The beleaguered General Motors (GM) of the US is selling its 3% stake in Suzuki Motor Corporation for $230 or about PHP11 billion in Philippine money. The biggest automative company (until last year) is bleeding heavily in the current financial crisis sweeping the world and it is feared it would run out of money soon unless bailed out by the US government.
Suzuki has lost 55% of its “market value” this year due to the ongoing economic crisis. It has revised downward its estimated profits to $612 million. Yet a 3% stake in that company will still earn $18.3 million or about PHP850 million.
Legazpi airport is due to be relocated soon in a Daraga barangay going to Sorsogon. Government estimates the cost to be P5 billion pesos, an estimate I do not believe. The government said that when the new Davao airport cost was completed it cost $128 or about PHP6 billion. I am not sure if in that bill land acquisition and airport equipment was included since a PHP10 billion cost was being bruited about in Davao.
Nobody at this point knows what is included in the estimate of PHP5 billion for the new Legazpi airport. But it is known that project proponents in many cases deliberately underestimate the cost so that it will “saleable”. Later on, they would simply ask for “supplementary” budget allocation which is already an overused ploy. In this case it will always be approved lest people get mad over an airport that cannot be used.
Be it P5B or P10B it is simply too much money to put in a single project that will probably handle only 3 flights per day. The landing fees that will be collected will not even be enough to pay the cost of money and operational expenses of the airport.
Moreover, it is not the common people who will use it. After all it is known that half of the airline revenues are from travel-happy government employees who always think they are in a hurry but who would take a cheaper alternative if the fare will come from their pockets.
I have no question if funds are spent for municipal ports. Simply because so many people use it and not only fishermen and boat/launch passengers. Municipal ports even become rural promenades.
Airports takes lots of space, it costs so much and just too little people use it anyway. They just make it look necessary but for all practical purposes it is a white elephant.
Look if that money is used to buy that 3% stake of Suzuki. With that it will be put to better use.
Of course the usual justifications like tourism will be raised again and again like a mantra. As if tourists come in droves. They will also use the word “gateway”. Bicol’s real gateway is the bus and the Maharlika highway. After all, we are not the US where long-distance travel by people is really via air and they can afford to pay for it.
For comparison, look at Baguio City which is a much stronger destination for local and foreign tourist. It no longer has scheduled flights and it is none the worse for it. Tuguegarao City in Cagayan, a city of comparative size and distance to Legazpi doesn’t have air service, too, anymore. Commuters there are willing to take the 10-12 hour overnight aircon bus which is the same travel time of aircon buses to Legazpi.
They rationalize that the old airport can be sold for about P5B so in the end the project becomes “self-financing”. But did they reckon how many factories can be put up with that amount of money? It could have even bought the Aboitiz Transport System. Yes, bring that money to Bicol, please, but use it in putting up factories and BPO centers.
I remember that a few years ago a multilateral funding agency observed that we stress too much infrasture-building. And this might be another case of that.