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Gov’t awards Clark airport deal

Showcase of speed of hybrid PPP scheme, gov’t commitment to boost infrastructure
/ 05:35 AM December 20, 2017

The Duterte administration awarded on Tuesday a contract to design and build a new passenger terminal for the Clark International Airport in Pampanga, a showcase of both its commitment to upgrade crucial transport infrastructure and the speed by which hybrid public-private partnership (PPP) deals could move.

The New Clark International Airport Terminal project’s engineering, procurement and construction (EPC) contract was awarded to a venture between Megawide Construction Corp. and India’s GMR Infrastructure yesterday. The new terminal would triple capacity at Clark Airport to 12 million passenger annually by 2020.

The EPC deal was rolled out last August by the Bases Conversion and Development Authority.

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The BCDA, in a statement yesterday, called it the “fastest” PPP to be auctioned by the national government. The project, which was given the go-ahead by President Duterte last June, is slated to have its groundbreaking event today.

The Clark Airport expansion project is the first under the administration’s hybrid PPP format. Under this scheme, the government will pay for the construction of the terminal while the private sector will later be invited to bid for the operations and maintenance (O&M) component.

Jake Bingcang, chair of the BCDA special bids and awards committee, said earlier that they hoped to award the O&M contract by March 2018.

It should be noted that the new Clark Airport terminal EPC deal is relatively less complex than previous PPPs since it did not yet include any O&M. The O&M was typically bundled in with similar PPP deals during the Aquino administration.

Nevertheless, the administration wanted the auction to display how fast it could launch and award contracts via the hybrid PPP route since the procurement process is often cited as a cause of delay for infrastructure projects.

The BCDA kept a tight deadline, accepting bids for the construction of the new passenger terminal last Dec. 5. With the awarding on Monday, the entire process of evaluating, opening technical and financial offers was compressed to two weeks.

The Duterte administration wants to expand Clark Airport, which it sees as a viable alternative to congestion in Manila’s Ninoy Aquino International Airport. It is also moving forward with a Japan-funded railway system that will link Manila and Clark by 2022.

Megawide-GMR, which operates and is expanding the Mactan Cebu International Airport, earlier submitted the best offer to build a terminal with a capacity of eight million passengers a year at the least cost to government.

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It bested four other groups, including large state-owned companies from China. Megawide-GMR offered P9.36 billion, about 25 percent below the governments’ ceiling price of P12.55 billion. This was lower than the offers of Tokwing Construction Corp. and China Machinery Engineering Corp. (P12.45 billion), China State Construction Engineering Corp. Ltd. (P12.298 billion), China Harbour Engineering Co. Ltd. (P11.73 billion) and Sinohydro Corp. Ltd. (P10.68 billion).

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TAGS: Clark International Airport, Duterte Administration, hybrid public-private partnership (PPP), Infrastructure
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