MANILA, Philippines – The Caticlan airport is all set for a P2.5-billion expansion into an international airport.

The government, through the Department of Transportation and Communication, signed Monday a concession agreement that would enable project proponent Caticlan International Airport Development Corp. (CIADC) to proceed with the development under a 25-year build-operate-transfer scheme.

Under the agreement, the CIADC has up to seven years to build and expand the airport and 25 years to operate the facilities. Once the President and other key government officials approve CIADC’s operation, the 25-year period can start even before the seven-year timeline ends.

“This public-private partnership ensures that our government’s infrastructure projects are developed at no cost to our government,” Transportation Secretary Leandro Mendoza said in an interview.

CIADC chairperson George Yang noted that the Caticlan project would be “the first ever privatization of an airport terminal in the country.”

Financial adviser Joey Valdes said the P2.5 billion would come from 30-percent equity and 70-percent debt from a mix of government and private banks.

Valdes added that the airport would have a commercial component to be supported by Akean Resorts Corp., which will build hotels, hotel-resorts and other commercial establishments on a 16-hectare area beside the airport.

“The commercial component could easily reach P10 billion,” he said.

“We also expect that airline rates will be more competitive for passengers since airlines can use aircraft with more seating capacity than the turbo-propellers they are using now,” CIADC president Lino Barte said. That means more revenue opportunities for CIADC.

Yang said the company would also apply for tax benefits under the new Tourism Act, which supports sustainable tourism developments.