Duterte administration rolls out first PPP project

The Department of Transportation under the Duterte administration has rolled out its first public-private partnership (PPP) project: An auction for the modernization and operations of five regional airports.

The P108-billion PPP auction for the Bacolod-Silay, Davao, Iloilo, Laguindingan and New Bohol (Panglao) air gateways, a carryover from the Aquino administration, is now being re-offered to private sector investors, but with a drastic change.

In line with a recent decision by the board of the National Economic and Development Authority (Neda) chaired by President Duterte, the DOTr said the airports would be offered individually.

That means bidders would make a separate offer for each airport, in contrast with the previous structure wherein the five airports were grouped into two separate packages.

This so-called unbundling was earlier criticized by would-be bidders as changing the rules midstream. At least one potential participant, who spoke on condition of anonymity, said that decision meant further delays since the project “was starting from scratch.”

The most prized among the regional airports is the Davao International Airport, currently the country’s third-busiest after Manila’s Ninoy Aquino International Airport and Mactan-Cebu International Airport. Davao handled 2.8 million passengers in 2012, a figure that likely swelled since that time, the DOTr said.

Iloilo, the country’s fifth-busiest, handled 1.9 million passengers that same year, Laguindingan closed 2012 with 1.6 million passengers, followed by Bacolod-Silay with 1.3 million passengers.

The New Bohol airport, being built through a loan from the Japan International Cooperation Agency (Jica), will be finished by 2019 and will replace the existing Tagbilaran airport. New Bohol has a design capacity of 1.7 million passengers annually.

“The fact that the traffic at these airports has either exceeded their current design capacities or is nearing the design capacity levels, coupled with the anticipated influx of a growing number of domestic and international passengers in the years to come, the fast and proactive development of these airports is crucial,” the DOTr said in its bid invite.

A bid date was not yet set. Transportation Undersecretary for Aviation Roberto Lim earlier said he hoped to complete the process in the first half of 2017.

The regional airports PPP was among the projects considered most ripe for auction. The actual bid date during the Aquino administration was postponed because it fell so close to the May 9, 2016, polls.

Due to the significant change this time around, the PPP project is being opened to new bidders. However, those who prequalified before would be automatically qualified for this round “provided that there are no changes in their legal, technical and financial capacity,” the DOTr said.

The original prequalified groups were Metro Pacific Investments Corp., which partnered with Aéroports de Paris and TAV Havalimanlari Holdings A.S; San Miguel Corp. and South Korea’s Incheon Airport; Aboitiz Equity Ventures with VINCI Airports;  Megawide Construction Corp. and India’s GMR Infrastructure, and the Filinvest Group with Japan’s Sojitz and Jatco.