Neda fast-tracks aviation project

Business Mirror
May 9, 2012
By Cai U. Ordinario

The National Economic and Development Authority (Neda) Project Monitoring Staff (PMS) has recommended that a loan from the Japan International Cooperation Agency (Jica) for the Communications Navigation Surveillance/Air Traffic Management (CNS/ATM) Systems Development project be restructured within the year.

In an interview, Neda PMS Director Roderick Planta said the CNS/ATM project also needed to re-enter the Investment Coordination Committee (ICC) process due to the “financial implications” of delays.

The CNS/ATM project has suffered delays since the Department of Transportation and Communications (DOTC) has not provided any counterpart funding for the project, which was supposed to have been completed in February 2007.

The project seeks to establish satellite-based CNS/ATM systems according to specifications of the International Civil Aviation Organization (Icao); deploy vital air-transport communication, surveillance and information facilities; and replace aging communication and air-traffic equipment in select airports nationwide.

“We do not expect it to be completed on its original closing date because it is still under review. This is why the loan for the project will require restructuring sooner or later, or sometime within 2012,” Planta added.

He said loan restructuring might mean an extension of the loan validity or financing of some aspects of the project with local funds. Planta added that the review being undertaken by the DOTC would make this direction clear.

“We presume that the review entails an examination of the financial and technical aspects of the project. Because of this, there is a need to bring this back to the ICC which will pass judgment on the project, given the financial implications,” the PMS director said.

Jica is extending a loan of P9.586 billion for the P13.272 billion-worth project. The loan was signed in February 2003 and rescheduled to close in June 2013 when the project will have been completed. Neda documents earlier showed that progress of physical accomplishment for the package for the construction of the whole CNS/ATM system was only 1.74 percent while building/civil works for the radar sites was at 0.01 percent.  The project has two work packages. The first package is for the design and construction of the ATM center and ATM Automation System and the second is for the whole CNS/ATM system.

The Neda documents also showed that availment rate or the loan amount’s cumulative utilization according to a multi-year schedule was at 13.52 percent, enough for it to make it into Neda’s official development assistance (ODA) alert mechanism, which lists problems that may lead to more cost overruns in the future.

Disbursement rate or percentage of actual disbursement against target disbursement for the period was also low at only 58.29 percent while the project’s utilization rate, which reflects the physical accomplishment of the project, was at 9.9 percent.