The Duterte administration will proceed with the auction of airports in Visayas and Mindanao within 2018, effectively shelving multibillion-peso unsolicited offers from the Aboitiz Group and businessman Dennis Uy.
Manuel Antonio L. Tamayo, undersecretary for aviation at the Department of Transportation, said they intended to bid out operations and maintenance deals for airports in Bacolod, Iloilo, Laguindingan and Davao.
“The guidance from the secretary is we will bid it out,” Tamayo said, referring to Transportation chief Arthur Tugade. The auction can proceed within the year, once the final go-ahead is secured from the National Economic and Development Authority, he added.
The development marks the latest turn in a long-running goal to privatize operations of key provincial air gateways—a Public Private Partnership (PPP) project carried over from the previous administration.
It was not bid out in 2016 due to its proximity to the election period, and under President Duterte was removed from the PPP pipeline altogether. Despite a series of major changes— the project originally included the New Bohol International Airport in Panglao and the airports were packaged into bundles— the interest of the private sector never waned.
With the exception of New Bohol, which opens in August this year, all the rest need expansion and upgrades since they currently serve more passengers than they can handle.
On Feb. 5, Uy-led Chelsea Logistics Holdings Corp. submitted a P67-billion offer to expand and operate Davao, the country’s biggest gateway after Manila and Cebu, and New Bohol via a 30-year concession.
Then on March 7, Aboitiz InfraCapital offered to expand and operate the airports in Iloilo, Bacolod, Laguindingan and New Bohol. Its offer involved P148 billion in investments and a 35-year concession.
Tamayo said funding details on the various regional airports were still being finalized.
Unsolicited projects, if accepted and approved by the government, would need to undergo a Swiss challenge. This process opens the project to rival bid offers but grants the so-called original proponent the right to match other offers.
This is not the first time the Duterte administration decided to drop unsolicited private sector proposals involving major infrastructure projects.
Big groups such as the venture between JG Summit Holdings Inc. and Filinvest Development Corp.; Metro Pacific Investments Corp., and the Megawide Construction Corp.-GMR Infrastructure consortium last year submitted massive proposals for Clark International Airport in Pampanga province.
These were rejected when the government decided to finance the expansion of Clark and later privatize its operations and maintenance. Those O&M bid terms are soon due for release.
Business groups are coming forward with their own ideas on airport development in part due to the urgent need to address constraints in the country’s air gateways.
The biggest prize here is the upgrade of Manila’s Ninoy Aquino International Airport. The Naia consortium, comprised of seven conglomerates including Ayala Corp. and Lucio Tan’s Asia Emerging Dragon, and Megawide-GMR have thus far submitted their respective proposals. The government has yet to act on the Naia project.