6 provincial airports bundled into PPP

The Department of Transportation and Communications (DOTC) on Monday rolled out its next airport public-private partnership (PPP) deal, which involves the bundling of major provincial airport projects valued at P116 billion.

The PPP project involves turning over to the private sector the maintenance and operations contracts of airports in Bacolod-Silay, Davao, Iloilo, Laguindingan, New Bohol (Panglao) and Puerto Princesa, which are gateways to major tourism and business destinations across the country.

This comes a year after the government auctioned its first airport PPP, the P17.5 billion Mactan Cebu International Airport. The Cebu airport project drew competitive bids from major conglomerates and was eventually bagged by a consortium between Megawide Construction Corp. and India’s GMR Infrastructure.

The DOTC, which did not indicate a deadline for qualification documents for the provincial airports, said some of these projects would need immediate expansion, either in terms of capacity or other facilities.

It said this would cover the Bacolod Silay International Airport (P20.26 billion), Davao International Airport (P40.57 billion), Iloilo International Airport (P30.4 billion) and Laguindingan Airport (P14.62 billion).

For those projects, the DOTC said “the private sector proponent shall take over the operations and maintenance of the airport, undertake immediate expansion of the passenger terminal building, apron, other airside and landside facilities and any capacity augmentation of the airport” needed to meet future demand.

For the gateways in Panglao and Puerto Princesa airport, the DOTC said the O&M contract would be turned over to the private sector upon completion of ongoing construction activities.

The New Bohol (Panglao) Airport is expected to be completed in 2017 although no schedule was provided for the Puerto Princesa airport.

The bid invite also did not detail in what way the provincial airport deals would be bundled. Investors, in a previous forum discussing this matter, said it was important for the projects to achieve scale in terms of passenger volume so they could lure major international airport operators.

The DOTC is also studying the privatization of the O&M and possible expansion of the Ninoy Aquino International Airport in Manila, the country’s busiest gateway.

Transportation Secretary Joseph Abaya said the plan was being reviewed and consultants have been procured. He noted that it was possible to bid out the Naia project under a PPP structure before President Aquino steps down in 2016.