The Philippines’ Governance Commission for Government-Owned or -Controlled Corporations (GCG) has decided to abolish two government-owned and -controlled corporations (GOCCs) involved in aerospace and railway development for not performing their mandates, according to Finance Secretary Carlos Dominguez III.
The finance chief, who is an ex-officio member of GCC, said the decision to abolish the Philippine Aerospace Development Corp. (PADC) and North Luzon Railways Corp. (NLRC) was raised during a GCG meeting on December 15.
The state-owned aerospace and defence technology corporation was established on September 5, 1973 through Presidential Decree (P.D.) No. 286 as restructured and amended by P.D. No. 696.
PADC is mandated to undertake business and development activities for the establishment of a reliable aviation and aerospace industry in the Philippines. It is tasked to design, manufacture, and sell all forms of aircraft, and to develop local capabilities in the maintenance, repair, and modification of aviation equipment.
“They are supposed to design a plane. It’s been 45 years already and they have not designed a plane yet,” Dominguez claimed.
Several reports showed PADC in the 1980s developed the first indigenous helicopter, the Hummingbird, and a prototype aircraft, Defiant 300. After the initial development stage, the Hummingbird project was deactivated due to lack of budget. Moreover, the helicopter was basically an improvement of the German MBB Bo 105 helicopter, and the German manufacturer of the Bo 105 threatened to impose sanctions on PADC.
Defiant 300, meanwhile, was to have been followed by a larger version, but the project languished soon after the prototype was developed because of lack of government support.
In 1997, then president Fidel Ramos authorized spending for the two projects, but a year later, then president Joseph Estrada terminated the projects, deeming them unjustifiably lengthy and expensive.
NLRC will also be abolished because “that one is [of] no use already,” Dominguez said. Budget Secretary Benjamin Diokno, also an ex-officio member of the GCG, earlier said the GOCC commission had recommended the deactivation of NLRC.
NLRC was created in 1995 to implement the Northrail Project, a major undertaking of the Philippine government which aims to build a fast, reliable, and efficient railway system in Central and Northern Luzon. The railway system is expected to further enhance the development and growth potential of the two areas. NLRC is an attached agency of the Department of Transportation and a subsidiary of the Bases Conversion and Development Authority.
The GOCC, however, was embroiled in a five-year row with a Chinese machinery conglomerate over a dropped rail deal for a project to connect Metro Manila and Clark International Airport. Last November, the Philippine government finally settled with the Chinese company out of court.
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