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Gov’t urged to bid regional airport projects

business / Headlines
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Gov’t urged to bid regional airport projects

The Department of Transportation and Communications signaled it was pushing to bid out big-ticket airport and railway public-private partnership (PPP) deals before this administration ends, but doubts remain as bidders flagged fresh concerns.

Projects being handled by the DOTC account for more than 70 percent of the 15 deals valued at more than P450 billion that are listed as “under procurement” in the PPP Center list.

Of those, two projects are already considered ready for bid submission—the bundled contracts for the Bacolod-Silay, Iloilo, Davao, Laguindingan, and New Bohol airports valued at P108 billion and the operations and maintenance of the Light Rail Transit Line 2.

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The DOTC has delayed submissions for both and its latest bid bulletin did not indicate any specific deadline.

“I’m pushing as far as I can to make it happen,” Transportation Secretary Joseph Abaya said in a text message Tuesday. “There are pending issues we want to address before finalizing the CA (concession agreement).”

With President Aquino’s term ending this June, bidders said the bid submission would need to happen by early May to ensure that an award could happen before the change in leadership. PPP projects under procurement are exempted from the election ban.

Jose Ma. K. Lim, president of Metro Pacific Investments Corp., said last week that outstanding issues remained even for the LRT-2, the smallest of the three elevated railway lines in Metro Manila. Metro Pacific and Ayala Corp. have teamed up for this project. The two groups previously won the LRT-1 Cavite extension PPP.

Lim said a bid submission on the LRT-2 was uncertain because the DOTC has not given any timetable for the western extension of the railway line.

Moreover, the venture was cautious over how it would be compensated for the rehabilitation of the LRT-2’s ageing fleet, which Lim said covered “more or less half the fleet.” Metro Pacific and Ayala are having a similar disagreement with the DOTC over its compensation for rehabilitating LRT-1’s infrastructure, described as worse off than what was was outlined in their contract.

“It’s hard to bid in this case, when there are too many variables,” Lim said. “The government is not giving any commitment on timetables for that extension. So we have to assume the worst.”

For the regional airports, Lim said they were urging the DOTC to bid out the project before President Aquino steps down to avoid further delays usually associated with a change in administration.

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Other groups looking at the deal, which include San Miguel Corp., Aboitiz Equity Ventures, the Filinvest Group and Megawide-GMR,  have indicated that they were ready to submit their offers.

Even projects that have already been awarded are facing issues.

Lim noted that the LRT-1 extension phase to Cavite province, initially slated for completion in 2020, could be delayed due to uncertainties in the delivery of right-of-way and the recent failure of the DOTC to buy more train coaches.

The DOTC said the train procurement, backed by a loan from the Japan International Cooperation Agency, failed because of the supply squeeze in Japan due to its preparations ahead of the 2020 Summer Olympics in Tokyo.

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TAGS: Airport, Business, Department of Transportation and Communications, economy, News, PPP, Projects, public-private partnership, regions
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