially for the project. Luciano said SIA Engineering is looking at building three to five hangars at a 120-hectare lot in Clark to provide light to heavy aircraft maintenance for narrow and wide-bodied aircraft.
Investments started to come to Clark as more airlines began operations at its international airport. “The increase in flights generated more interest in Clark,” said Luciano, who helped set up Asiana Airlines’ Philippines operation in the early 1990s. Annual international passenger flights out of Clark rose to 2,065 in 2006 from just 44 in 2003. The number of flights slipped last year to 1,975 after several airlines shifted to using wide-bodied from narrow-bodied aircraft.
Luciano expects the airport’s passenger capacity to rise to 2 million annually this year from 1 million now after a 160m peso ($3.8m) upgrade is completed this month. CIAC is planning another upgrade worth $250m involving the construction of a new terminal for international flights. The agency is studying whether to tap official development funds or invite a foreign contractor to build the terminal.
Singapore’s Changi airport and Kuwait’s Al-kharafi group have expressed interest to build the new terminal in Clark. Investors are unfazed by the soured investment of Germany’s Fraport AG in a new terminal at Manila’s main international airport which remains moth-balled years after the project was completed because of a dispute with the government, Luciano said.
The opening of the new terminal in Clark by 2009 or 2010 would expand the airport’s passenger capacity to 7-8 million annually. Manila’s main international airport currently has an annual capacity of 17-18 million passengers.
Clark airport, currently catering mostly to budget airlines such as Tiger Airways, Air Asia of Malaysia, and Asian Spirit and Cebu Pacific of the Philippines, wants to position itself as an aviation service and logistics hub in Southeast Asia.
KGL Investment Company, a private equity unit of logistics group Kuwait and Gulf Link, is investing $1.02bn to build a logistics complex at a 130-hectare lot inside the former US military base north of the capital, Victor Jose Luciano, president of the state agency Clark International Airport Corporation (CIAC) said. “As soon as we sign, and we approve their development plans, within 30 days they will start construction,” Luciano said, adding the deal would likely be finalised in the coming weeks.
KGL, which hopes to service cargo coming from nearby Subic Bay port, will complete its full investment within 18 months of starting construction, he said. Luciano also said CIAC will sign an agreement next week with SIA Engineering Company, a unit of Singapore Airlines, for an investment of up to $250m in an aircraft maintenance facility in Clark. “It will not only service Singapore Airlines, it will also service other airlines,” Luciano said. “They will finish construction in less than a year.”
SIA Engineering teamed up with JG Summit Holdings’ airline arm Cebu Pacific for the venture and is spending $70m initially for the project. Luciano said SIA Engineering is looking at building three to five hangars at a 120-hectare lot in Clark to provide light to heavy aircraft maintenance for narrow and wide-bodied aircraft.
Investments started to come to Clark as more airlines began operations at its international airport. “The increase in flights generated more interest in Clark,” said Luciano, who helped set up Asiana Airlines’ Philippines operation in the early 1990s. Annual international passenger flights out of Clark rose to 2,065 in 2006 from just 44 in 2003. The number of flights slipped last year to 1,975 after several airlines shifted to using wide-bodied from narrow-bodied aircraft.
Luciano expects the airport’s passenger capacity to rise to 2 million annually this year from 1 million now after a 160m peso ($3.8m) upgrade is completed this month. CIAC is planning another upgrade worth $250m involving the construction of a new terminal for international flights. The agency is studying whether to tap official development funds or invite a foreign contractor to build the terminal.
Singapore’s Changi airport and Kuwait’s Al-kharafi group have expressed interest to build the new terminal in Clark. Investors are unfazed by the soured investment of Germany’s Fraport AG in a new terminal at Manila’s main international airport which remains moth-balled years after the project was completed because of a dispute with the government, Luciano said.
The opening of the new terminal in Clark by 2009 or 2010 would expand the airport’s passenger capacity to 7-8 million annually. Manila’s main international airport currently has an annual capacity of 17-18 million passengers.
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