Philippine airport project faces uncertainty as U.S. targets Beijing-owned companies

31, Aug. 2020

Photo by Ian Panelo from Pexels
Photo by Ian Panelo from Pexels

MANILA, NNA – The fate of an international airport project in Cavite province seems to be hanging in the balance following the United States' economic blacklisting of 24 Chinese state-owned businesses allegedly involved in building and militarizing artificial islands in the disputed South China Sea.

The issue came to light when it was found that among them are subsidiaries of China Communications Construction Co. (CCCC), a transport and infrastructure conglomerate, which is set to build the $10 billion Sangley Point International Airport near Manila with a local partner.

In February this year, the partners won the tender to construct the initial phase of the project.

Now the question is whether the project would go ahead with their involvement after a CCCC subsidiary was revealed to have reportedly helped build artificial islands in an area claimed by both the Philippines and China.

This was pointed out by U.S. Secretary of State Michael Pompeo when he expressed concern that CCCC had led "the destructive dredging of the PRC’s South China Sea outposts.

A CCCC’s subsidiary, China Harbour Engineering Company, together with a unit of Philippines' Udenna Corp, has been given initial approval for a $1.2 billion reclamation project in Manila Bay. Udenna is a conglomerate run by Dennis Uy, a local tycoon with close ties with Philippine president Rodrigo Duterte.

In a television interview, Cavite governor Jonvic Remulla said the provincial government would terminate the airport building agreements immediately if Duterte and the department of national defense deem the partnership with the Chinese company a “national security risk.”

Cavite had awarded the first phase of the airport project to the CCCC and MacroAsia Corp. of the Lucio Tan Group, a Philippine conglomerate with wide interests ranging from banking and aviation to real estate and education.

Under the deal, the Filipino-Chinese consortium, which would serve as the joint venture partner of the Cavite provincial government, would develop the airport’s first runway designed to serve 25 million passengers a year.

Remulla said the joint venture deal between CCCC and MacroAsia is expected to be fully sealed in a month.

In a separate TV interview, Teodoro Locsin Jr., the Philippine secretary of foreign affairs said he would recommend that government agencies end contracts with Chinese companies involved in unlawful reclamation activities in the South China Sea.

Meanwhile, Philippine defense secretary Delfin Lorenzana declined to comment on the matter.

“I decline to comment as I don’t know the facts, save what is in the newspapers,” he told NNA.

Last week, Lorenzana reportedly accused Beijing of occupying Philippine maritime territories after Chinese foreign minister Zhao Lijian claimed that Manila was violating Beijing’s sovereignty and security in the contentious South China Sea.

In 2016, the Philippines won an arbitration case against China over one key maritime dispute.

Backed by the United Nations, the court ruled that the Philippines has exclusive rights over the West Philippine Sea, which forms part of the South China Sea. It also ruled that China's 'nine-dash line' claim over the disputed waters is invalid.

However, China has never recognized the verdict.

Ties between Manila and Beijing have warmed since President Duterte took office in 2016 and pursued his “independent" foreign policy by detaching from the United States and cultivating stronger bonds with China.

The Philippine government has signed deals with several Chinese companies in areas such as renewable energy, infrastructure and telecommunication. Duterte recently accepted China's offer to prioritize the Philippines once its coronavirus vaccine has been developed.

Last week, the United States singled out 24 Chinese companies as well as individuals in its sanctions against Beijing over the South China Sea reclamation. China has slammed the move as unjust.

Last year, an Udenna official told the media that Uy was not concerned when the company was asked to comment on its partnership with a Chinese company involved in a missile-equipped artificial island built by China inside the Philippines' 200-nautical mile exclusive economic zone.