Chelsea offers to develop Davao, Bohol airports

The private sector’s surging interest in the upgrade of the inadequate air infrastructure in the Philippines has reached President Duterte’s home turf.

Chelsea Logistics Holdings Corp., controlled by businessman Dennis Uy, disclosed to the Philippine Stock Exchange yesterday that it had submitted an unsolicited proposal to develop and operate the Davao and New Bohol (Panglao) International airports.

The offer, which Chelsea said was first submitted on Feb. 5, sought a 30-year concession and estimated the project cost at P67 billion.

Uy is a known friend of President Duterte, who was the longtime mayor of Davao City before becoming President in 2016.

In a text message, Uy said airports were an attractive investment for Chelsea, which went public last year amid a string of logistics acquisitions.

“Yes [there’s] big opportunity in logistics, tourism and legacy because I’m from Davao,” Uy said yesterday.

Chelsea’s offer could partly compete with another bid made by a unit of conglomerate Aboitiz Equity Ventures, which submitted an offer for four gateways: Iloilo International Airport, Bacolod-Silay Airport, Laguindingan Airport, and New Bohol.

The move marks Uy’s initial foray into the infrastructure space, which the Duterte administration had made a cornerstone of economic policy via its “Build, Build, Build” initiative.

“We will modernize both Davao and Panglao international airports into world-class airports without government subsidy by implementing the development in three phases with an estimated total project cost of P67 billion,” Chelsea president & CEO Chryss Alfonsus Damuy said in a statement.

Chelsea is expecting further traffic growth at both airports. It noted that passenger terminal buildings would also be “reconfigured” under its proposal.

The group also plans to build a new full parallel taxiway in Davao, which can accommodate up to 30 takeoff and landing events per hour.

“If the government approves the [Chelsea] proposal in 2018, improvement of passenger experience and benefit to the community will start next year,” Damuy said.

By the end of the concession period, Davao International Airport’s cargo terminal will be almost three times its current capacity while Panglao International Airport’s facility will be expanded by 25 percent.

The two airport projects were once part of the pipeline of public private partnership projects. They were later unbundled by the Duterte administration, before the PPP project was scrapped altogether in favor of official development assistance funding.

The government has so far received six unsolicited bids for various airport projects in the country, with a combined project cost of about P2 trillion.

Unsolicited offers will need to undergo a competitive challenge if approved by the board of the National Economic and Development Authority.