Mr. Andrew Acquaah-Harrison, Deputy CEO, GMR; Engr. Nigel Paul Villarete, General manager, MCIAA and Ms.Melanie Ng MCIAA board member (L-R) preside during the public hearing on the proposed increase of the terminal fees in the Mactan Cebu-International Airport (MCIA) at the MIP lounch.(CDN PHOTO/JUNJIE MENDOZA)
A proposed terminal fee increase for both domestic and international passengers departing from Mactan airport may be delayed by at least a month following opposition from stakeholders in yesterday’s public hearing.
Nigel Paul Villarete, Mactan Cebu International Airport general manager, said he will submit a report to the MCIA board on the feedback at the end of the month.
It’s up to the board, headed by Transportation Secretary Emilio Abaya, to make make the final decision on the terminal fee increase.
“I’m inclined to postpone (implementation) for a month or two but then that will all depend on the decision of the board,” he said.
Based on MCIA board resolution 2014-2077 issued in July 1 this year, the fee increase would be implemented on Oct. 1.
Revenue
Villarete said the proposed terminal fee increase for domestic and international passengers would cover improvements for the airport’s facilities not covered under the concession agreement with GMR Megawide Cebu Airport Corp.
In yesterday’s public hearing held at the MIP Lounge, Villarete explained why the MCIA is seeking an increase in terminal fees for departing passengers less than two months before the GMR-Megawide Cebu Airport Corp. takeover on Nov. 1.
He said their financial revenue stream went down from P1.5 billion a year to only P500 million after the Concession Agreement. This amount can only cover operation costs and salaries of personnel. The MCIA employs 400 workers.
“The MCIA is responsible for the air side operations and maintenance services which includes the runways and other aerodome facilities and the P500 million revenue will not be enough since it doesn’t depend on government aid,” Villarete said.
The airport could generate P300 million from the terminal fee increase which will be used to improve facilities.
“One project we have planned is to have the runway overlaid next year which will cost P300 million to P400 million,” he said.
Improvements
MCIAA will collect P76.6 from the P300 domestic passenger service charge and P143.8 from the P750 international passenger service charge.
The airport currently charges P200 for departing domestic passengers and P650 for international passengers.
Villarete said the additional cost is needed to cope with inflation since the last increase for domestic passengers was done 15 years ago or 1994 and nine years ago for international passengers or in 2005.
Based on the breakdown presented for domestic passengers, GMR Megawide Cebu Airport Corp will get P181.00 and a separate P383.00 for international passengers.
GMR Megawide senior advisor Andrew Acquaah Harrison said this amount can be used for the improvements of the old terminal including repair of restrooms, lighting, new seats and X-ray machines.
agreement
Lawyer Jose Bernas of the Bernas Law Office asked Villarete if the increase was included in the concession agreement which the Department of Transportation and Communications (DOTC) signed with GMR-Megawide Cebu Airport Corp.
“It just seems too swift that an increase be done before the take over and is it not that the concessionaire will have to apply for this?” he said.
The Bernas Law Office represents Sen. Sergio Osmeña III who filed a case against the DOTC questioning the bidding of the P17.5 billion new terminal project for MCIA.
Villarete said the agreement stipulates that the MCIAA will first apply for a fee increase and the concessionaire will have to apply for the subsequent increase every five years.
“Under the PPP (public-private partnership) the terminal fees will be adjusted in accordance with a formula of 10 percent every five years plus one time increase upon completion of the new terminal,” he said.
One hearing only
He said under the agreement, the rate adjustment should not go beyond P181 for domestic passengers fee and P383 for international passengers fee.
Juan Lorenzo T. Tanada, Cebu Pacific vice president for corporate affairs, said the MCIA should conduct another hearing with other stakeholders since they only knew of the hearing after reading it from the newspapers.
Villarete and MCIAA board of trustee Melanie Ng said they will discuss everything raised during the public hearing with the board because the law only requires one public hearing.
The board is chaired by Transportation and Communications Secretary Emilio Abaya.
Cebu City Mayor Michael Rama said any increase in airport terminal fees should have a commensurate improvement for the convenence of travelers.
“Let’s hear the public first. Maybe the time has come that airport management should already start to revisit their terminal fee rates and see if the planned increase was reasonable. I can always pay for as long as the service is approximated, there is commensurate service,” said Rama. /With Chief of Reporters Doris C. Bongcac