Meanwhile, all domestic flights of PAL will now operate from Terminal 2, alongside domestic flights of AirAsia.

The reassignments are part of the Schedule and Terminal Assignment Rationalization (STAR) program of the Manila International Airport Authority, which started on April 16. Under the program, MIAA estimates the capacity of Terminal 2 to increase from 7.5 million to 10 million passengers a year.

Terminal 2 was originally designed as a domestic terminal with continuous passenger flow. But in the 1990s, PAL began to use Terminal 2 exclusively for its international and domestic operations, an arrangement that was entered into during a time of financial distress for the flagship carrier.

Prior to this, PAL also began moving flights to and from Singapore, Ho Chi Minh, and Phnom Penh to Terminal 1.

See the full list of terminal reassignments here. – Rappler.com

MIAA set a timeline of 24 to 36 months to complete upgrades to the facilities and passenger processing systems of the Ninoy Aquino International Airport (NAIA). These projects include:

• Replacing the passenger boarding bridges
• Replacing chillers
• Upgrading taxiways
• Expanding the coverage of its CCTV system
• Digitizing airport operations and passenger systems

The agency also announced the “immediate construction” of six immigration counters in NAIA Terminal 3, increasing the total counters to 36.

A separate immigration annex in NAIA Terminal 3, set to open in December, is also being constructed to serve overseas Filipino workers, persons with disabilities, senior citizens, and diplomats. It will have six four-man counters with 24 immigration officers.

Electrical audit underway

Following another power outage that hit NAIA Terminal 3 last June 9, MIAA gave assurances that it would complete the electrical audit of the terminal with the aid of Meralco and MServ, a wholly owned subsidiary of Meralco.

Filipino tycoon Manuel V. Pangilinan, chairman of Meralco, earlier offered to conduct the electrical audit for free as a way to help the government map out projects to modernize and upgrade the terminal.

But although the electrical audit was pitched as a solution after the Labor Day fiasco, it also ended up being the cause of the next outage on June 9.

In an incident report, MServ clarified that its personnel “accidentally left grounding conductors attached to an electrical equipment during a testing activity,” which caused an electrical fault that eventually led to the 37-minute power interruption.

Besides the outages on May 1 and June 9, the entire Philippine airspace was also shut down on New Year’s Day after several components of the air traffic management system broke down. (READ: What caused the January 1 air traffic mess and what should be done about it?)

“Times are very challenging for us now; but be that as it may, we are taking steps and exploring all ways possible to achieve our deliverables based on our established priorities,” MIAA officer-in-charge Bryan Co said in a statement on Wednesday, June 14. – Rappler.com

Rating: FALSE

Why we fact-checked this: The Facebook video, posted on June 6, has gained 6,500 views, 727 reactions, and 37 shares from an account with 88,000 followers, as of writing.

The video titled, “May SABOTAGE sa power outage ng NAIA!” has been reshared following the power outage in the NAIA Terminal 3 on June 9.

The bottom line: Even before the New Year incident, the NAIA Terminal 3 had been experiencing power outages back in 2016 and, more recently, in September 2022. 

A Civil Aviation Authority of the Philippines (CAAP) report stated that the “inadequate maintenance program” on the terminal stations has been the leading cause of the power outages. Transportation Secretary Jaime Bautista admitted that the air traffic management system in the airport was already outdated in a press briefing on January 1.

NAIA 3 records on the Manila International Airport Authority (MIAA) state that the terminal has a design capacity for 13 million passengers. MIAA has recorded 7.3 million passengers on Terminal 3 in the first quarter of 2023, 188% larger compared to the same period in 2022. More areas are needed to be powered to accommodate all the passengers.

Talks of sabotage: Senate investigation on the New Year blackout has ruled out cyberattacks and sabotage as causes, according to the state-owned Philippine News Agency (PNA).

In the PhilStar.com article that the video cited to support the claim, Bautista only said that possibility of foul play is yet to be dismissed as probable cause for the Labor Day outage, not as a prominent lead. The article also said that power distributor Meralco already pointed out “main circuit breaker problem” as the cause of the outage.

MIAA officer-in-charge Bryan Co has also denied allegations that power interruptions were related to talks of NAIA’s possible privatization.

Rappler has published several fact-checks on NAIA under the Marcos administration:

• FACT CHECK:  Marcos did not order renaming of NAIA
• FACT CHECK: Marcos has no plans of shutting down NAIA
• HINDI TOTOO: Proyekto ni Ferdinand Marcos ang NAIA

– Kyle Marcelino/Rappler.com

Kyle Marcelino is a graduate of Rappler’s fact-checking mentorship program. This fact check was reviewed by a member of Rappler’s research team and a senior editor. Learn more about Rappler’s fact-checking mentorship program here.

Keep us aware of suspicious Facebook pages, groups, accounts, websites, articles, or photos in your network by contacting us at factcheck@rappler.com. Let us battle disinformation one Fact Check at a time.

MANILA, Philippines – Another power outage has struck the Ninoy Aquino International Airport (NAIA) Terminal 3, barely a month since it last happened. This comes days after the government advanced talks regarding the privatization of the operation of the airport, the Philippines’ main international gateway.

“It’s unfortunate po that today, again, we would like to apologize because of the interruption. Nagkaroon po tayo ng brief 37-minute interruption dito sa (We had a brief 37-minute interruption here in) T3 that caused some delays for our flights,” MIAA Officer-in-Charge Bryan Co said in a press briefing on Friday, June 9.

The power outage hit NAIA Terminal 3 at 12:52 pm. Commercial power from Meralco was restored by 1:29 pm.

This time, it was a “procedural lapse” that caused the power outage. This morning, MIAA shut down some substations to conduct its electrical audit, one of the solutions identified following the  Labor Day outage.

But as they were re-energizing the substations at around 12:50 pm, it turned out that a “testing cable” was left in the Roadway 2 Substation, which caused a shortage and led to the Terminal 3’s power to trip.

As a result, five domestic flights and two international flights experienced delays, with possible “consequential delays” to other fights. No flights were canceled. The power outage also caused a build-up of passengers in the immigration area because it took about 15 to 20 minutes for the immigration computer system to come back online.

This now marks the third major power disruption to the airport this year, which includes the New Year’s Day air traffic fiasco and Labor Day power outage. NAIA Terminal 3, in particular, has a history of being struck by power outages, such as in 2016 and again in September 2022.

Privatization talks

The latest outage happened exactly a week after the Department of Transportation (DOTr) and MIAA announced that it had prepared a joint proposal for NAIA’s rehabilitation. This would take the shape of a solicited Private-Public Partnership (PPP) project, paving the way for private companies eager to bid.

And just two days ago, a DOTr official said that the privatization of the country’s main gateway could happen as early as the first quarter of next year.

This wasn’t the first time that a major outage hit the airport following discussions on privatization. On May 1, Labor Day, NAIA Terminal 3 was also paralyzed by an hours-long power outage, causing 40 flights to be canceled. That too came just as the government received an unsolicited proposal for a multibillion rehabilitation project to modernize NAIA.

However, Co dismissed allegations that the power interruptions happening at the airport were related to these discussions.

“As I mentioned, we identified already the root cause, and it’s part of a procedural issue that should have been followed in terms of energizing or de-energizing a substation,” Co said. “At least, we can rule out those other angles na nagsasabi na (that say) it’s possible in relation to privatization.”

“Our stance as far as MIAA is concerned, whether privatization is there or not, MIAA has the mandate to improve, operate, and of course ensure na reliable po ang ating NAIA airport (that our airport is reliable),” he added.

What happened during the last outage?

Last time this happened, a fault current had triggered the main circuit breaker of NAIA Terminal 3 – but exactly where in the electrical system this came from remains a mystery.

In the meantime, MIAA relied on its generators to provide power, but there was another problem: the generator set could only support 30% of NAIA Terminal 3’s load. This was only enough for “mission critical areas,” which included: 

• Check-in systems
• Immigration system
• Final security x-ray
• Aerobridges
• Baggage carousel
• Elevators, escalators, walkalators
• Air-conditioning systems for select areas
• Lights

Because of this lack of genset power, Transportation Secretary Jaime Bautista said that several areas in the terminal had no air-conditioning on May 1. 

Co said that the MIAA has since started the procurement of additional gensets with a capacity of 6 megawatts, with the bid opening scheduled for next week. – Rappler.com

[Vantage Point] Are airport glitches avoidable?

There had been attempts in the past to spruce up the airport, but nothing came out of it due to the underhanded efforts of some enterprising people in government who were scuttling the deal for whatever vested-interest motivation, succeeding in scaring off investors – notably a group of taipans – and unfortunately helped perpetuate the decades-old suffering of both local and international travelers.

On Wednesday, June 7, the Department of Transportation (DOTr) announced that Naia’s privatization could commence as early as the first quarter of next year. A lot would depend on the process of awarding the contract to the chosen concessionaire. Rappler learned that the DOTr is eyeing both the solicited and unsolicited routes in privatizing the airport, but it will entirely depend on which comes first.

The DOTr and the Manila International Airport Authority (MIAA) both submitted their joint plans to the National Economic and Development Authority (NEDA) on June 2. 

DOTr seeks P141B commitment

In an interview, DOTr Secretary Jaime Bautista told Rappler that investors must commit P141 billion in investments, exclusive of a straight-up payment of P30 billion, annuity payments of P2 billion, and a share of NAIA’s total revenue – expected to reach billions – to be generated from its commercial and non-commercial operation.

Bautista said that, contrary to misconceptions, the NAIA is not being sold. The government is offering to the private sector the right to rehabilitate, manage, and operate the airport under a concession. Under the said privatization project, a private concessionaire will have 25 years to operate the airport and recover its investment.

DOTr’s move to consider the Public-Private Partnership (PPP) route, which the previous DOTr management shunned, is a good move. Former DOTr Secretary Arthur Tugade rationalized the junking of the PPP saying a negotiated deal between government to government is the faster course and a better option to facing delays that may emerge with public biddings concerning the private sector.

But for me, PPP is a more feasible contractual agreement between the Philippine government and a private firm targeted towards financing, designing, implementing, and operating infrastructure facilities and services that were traditionally provided by the public sector. It embodies optimal risk allocation between the parties because it minimizes cost while realizing project developmental objectives. The project will be structured in such a way that the private sector gets a reasonable rate of return on its investment.

PPP addresses the limited funding resources for local infrastructure or development projects of the public sector, thereby allowing the allocation of public funds for other local priorities. It is a mechanism to distribute project risks to both the public and private sectors. PPP ensures that both sectors will gain improved efficiency and project implementation processes in delivering services to the public. Most importantly, PPP emphasizes value for money by focusing on reduced costs, better risk allocation, faster implementation, improved services, and possible generation of additional revenue.

Under the Build-Operate-Transfer (BOT) scheme which this project is going to be implemented, the government spends nothing. The concessionaire puts up the funding, builds the airport, gets paid by operating it for 25 years before turning the project over to the government. 

Without doubt, our country needs more than two airports. Most of the major cities today have two, even three or more, major airports actively servicing their citizens.  Serving 42 million passengers a year, the Naia reels from deterioration. Its four passenger terminals simply could not cope, dismally serving just over 40 percent of its designed passenger traffic capacity. Through the years, only one domestic and three international terminals have been built at the NAIA, with the frequency of plane arrivals and departures at only 40 an hour. 

The privatization of state-owned airports has gone global. The French government, for example, first turned over management of its airports to local authorities, and now to private entities. In Japan, 30- to 40-year concessions to run some of its airports are being sold by the government.

By offering a wide range of income sources, airports present a better risk profile to the private sector than other major infrastructure investments, These income sources include landing fees, airline contracts, and other aviation-specific sales, as well as retail, shopping and hotels.

Not surprisingly, as shown by the level of interest in the NAIA rehabilitation bid and the continually growing demand for aviation, local conglomerates see airport operations as a good business investment. Although NAIA’s upgrade would entail a huge initial investment, profitability prospects in the long term are promising.

Not only is the private sector more equipped to plan long-term for more efficient operations and maintenance of the airport’s four terminals, company owners and executives look at a 20- to even a 50-year horizon, compared with government appointees’ short terms.

NAIA needs a long-term, lasting solution now!

Yes, NAIA’s location is central. True, it has the required supporting infrastructure. But to be the country’s world-class gateway to the world, NAIA needs the kind of connected aviation ecosystem that seamlessly links together airlines, airports, air traffic management, and support services with the millions of passengers who pass through its gates every month, enhancing air travel experience with flawless and sustainable airport operations. 

For more than two decades now, NAIA has been ripe for rehabilitation. Just consider the numerous proposals for the airport’s upgrade that the government has received through the years from various private sector groups. Now is not the time to gamble on uncertain and untested novice airport projects which have no supporting infrastructure.

Must Read

[Vantage Point] Are airport glitches avoidable?

The glitch that temporarily paralyzed airport operations early this year has resulted in even more strident cries to upgrade this antiquated and congested infrastructure that we call our international gateway. Quick fixes and short-term solutions are not the answer. The time has come for concrete, sweeping, and optimal reforms to bring NAIA to the 21^st century. The taxpaying public and air travellers need to know how and when the NAIA will be modernized. The country cannot afford to wait for pedestrian airport projects that will take forever to build. 

The DOTr has received an unsolicited but welcome proposal from the Manila International Airport Consortium (MIAC), which includes units of listed conglomerates Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corporation, Asia’s Emerging Dragon Corporation, Alliance Global – Infracorp Development, Inc., Filinvest Development Corporation, and JG Summit Infrastructure Holdings Corporation. Joining the Consortium is U.S.-based Global Infrastructure Partners, a global giant which has interests in airports across London and Sydney.

What differentiates the government’s solicited proposal and the MIAC proposal?

The government’s solicited proposal is asking for a P141 billion project cost commitment from potential bidders and includes a P30 billion upfront payment, P2 billion annuity payment, and a share of total revenue in its terms. 

MIAC is offering a turnkey proposal. All the upfront investments, project management expertise, and operational knowhow will be put up by the Consortium, with a hefty US$ 1 billion concession payment and projected direct and indirect economic value upwards of US$ 14 billion throughout a 25-year concession period. 

Obviously, MIAC’s proposal is complete and ready to take off, presenting the fastest track ever to the complete modernization of the NAIA, aimed at benefiting travelers and at the same time giving revenue-generating opportunities to the Philippine government. Rather than waste more months and possibly years waiting for other solicited proposals to be prepared, launched, and executed, MIAC’s unsolicited proposal is timely and readily viable. 

Longer concession period is required

For an undertaking as monumental as the NAIA rehabilitation, anything shorter than the 25-year concession will lose the project’s appeal to investors. All parties involved would need a longer time horizon to establish new operational efficiencies that would elevate the airport to global standards and enable them to recoup their significant investments. 

The concession period specified by the Consortium appears to be the most sustainable to realize NAIA’s full potential. Currently, the airport has a capacity of 31 million passengers per annum. Through its investment, MIAC would be able to serve up to 62.5 million passengers per annum in five years and accommodate up to 70 million passengers per annum by 2048.  

While our national pride in it may have been tarnished by the past few decades’ infamous operational mishaps and management missteps, NAIA undeniably continues to play a central role in the country’s economic growth. It’s time for NAIA to fly higher and more proudly than ever before! – Rappler.com

Val A. Villanueva is a veteran business journalist. He was a former business editor of the Philippine Star and the Gokongwei-owned Manila Times. For comments, suggestions email him at mvala.v@gmail.com.

“We can say that by the first quarter of next year, it is doable that there will be a conclusion, meaning to say an award that could possibly be proclaimed by the government,” Lim said in an ANC Headstart interview on Wednesday, June 7.

However, the undersecretary stressed that this would be a “tough and tight schedule,” as the timetable would include discussions with the different participants and an ocular inspection of the facilities conducted by the winning private concessionaire.

“There will be negotiations also as to specific terms and conditions. So, that takes time. And if there are more than one participant, we will have to talk to all of them in the process. So, it will take time,” he added.

Just last Friday, June 2, the DOTr and Manila International Airport Authority (MIAA) announced that it had prepared a joint proposal for NAIA’s rehabilitation through a solicited Private-Public Partnership (PPP) project. The proposal has been submitted to the National Economic and Development Authority (NEDA) board for approval. 

The DOTr is also reviewing a separate P100-billion unsolicited proposal submitted by a super consortium of the country’s biggest conglomerates.

How much will the upgrade cost?

Under the government’s joint proposal, the winning private concessionaire will be required to upgrade the airport’s aging equipment and facilities – an investment that is expected to cost up to P141 billion.

“We also expect the winning bidder to make a commitment to invest in the facilities. So, we expect the total project cost is about P141 billion. That is the investment that is required to upgrade, rehabilitate, and expand NAIA,” Lim said.

Having the private sector handle these upgrades means that the government could save billions of pesos since expenses needed to support NAIA will no longer be included in the national budget.

Besides this investment commitment, the winning bidder must provide an upfront payment of around P30 billion, with annuity payments of around P2 billion. The total revenue generated from both commercial and non-commercial operations will also be shared between the private concessionaire and the government.

“Malaki din ‘yan (That’s also quite big). We expect around…in the billions, to receive billions from that. Because there’s a lot of upside when you operate NAIA and introduce efficiencies. And when you say introduce efficiencies, that means you can process more passengers. You can take in more flights,” Lim said.

In return, the winning private concessionaire will have 15 years to run the airport and recover its investment.

Who will own the airport?

Lim clarified that they can consider foreign bidders as part of the project, pointing to the amendments in the Public Service Act, which allows full foreign ownership of airport facilities.

Although the PPP project will transfer operations of NAIA to the private sector, the ownership of NAIA will not change hands.

“Most people ask, are we selling anything? No. All of these assets will continue to belong to the government. But it’s being granted as a concession. So, it’s like a franchise that you’re granting with terms and conditions for operating the public facility,” Lim said.

The project also does not include the management of the country’s airspace, which will continue to be handled by the Civil Aviation Authority of the Philippines.

Handing over the operations of the NAIA to the private sector would also loosen the “constraints that hobble a government-owned corporation,” according to Lim. NAIA is managed by the Manila International Airport Authority or MIAA.

“[A] government-owned facility is unable to really break away from the strict government procurement rules that slow down the process and allows a facility to respond quickly. You’re unable to really beef up. You know, MIAA, for example, has a plantilla dated 1988,” he said.

What about the employees?

Lim also emphasized that there would generally be no loss of employment following the PPP project. After the airport is privatized, employees will have a six-month period during which they will be offered employment. 

“They’ll have to prove themselves in terms of their work competency and work habits,” he said.

When it comes to security personnel, the current law enforcement agencies will continue to provide the manpower. These include MIAA’s Airport Police Department, and the Philippine National Police’s Aviation Security Group.

However, the private concessionaire is expected to beef up the workforce with “highly technical personnel.”

“Now insofar as the private concessionaire is concerned, we would expect them not to replicate the existing workforce, but bring in the highly technical personnel that is needed to introduce the technology – in the terminal, in the control tower, and of course the management expertise that they also bring,” Lim said. – Rappler.com

DOTr chief bares plans for NAIA, among region’s ‘most stressful’ airports

The two agencies have submitted their proposal to the National Economic and Development Authority (NEDA) board for approval. The project, a solicited public private partnership deal, would “increase the capacity of NAIA and ensure safe operations while significantly improving the passenger experience,” the DOTr said in a press statement on Friday, June 2.

Here are some of the project’s goals:

• Higher passenger capacity
• Shorter waiting and processing times
• More comfortable and modern facilities
• Better connectivity between terminals

Under the PPP agreement, a private concessionaire will acquire modern air traffic control equipment, rehabilitate the airport’s runways and taxiways, and upgrade the terminal’s existing facilities. 

In return, the private concessionaire will have 15 years to run the airport and make a profit from its investment before turning it over to the government.

The DOTr said that this project would address the growing demand for air travel in the Greater Capital Region – which often refers to Metro Manila, Bulacan, Rizal, Cavite, and Laguna – while additional airports are built in the regions.

“Cebu and Clark have shown that when given the chance, private companies can provide excellent airport services to Filipino travelers and visitors to the Philippines,” DOTr Secretary Jaime Bautista said in a statement.

“With this project, it is our goal that travelers to and from Manila, our country’s main international gateway, also benefit from the improvements in efficiency and service that world class airport operators and investors can bring,” he added.

NAIA has been hounded by controversies – from being named the worst business class airport in the world to facing multiple complaints of passenger theft by security screening officers. The latest was on May 1, when a power outage disrupted the flights of 9,000 passengers while on New Year’s Day, the failure of air traffic equipment paralyzed the entire Philippine airspace and left more than 78,000 passengers stranded.

Must Read

What caused the January 1 air traffic mess and what should be done about it?

What about the MIAC proposal?

The DOTr and MIAA are considering both solicited and unsolicited proposals for the airport’s rehabilitation, with the Asian Development Bank (ADB) acting as a transaction advisor for both modes. 

A solicited proposal is submitted by a company in response to a request made by the government, which usually already outlines certain terms and conditions. Meanwhile, an unsolicited proposal is submitted before any such request is made by the government.

Earlier in April – and days before the Labor Day airport fiasco – a super consortium of the country’s biggest conglomerates submitted a P100-billion unsolicited proposal for the rehabilitation of NAIA.

The new consortium – called the Manila International Airport Consortium (MIAC) – includes many of the conglomerates that were part of an older proposal for the same project, which eventually fell apart during the height of the global pandemic.

Although the DOTr has already acknowledged receipt of MIAC’s unsolicited proposal, Bautista said that his department was still in the process of conducting a “completion check” on it.

“The initial study is to have a solicited [proposal]. That’s the reason why we engaged ADB for help, for us to be able to entertain a solicited proposal. But since there is this unsolicited proposal, we have to work on it…. We are given 35 days to do the completion check, and that’s what we’re doing,” Bautista told reporters on May 10.

Must Watch

Newsbreak Chats: Navigating the NAIA turbulence

– Rappler.com

The outage could have been avoided if not for the delays in repairing and maintaining crucial components that keep communication and navigation systems running. 

Must Read

What caused the January 1 air traffic mess and what should be done about it?

A Senate investigation found that no proper maintenance had been made on air traffic equipment for the past two years.

The automatic voltage regulator, used to maintain a constant voltage, was only repaired earlier this May, months after the disastrous outage.

In this episode of Newsbreak Chats, Rappler’s resident economist JC Punongbayan and multimedia reporter Lance Spencer Yu break down the events that led to the airport outage, how the timeline of events was put together, the challenges that came with its coverage, and actions that have been taken by authorities since.

Watch Newsbreak Chats on Thursday, May 25, at 4 pm. – Rappler.com

These were only some of the chaotic scenes that happened on New Year’s Day, as technical issues paralyzed Philippine airspace for hours on end, leaving more than 78,000 passengers stranded.

More than four months later and hoping to prevent a repeat of the disaster, the Civil Aviation Authority of the Philippines (CAAP) has finally repaired the faulty uninterruptible power supply (UPS) that was partly blamed for the air traffic system malfunction.

“The CAAP successfully completed the corrective maintenance activity at the Air Traffic Management Center early this morning,” the agency said in a statement on Wednesday, May 17. “Air traffic controllers reported no flight disruptions during the maintenance operation.”

Edgardo Diaz, CAAP deputy director general for operations, also confirmed that the UPS units have been replaced.

“Wala po tayo naging aberya. Hindi po nagkaroon ng shutdown. Wala po tayong mga flights na hindi po natugunan (We didn’t run into anomalies. We didn’t have any shutdown. We didn’t have any flights we didn’t address). In other words, the operation went normal,” he said in a Wednesday interview on DZBB.

So does this mean that what happened on January 1 could never happen again? The short answer is no – at least not until interventions address the root causes of the problem.

“We can only exert our best effort,” CAAP Director General Manuel Tamayo told Rappler a month after the incident. And even after further repairs, the system is not foolproof.

“Ito, with the proper maintenance, bagong parts, bagong machine, puwedeng possibility of a shutdown is less,” Diaz told ABS-CBN news, adding that it does not completely eliminate the possibility of another glitch.

(With these replacements, proper maintenance, new parts, a new machine, the possibility of another shutdown is lessened.)

That’s because the New Year’s Day air traffic fiasco was a case of failure to maintain crucial equipment for months – and even years. Regular maintenance checks by qualified personnel could have spotted the melted wires, loose connections, and faulty circuit breaker long before one fault kicked off this series of events.

For some equipment, like the automatic voltage regulator (AVR), CAAP was fully aware that it was broken and neglected to replace it for months – all until disaster struck.

Senators question undermanned vital CAAP facility during air traffic mess

What caused the New Year’s Day fiasco?

In the hazy aftermath of the January 1 incident, CAAP’s narrative about what went wrong frequently changed. CAAP initially pointed to a defective UPS as the reason for the power outage, saying that one of the UPS’ blowers “conked out.” But since then, the agency has clarified that both UPS units were still functional when the incident occurred. 

So why did CAAP conduct an emergency procurement of two UPS units if both still worked? The agency said it was merely a preventive measure for future breakdowns.

The faulty UPS units that CAAP replaced were not the root cause of the power outage. To understand this, we have to separate the January 1 “glitch” into two main events: (1) the simultaneous tripping of both UPS units, and (2) the overvoltage that damaged communications and navigations equipment. 

Changing the old UPS units only addresses issues in the first main event – and even then, the units did not exactly fail. They deenergized the air traffic management equipment, which was a safety feature to prevent damage when an electrical fault is detected.

What made things worse were the other lingering problems throughout the system. Here are some identified by the Senate’s independent audit team, composed of members from the Institute of Integrated Electrical Engineers of the Philippines:

• Lack of a functioning AVR
• Short circuit that occurred on a power transfer switch
• Lack of functioning redundancy to back up the system

Let’s take a closer look at each of these.

Broken AVR

Among the most glaring issues was CAAP’s failure to repair its AVR, which has been broken since August 2022. CAAP claimed that its AVR is used only when the UPS must undergo maintenance, and that systems can still function without it.

However, the audit team disputed this, highlighting that the AVR is a critical part of the system. 

“The AVR provides regulated clean power to the UPS bypass, thereby allowing its normal operation. The lack of a functioning AVR could lead to another catastrophic incident. In case of fluctuations in the electric supply, the system is still vulnerable to power interruptions and damage to equipment,” the Senate committee report on the incident noted.

Under usual engineering practice, the average time to repair crucial equipment like an AVR should be just eight hours. On New Year’s Day, CAAP’s AVR had been broken for four months. CAAP committed to have it repaired by February 9, but it took them until May 3 to fulfill this. Why the delay? An interagency report stated that the AVR was still going through the procurement process – unlike the UPS units that CAAP expedited through an emergency procurement.

This meant that from August 27, 2022, until the noon of January 1, 2023, there was no functioning AVR. 

The consequences of this became evident when a fault occurred at 9:49 am, January 1, on a power transfer switch used by one of the communications equipment. The fault caused both UPS units to trip.

“CAAP technicians tried to close the maintenance bypass switch of the UPS to provide power via the bypass line. However, they failed to do so as the AVR was still in the ‘0’ position or switched off and the bypass supply was still de-energized,” the Senate report said.

Short circuit of power transfer switch

The power transfer switch, like the name suggests, transfers power to other sources in the event of a problem. On January 1, the switch itself short circuited, and protection devices downstream of the UPS also failed to stop the fault from doing further damage.

A short circuit, the Senate report noted, is considered “the worst power anomaly that not even a good UPS can sustain.”

The most likely cause of the short circuit is overheating as the switch input terminal and wiring were found to be melted. The independent audit team noted that this could have been prevented through regular inspection and maintenance by qualified personnel. (READ: Senators find no ‘proper maintenance’ of air traffic facilities)

No redundancy of equipment

Even though there were two UPS units powering critical air traffic management equipment, they were not redundant or independent of each other. The audit team reported that both UPS units had a parallel load-sharing scheme, meaning that a failure in either one would make both lose functionality.

“As evident in the New Year’s Day incident, a single fault or power outage brought down the entire CNS/ATM system,” the Senate committee report said.

Diaz confirmed that the latest upgrade done on Wednesday to the UPS now addresses this problem.

“Redundant na tayo. Halimbawa magkaroon po ng aberya ‘yung isa, ‘yun pong isa naman ay hindi maapektuhan. Ito po kasing dating nakalagay po, we found out na ‘yun pong dalawang UPS [are] not working independently. So pagkadiperensiya ‘yung isa, apektado din po ‘yung isa,” the CAAP deputy director general for operations said.

(We have redundant systems now. For example, if a problem occurs in one, it won’t affect the other. In the old system, we found out that both UPS units were not working independently. So if something happens to one, the other is also affected.)

Gov’t purchased P511-M Manila air traffic system in 2009 but never used it

Overvoltage destroys equipment

By 10:18 am, technicians were hoping to power up the UPS units by switching to generator sets, but power wasn’t coming into the units because the AVR was still turned off – the same way it had been since August 2022. 

It wasn’t until an hour and 40 minutes later that technicians finally placed the AVR on maintenance bypass mode and got one of the UPS units up and running.

But when that happened, an overvoltage occurred, literally frying crucial equipment, like the very small aperture terminal (VSAT), which receives satellite data used by planes and air traffic management systems. 

“Sparks and smoke were observed at the AMHS and Geo­ stationary satellite. One circuit breaker was turned off after they found it had an overcurrent of 344 volts,” the Senate report noted.

The overvoltage may have occurred because of a malfunctioning circuit breaker. This could have multiple possible causes, such as the loose connection of a neutral wire, which an interagency report noted could be “due to vibrations from high voltage running through the line.”

It could also be that the circuit breaker was “overdutied,” meaning that the available current is greater than the short circuit capacity of the circuit breaker – again, another engineering design flaw.

Root causes

What does this all mean? The root causes of the January 1 fiasco can be pinned down to the lack of proper and regular maintenance work, and the lack of engineering guidelines and competency in the design of the system.

“There was an inadequate maintenance program on critical CNS/ATM equipment based on the findings of both CAAP’s safety investigation team and the Senate’s independent audit team,” the report said, highlighting a lack of regular training validation and proper maintenance training for personnel.

The technicians onsite were not familiar with how to handle the circuit breaker. They were also not allowed to open the circuit breaker for regular inspections. Tamayo explained that CAAP was “only authorized to do a certain level of maintenance,” which meant that the breaker had to be kept sealed. Checking the inner workings of circuit breaker, it seemed, was a duty reserved for its manufacturer.

Besides this, CAAP had no step-by-step troubleshooting guidelines for technicians and engineers to follow when something does go wrong. Perhaps worse, there was even an inaccurate wiring diagram displayed for the UPS, which might have further delayed the restoration of power.

CAAP also had no backup system for communications and internet connection. This meant that when power died in the Air Traffic Management Center, the agency couldn’t even immediately issue a Notice to Airmen because there was no internet.

Neither did it have a master contingency plan in the event of a disruption of air traffic services – be it due to electrical failures, military activity, or severe weather. The plans that CAAP did have on hand did not meet International Civil Aviation Organization standards.

Is it time for the Philippines’ air traffic control to be privatized?

What should be done?

There wasn’t one party responsible for everything that happened on New Year’s Day. After all, the current air traffic management system of the Philippines – described by Transportation Secretary Jaime Bautista as 10 years behind Singapore – was dreamed up way back in 1997. 

Since then, the system and its issues have been passed along six presidents, 11 transportation secretaries, eight CAAP directors, and “many batches of poorly equipped engineers,” according to the Senate report.

So how do we fix this? The most immediate way forward is to follow several technical remedies suggested in the Senate report: 

• Replace the broken AVR
• Conduct a power quality analysis and energy audit, as well as a vulnerability assessment and penetration test of the air traffic management system
• Modernize the country’s Air Navigation Service Equipment 
• Procure backup supplies of critical equipment and spare parts for the UPS
• Procure an automatic fire suppression system for the UPS and battery rooms
• Procure explosion protection-rated equipment for the battery room

CAAP has acted on some of these recommendations – or at least it has done the first. That hasn’t stopped the agency from confidently proclaiming that its repaired UPS units and AVR “guarantee a continuous safe air traffic management within the Philippine Flight Information Region” and that “flight disruptions caused by equipment malfunction are now a thing of the past.”

“With the goal to address the lack of power system redundancy and robustness that contributed to the technical glitch last January 1, the automatic voltage regulator was made operational again and 2 New UPS were installed,” CAAP Air Navigation Service Chief Engineer Alex Balde said in a statement on Thursday, May 18.

The Senate also suggested that CAAP improve its personnel by hiring qualified electrical engineers and offering more competitive compensation packages. This comes after the agency revealed that the Philippines was losing air traffic controllers to countries that pay up to nine times more than rates here.

On the legislative side, the Senate report also urged lawmakers to exempt CAAP from the GOCC Governance Act and Salary Standardization Law. This would theoretically allow the agency to match these salaries and prevent the “​​brain drain phenomenon in CAAP.”

Congress is also looking to separate the regulatory and operational functions of CAAP, leaving it as the regulator of civil aviation matters and transferring the responsibility of air traffic management to another entity.

“As of now, CAAP is the regulator of civil aviation, it is the operator of the airports, and in any accidents or incidents or violations of other regulations, it is also the investigator – all built into one. So as you can clearly see, the conflict of interest in CAAP as to their duties and other matters that concerns them is really in big question,” Benjamin Solis, aviation advisor of the Safe Travel Alliance, said in a House committee hearing on Thursday.

CAAP itself supports this move. Among the suggestions floated was to transfer these functions from CAAP to a newly-created government authority – the Philippine Airports Authority – that would oversee the management of all airports in the country.

The Department of Transportation was also urged to fast-track the conduct of feasibility studies on the privatization of the Ninoy Aquino International Airport (NAIA). Bautista has repeatedly emphasized the openness of the Marcos administration to the idea of privatizing all four terminals of NAIA. 

In the meantime, a consortium of conglomerates has already presented the department with a P100-billion plan to rehabilitate NAIA, something that the transportation secretary is already assessing.

“The initial study is to have a solicited [proposal]. That’s the reason why we engaged ADB (Asian Development Bank) for help, for us to be able to entertain a solicited proposal. But since there is this unsolicited proposal, we have to work on it…. We are given 35 days to do the completion check, and that’s what we’re doing,” Bautista told reporters on May 10. 

And just days after these rehabilitation plans became public, flights at NAIA Terminal 3 were again paralyzed by a power outage on Labor Day, another incident among the many that continue to plague the country’s main gateway. – Rappler.com

His post covers a lot of territories that have become a source of big money for the corrupt: from management of the country’s airports to procurement of car and motorcycle plates to port operations, among others. 

“Are you up for the fight?” I asked him in one of our one-on-one conversations. 

“I’m here to initiate changes,” Bautista replied. “If the President feels that I’m not up for the job, I’d gladly give it up. But to say that I’d be intimidated by those financing these baseless attacks, they’re greatly mistaken.”

He knows that, in changing the status quo, he’d be met with violent opposition. For instance, periodic system failures in the country’s airports are used by his detractors to bring him down every step of the way. Never mind if he’s just starting to see what can be done to improve the decrepit airports (notably, NAIA 1, 2 and 3) that he inherited from past DOTr administrations.

Bautista has a long list of achievements in the private sector. He could have easily enjoyed his retirement, but the call of duty, he told me, “is hard to ignore.” He previously served as president and chief operating officer of Philippine Airlines (PAL) from 2004 to 2012, and again from 2014 to 2019. He is an independent director of Premium Leisure Corporation and Nickel Asia Corporation; former executive and director in MacroAsia Corporation, Macroasia Airport Services Corporation, Macroasia Properties Development Corporation, and ETON Properties Philippines, Incorporated. He was also a former Treasurer of Tan Yan Kee Foundation, Incorporated and served in various executive capacities in the Lucio Tan group for 39 years.

Taking in the challenge of rehabbing the country’s airports means he has to have people whom he can trust and lean on. He plucked from retirement one of his PAL colleagues, Cesar Chiong, to handle the difficult task of initiating reforms in the country’s convolutedly-run airports.

In the short time that Chiong oversaw the day-to-day airport operations, he was able to deliver. Records show that from a cash balance of around P5 billion as of July 31, 2022, the Manila International Airport Authority (MIAA) now has a cash balance of P12.3 billion or an increase of 146%. From accumulated losses of P3.331 billion for calendar years 2020 and 2021, MIAA also recorded a net income after tax of P1.7 billion as of end-December 2022.  

According to Bautista, the on-time performance of flight departures has also vastly improved. 

Anonymous complaint 

The Office of the Ombudsman, however, suspended Chiong without pay for up to six months based on an anonymous complaint accusing him of grave abuse of authority and misconduct for reassigning about 285 MIAA employees without providing a reason for the reassignment.

On May 8, Chiong through his counsels Rondain & Mendiola, filed before the Ombudsman an urgent motion to lift his preventive suspension. From my reading of the entire motion it was clear to me that there was presumption of regularity when Chiong did what he was accused of.

Salient points of the motion: When he assumed his functions and duties around first week of August 2022, Chiong was granted by the MIAA Board of Directors the authority to reassign MIAA personnel “as the exigencies and interest of the service require.” 

About 201 or 70% were regular reassignments of airport police personnel to widen their exposure to various security challenges and issues in an airport setting. This move is part of their career development program and in line with security requirements in the airport terminals being operated by MIAA. 

Moreover, these reassignments were done upon the recommendation of the Airport Police Department chief and the assistant general manager for Security and Emergency Services. 

Starting July 2018, all reassignments of airport police officers have to be done through an office order to be signed by the MIAA general manager to comply with Civil Service Rules on Re-assignments. Previously, the reassignment of an airport police officer was covered by a department order signed only by the chief of Airport Police. 

With the approval of the general manager now a requirement, it is not surprising that Chiong’s name would figure prominently in an increasing number of official documents for these reassignments.

About 84 or 29.5% of the reassigned personnel were non-airport police employees who were temporarily assigned as officers-in-charge in view of the leave of absence of an incumbent, or those who required a designation change. The changes in designation were necessitated by ongoing organizational review and modification within the airport terminals managed by MIAA. 

Reassignments 

These 84 reassignments occurred over an eight-month period, from August 2022 to March 2023. Compare this number to the 103 non-airport police employees reassigned by then-general manager Eddie V. Monreal also over eight months, from August 2016 to March 2017. 

The appointments of all 285 reassigned employees were not station-specific,. This means that they may be reassigned to another station within MIAA in the exigency of public service or wherever their service is urgently needed and where any delay in its execution and delivery will adversely affect the efficient delivery of customer service. The reassigned employees suffered neither a demotion in rank or status nor a reduction in salary. 

According to Yangson vs Department of Education (G.R. No. 200170, June 3, 2019) a reassignment is presumed to be regular and made in the interest or exigency of public service unless proven otherwise or if it constitutes constructive dismissal (Sec. 13 [3], 2017 Omnibus Rules on Appointment and Other Human Resource Actions, Civil Service Commission, Revised 2018). Records show that, in the cases of the reassigned MIAA employees, none file any formal complaint about their reassignment. There was no demotion or salary decrease involved. This therefore establishes that the staff reassignments were all regular and made in the interest of providing better public service.

Since Chiong assumed office, his management initiatives have resulted in vastly improved MIAA operations that passed the United States Transport Security Administration Assessment Audit in 2022 and 2023. In fact, during the 10-day Holy Week this year, which is the peak travel season in the country, the MIAA airport experienced up to 90% on-time reliability, without the MIAA terminals getting congested despite the high volume of passengers.

Chiong’s lawyers argue: “Respondents respectfully contend, therefore, that the re-assignment of 285 employees in a period of less than one (1) year is not proof that respondents’ guilt of the charges made against them by the anonymous MIAA Officials is strong. On the contrary, the documents covering the re-assignment of 285 employees will show that respondents are not guilty of Grave Abuse of authority, Grave Misconduct or Conduct Prejudicial to the Best Interest of the Service.”

Read Part 2

– Rappler.com

Val A. Villanueva is a veteran business journalist. He was a former business editor of the Philippine Star and the Gokongwei-owned Manila Times. For comments, suggestions email him at mvala.v@gmail.com.