Airport PPP projects to be auctioned off

MANILA, Philippines–The government is looking at auctioning off several provincial airport public private partnership (PPP) deals later this year while authorizing the hiring of consultants to study the possibility of bidding out the country’s busiest airport, Ninoy Aquino International Airport in Manila.

PPP Center executive director Cosette Canilao told reporters that the provincial airport  deals are for Laguindingan, Panglao (Bohol), Puerto Princesa, Iloilo, Davao and Bacolod.

These would be a combination of operations and maintenance contracts with expansion components, depending on the need.

“We are looking at one bidding process but several packages,” Canilao said while adding they have yet to finalize how the airport projects would be bundled.

This was moving ahead of a the potential plan to auction out the operations of Naia, an aging gateway that handled about 32 million passengers last year. Naia has been facing congestion issues given its inability to keep up with rising demand for air travel.

The Department of Transportation and Communications is already reviewing a proposal to build a 2.3-kilometer parallel runway to complement the existing 3.4-km primary runway. This will allow Naia to accommodate more takeoff and landing events and ease air traffic congestion, which costs airlines an estimated P7 billion annually on top of delays for passengers. Any privatization of Naia’s operations is expected to draw significant private sector interest, which is why the government is exploring this option.

“The Naia O&M (operation and maintenance) and development plan is a different transaction,” Canilao said.

“DOTC has already asked PDMF support to hire consultants for that,” Canilao said, referring to the Project Development and Monitoring Facility.

PDMF is a revolving pool of funds from the Philippine and Australian governments to enhance investments in PPPs.

Canilao said the government is looking at auctioning off PPP deals recently approved by the National Economic and Development Authority, chaired by President Aquino. Among the more than $1 billion infrastructure deals that would be ready for bidding in the second half of 2014 include the Bulacan Bulk Water Supply Project (P24.4 billion), New Centennial Water Supply Source Project (P18.7 billion) and the Light Rail Transit Line 2 operations and maintenance contract.