Php. 9.1B for Airport Development


A party-list lawmaker said on Sunday the Department of Transportation and Communications (DOTC) is set to spend a total of P9.1 billion next year to upgrade 31 international and domestic airports.

House Deputy Minority Leader and LPG-MA Rep. Arnel Ty said the bulk of the DOTC’s 2016 budget for aviation-related development projects will go to Panglao International Airport (P2.136 billion); Clark International Airport (P2.093 billion); and Naga Airport (P1.002 billion).

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Calbayog Airport (Image Source: calbayogevents.blogspot.com)

“Some of the money will be for new construction and facilities, and some for continuing projects,” said Ty, a member of the House transportation committee.

Moreover, the lawmaker said that domestic and international air-travel explosions due to falling aviation jet fuel prices would benefit the national economy.

Buoyed by lower fuel costs, the country’s two dominant carriers—Cebu Pacific Air and Philippine Airlines—now offer new promotional fares for domestic, as well as international destinations.

“Last year higher fuel prices accounted for 40 percent to 49 percent of the operating costs of Philippine Airlines and Cebu Pacific Air. This year lower fuel prices represent just 30 percent to 39 percent of their operating costs,” Ty said.

“If we look at how Filipinos are spending their savings from cheaper air fares, the money appears to be going mainly to travel-related expenses, including increased food consumption in airport terminals,” he said.

The higher consumption spending spurred by the drop in fuel prices contributes to overall economic growth, according to the lawmaker.

Airports getting fresh development funding:

  • Antique Airport-P10 million
  • Bagabag Airport-P11.8 million
  • Basco Airport-P33.2 million
  • Bicol International Airport-P747.4 million
  • Butuan Airport-P2 million
  • Calbayog Airport-P203.6 million
  • Cauayan Airport-P198.0 million
  • Cotabato Airport-P51.5 million
  • Dipolog Airport-P25.4 million
  • Laoag International Airport-P13.5 million
  • Ozamiz Airport-P20 million
  • Puerto Princesa International Airport-P68.1 million
  • Roxas Airport-P95.4 million
  • San Jose Airport-P185.7 million
  • San Vicente Airport-P34 million
  • Sanga-Sanga Airport-P577.7 million
  • Siargao Airport-P264.1 million
  • Siquijor Airport-P40.8 million
  • Taytay Airport-P8.8 million
  • Tuguegarao Airport-P194.6 million
  • Virac Airport-P32.6 million
  • Zamboanga International Airport-P160.1 million.

Source: Jovee Marie dela Cruz, http://www.businessmirror.com.ph

CAAP: Only 41 of 82 Philippine Airports Operate Commercially


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MANILA – Senators told officials on Thursday not to let certain idle airports in different parts of the country remain unused and instead work to generate economic activity and income from them.

At a hearing on the proposed 2016 budget of the Department of Transportation and Communications, Director-General William Hotchkiss of the Civil Aviation Authority of the Philippines (CAAP) said his agency owns and operates 82 airports all over the country.

However, only about 41 have commercial operations. The rest are either idle or are used as flying schools and for military flights.

“What a waste,” Senate finance committee chair Loren Legarda said. “Is this customary…or are we wasting infrastructure which can be upgraded so we can have more domestic flights?”

Hotchkiss told the committee that airport authorities are now on a “catching up” mode, developing some airports for commercial purposes while upgrading others for military use.

However, he said having commercial airlines use some of the airports is beyond CAAP’s control.

“Getting commercial flights into an airport is an economic and business decision of the airlines themselves,” Hotchkiss said. “We cannot force them to fly to particular airports.”

Senate President Franklin Drilon said not every airport in the country was built with commercial viability in mind. Still, he advised CAAP to explore how to do business out of them.

“Maybe you can start looking at converting them into some high-value usage,” he said.

Drilon, who hails from Iloilo, cited the example of the city’s old airport, which has been turned into a business center by a private developer.

Legarda agreed. “When you keep and maintain the whole 82, there’s so much capital outlay or good money that can be used elsewhere,” she told airport officials.

Hotchkiss said CAAP is already heading towards that direction, with a plan “geared towards maximizing the full potential of the airports we have.”

He said five airports will be upgraded under government’s public-private partnership program, while a number have been selected for use by some 45 flying schools all over the country.

“We can maximize our potential as a flying school capital in the ASEAN region,” Hotchkiss said.

Source: Ryan Chua, ABS-CBN News

San Miguel Corporation Eyes Airport Contracts


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Image Source: ramzkie.com

San Miguel Corp.(SMC) is keen on bidding for provincial airport public private partnership (PPP) contracts to be auctioned by the government, company president Ramon S. Ang said, signaling the conglomerate’s intention to continue growing its transport infrastructure portfolio.

Ang said in a text message Friday that SMC had bought bid documents for the auction, which so far includes airport deals in Iloilo, Bacolod-Silay, Davao, Laguindingan and Bohol, to be packaged into two separate bundles.

SMC, which has diversified its assets to include oil refining and tollroads, already operates the Godofredo P. Ramos Airport, better known as the Boracay Airport, which is the closest gateway to Boracay Island, one of the Philippines’ most popular tourist destinations.

SMC partnered with South Korea’s Incheon International Airport in 2013 for the P17.5-billion Mactan Cebu International Airport PPP, although the tandem lost to a consortium led by Megawide Construction Corp. and India’s GMR Infrastructure.

Gokongwei-led JG Summit Holdings Inc. and Megawide also acquired bid documents for the provincial airport auction, the PPP Center and their respective officials confirmed.

Manuel V. Pangilinan-led Metro Pacific Investments Corp. is in separate talks with JG Summit to revive a partnership from the Cebu airport PPP deal to bid for the five airport projects, a stock exchange filing showed on Friday.

The PPP Center on Friday confirmed that at least three groups had so far acquired bid documents for the provincial airport PPP, which was rolled out earlier this month.

The Department of Transportation and Communications is seeking private sector support to upgrade and operate the five air gateways, which have been selected for their growing tourism and business prospects. Some of the deals would also require significant capital spending, the DOTC noted.

The DOTC said Davao Airport, which handled 2.76 million passengers in 2013, would require the largest capital spending with a total development cost of P40.57 billion.

Significant spending swould also be required for Iloilo (P30.4 billion) and Bacolod (P20.3 billion).

In its instructions to bidders, the DOTC included a revised timeline, with the submission of pre-qualification documents now set on May 18 this year.

It has yet to specify a bid submission date.

However, the instructions showed that the project was expected to be awarded by March 2016, a few months before President Aquino’s term ends by the middle of that year.

Source: Miguel R. Camus, Philippine Daily Inquirer

DOTC Rolls Out P116.2-B Bundled Contract For 6 Airports


MANILA, Philippines – The Department of Transportation and Communications (DOTC) started yesterday the search for a concessionaire to develop at the same time operate and maintain six provincial airports in a contract worth P116.2 billion.

In an invitation to prequalify and bid, the DOTC through the Civil Aviation Authority of the Philippines (CAAP) invited prospective bidders to finance, design, construct, operate, and maintain the Bacolod-Silay, Davao, Iloilo, Laguin-dingan, New Bohol (Panglao), and Puerto Princesa airports.

The biggest project is the P40.57-billion contract to improve the services and enhance the airside and landside facilities at the Davao international airport followed by the P30.4-billion contract for the Iloilo international airport.

Other projects are the Bacolod – Silay international airport worth P20.26 billion, the Laguindingan airport, P14.62 billion; Puerto Princesa airport, P5.81 billion; and New Bohol (Panglao) airport, P4.57 billion.

The DOTC said the 30-year concession contract would be awarded through a competitive bidding following the rules and procedures prescribed under the Build-Operate-Transfer (BOT) Law.

The DOTC is set to apply the two-stage/two-envelope system for soliciting bids under the BOT Law.

The private sector concessionaire for the Bacolod-Silay, Davao, Iloilo, and Laguindingan airports would take over the operations and maintenance; undertake immediate expansion of the passenger terminal buildings, apron, other airside and landside facilities; and any capacity augmentation to cater to future demand throughout the contractual term.

Likewise, the private proponent would also take over the operations and maintenance of the New Bohol (Panglao) and Puerto Princesa airports.

The DOTC pointed out that the traffic at the six provincial airports has either exceeded or is nearing their design capacity levels making the fast and proactive development crucial.

Traffic at the Davao international airport has been growing at an annual rate of 10.56 percent over the past five years and handled 2.79 million passengers last year making it the third busiest airport in the Philippines after the Ninoy Aquino International Airport (NAIA) as well as the Mactan – Cebu international airport.

Volume of passenger at the Iloilo international airport has been growing at an average rate of 11 percent over the past five years to hit 1.82 million last year making it the fifth busiest airport in the country.

The Laguindingan airport is the sixth busiest airport in the country as volume increased averaged 15.1 percent to hit 1.78 million last year followed by the Puerto Princesa with an average increase of 22.8 percent to hit 1.33 million, and the Bacolod-Silay international airport with an average growth of 9.6 percent to reach 1.32 million last year.

The DOTC has tapped a loan from the Japan International Cooperation Agency (JICA) to put up the New Bohol airport in Panglao Island that would replace the Tagbilaran airport once completed in the middle of 2017.

Source: Lawrence Agcaoili, The Philippine Star