No More PPP for Regional Airports


DVO Airport

The Duterte administration has scrapped the public-private partnership (PPP) of five regional airports according to National Economic Development Authority (NEDA). Both the Department of Transportation and Civil Aviation Authority (CAAP) also confirmed the termination of the bidding process for the New Bohol (Panglao), Davao, Iloilo, Laguindingan and Bacolod airports.

“The government, through the implementing agencies, the DOTr and CAAP, decided that the projects would be implemented through other modes,” according to the official statement.

With the termination of the PPP process, NEDA Undersecretary for Investment Programming Rolando Tungpalan said the hard infrastructure would now be funded through general appropriations while other modes of financing and implementation would be considered for the operations and maintenance (O&M) component of the projects which will be decided on ‘later.’

Iloilo Airport

 

 

 

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Metro Pacific To Bid for NAIA PPP


Metro Pacific Investments Corporation expressed interest in bidding for the P74.5-billion contract to operate and maintain Ninoy Aquino International Airport.

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Ninoy Aquino International Airport Terminal 3

“Yes, I heard about it…We are discussing. We will look at it. We don’t know the terms yet obviously,” Pangilinan, Metro Pacific chairman, told reporters over the weekend.

The National Economic and Development Authority board headed by President Rodrigo Duterte approved last September 14 the NAIA project, which involves awarding a 15-year to 20-year concession to the private sector to improve, operate and maintain the four terminals of NAIA.

Transportation Undersecretary for Aviation and Airports Robert Lim said the agency was in the process of finalizing the terms for the bidding of redevelopment, operation and maintenance of NAIA. “By January next year, we will release the advertisement to invite interested companies to bid in the project,” Lim said.

Other companies also expressed interest in joining the bidding. “We are very interested in the Naia when that is privatized,” Aboitiz Equity Ventures president and chief executive Erramon Aboitiz said earlier.

The private partner of the Naia PPP project will improve, upgrade and enhance the operational efficiencies of all existing terminals covering both landside and airside (except air traffic services) to meet the International Civil Aviation Organization standards and develop the main gateway airport of the Philippines.

It is a project of the Transportation Department and Manila International Airport Authority. The NAIA PPP project was one of nine projects approved by NEDA costing Php. 171.14 billion.

Source: Alena Mae S. Flores, http://thestandard.com.ph/

Review Urged on PPP Policy on Airline Entities


A HOUSE committee has advised the Department of Transportation and Communications (DoTC) and the Civil Aviation Authority of the Philippines (CAAP) to review the policy limiting the participation of airline-related entities in auctions for airport projects.

Bacolod Silay Airport

“The committee finds the need for DoTC and CAAP to revisit the provisions of the policy… imposing limitation on participation of airline-related entities in the bidding of regional airport projects and other future airport projects,” said Catanduanes Rep. Cesar V. Sarmiento, chairman of the House committee on transportation, in Committee Report 905 submitted early this month.

In August, the committee conducted an investigation into the alleged discrimination of airline-related entities in the bidding of airport projects.

In its report, the panel said the clear motive of the imposition of the 33% ceiling on the participation of airlines and airline-related entities in airport operations is to “prevent discriminatory practices against other airlines by the one which will be awarded with the concession agreement.”

“However, the DoTC and CAAP failed to show any basis for this fear during the deliberation,” the report said, adding that the situation the agencies seek to avoid is “precisely what the airlines and airline-related entities have been experiencing by the implementation of the questioned bidding rules.”

The report further noted that DoTC and CAAP’s “unsupported apprehensions are speculative and hypothetical whereas the discriminatory restrictions imposed on participation of airlines and related entities in the bidding of airport projects [are] crystal clear.”

There are ongoing procurement procedures for the regional airport projects — among them, Bacolod-Silay, Iloilo, Davao, Laguindingan and New Bohol — by the Public-Pivate Partnership (PPP) Center and DoTC.

The instructions to prospective bidders for the projects contain restrictions on the participation of airlines and their affiliates, such as the 33% ownership limit, among others.

The committee cited a report by the International Air Transport Association in May which showed that the restriction on ownership of airports by airline-related entities “unfairly discriminates against airline owners” and “there are already a number of cases globally where the airlines and the airport share the same ownership and the airport is considered world-class with no evidence of other airlines being subject to discriminatory practices.”

During the hearing in August, JG Summit Holdings, Inc. Vice-President Bach Johann Sebastian “averred that the restriction should be removed, emphasizing that airlines have inherent obligation to ensure fair and efficient operation of airports, and added that the fear of discriminatory practices could easily be addressed by the recently enacted Anti-Trust Law.”

Republic Act 10667 or the Philippine Competition Act prohibits all forms of anti-competitive agreements, abuse of dominant position and anti-competitive mergers and acquisitions, with the objective of protecting consumer welfare and advancing domestic and international trade and economic development.

Source: Kathryn Mae P. Tubadeza, http://www.bworldonline.com

MPIC Seeks European Partner For Airport Bids


MANILA – Infrastructure giant Metro Pacific Investments Corp. (MPIC) is in talks with a European company in its bid to land its first airport Public-Private Partnership (PPP) project.

Manuel V. Pangilinan, MPIC chairman, told reporters that their prospective partner prefers to bid for the five regional airport projects worth P108.2 billion as a single bundle.

“The single bundle is more the preference of the foreign strategic partners that we spoke with. If it’s two bundles, its quite small so they prefer a big bundle,” he added.

Pangilinan said this European company is bigger than their partner in their failed bid for the P17.5-billion Mactan Cebu international airport expansion project bagged by the tandem of Bangalore-based GMR Infrastructure and Filipino-owned Megawide Construction Corp.

The Department of Transportation and Communications (DOTC) has divided the five regional airports into two bundles so as to attract more investors in the dual-stage bidding process.

The first bundle consists of the P20.26- billion Bacolod – Silay airport and the P14.62-billion Laguindingan airport while the second bundle covers the P40.57-billion Davao airport, the P30.4 billion Iloilo airport, and the P2.34 billion New Bohol (Panglao) airport.

The government has extended the deadline to give interested companies more time to prepare their qualification documents. Six groups have expressed interest in the regional airports PPP projects.

Aside from MPIC, the other companies are JG Summit Holdings Inc. of taipan John Gokongwei, diversified conglomerate San Miguel Corp. (SMC), the GMR-Megawide Group, Philippine Skylanders, the Aboitiz Group, and Tokyo-based Sojitz Corp.

The regional airport projects form part of the 13 PPP projects worth P400.8 billion so far rolled out by the Aquino administration.

PPP projects that have been rolled out include the P123-billion Laguna Lakeshore expressway dike project, the rebidding of the P55.51 billion Cavite – Laguna expressway, the P50.2 billion regional prisons facility, the P24.4 billion Bulacan Bulk Water Supply project, the P18.72 billion New Centennial Water Source – Kaliwa dam project, the P17 billion Davao Sasa port modernization project, the P4 billion integrated transport system – South Terminal, the operation and maintenance of the Light Rail Transit line 2 (LRT-2).

The Department of Public Works and Highways (DPWH) is set to issue the Notice of Award to MPIC’s MP CALA Holdings Inc. after it topped the rebidding of Calax with a premium bid of P27.3 billion edging the P22.2 billion submitted by SMC’s San Miguel Holdings Corp.

The Aquino administration has already awarded nine PPP projects since 2010 with a total indicative cost of P136.37 billion.

Source: Lawrence Agcaoili, The Philippine Star

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

Transport Department Offers ‘Bundled’ Airport O&M Deals This Month


Iloilo International Airport

THE TRANSPORTATION department said it will offer six airport concession contracts in bundled form under the public-private partnership (PPP) program, with bid invitations expected within the month, though the exact combination of airports to be included in the two potential bundles will be determined after consultations.

On the sidelines of a ceremony in Calamba, Laguna marking the launch of train service to the town, Transportation spokesperson Michael Arthur C. Sagcal said the department will publish the invitation to bid for the bundled operations and management (O&M) contracts of six airports: Iloilo, Bacolod, Davao, Puerto Princesa, Laguindingan in Misamis Oriental, and Bohol.

“We will publish an invitation to bid for the bundling (of airports) within December,” Mr. Sagcal said.

The National Economic and Development Authority (NEDA) Board has authorized the rollout of the airport O&M contracts in the following amounts: P30.40 billion for Iloilo Airport; P40.57 billion for Davao Airport; P20.26 billion for Bacolod Airport; P5.23 billion for Puerto Princesa Airport; and P15.92 billion for Laguindingan Airport. In the case of the New Bohol (Panglao) Airport, the contract is a so-called “Enhanced O&M” worth P2.34 billion.

“Along the way, there will be market sounding and consultations, as before the bidding itself there will be a period wherein we hear prospective bidders’ comments on what makes the most sense in the bundling of the airports,” Mr. Sagcal said.

He added that “right now, what’s concrete is that where we’re starting from is possibly two western airports bundled together and three eastern airports.”

Other than the bundling of the airports, the Transportation department is also targeting a rollout of the first seaport PPP deal this month.

Department of Transportation and Communications Secretary Joseph Emilio A. Abaya told reporters last week that his department is seeking to publish an invitation to bid for the P18.99-billion Davao Sasa Port Modernization project.

“Davao Port is already approved, so we can publish an invitation to bid early next month. It is in our interest to roll it out before the year ends,” Mr. Abaya explained.

The NEDA Board on Oct. 17 approved the rollout of Davao Sasa Port Modernization project.

The winning bidder will be in charge of modernizing the port.

According to the PPP Center Web site, the Sasa project involves modernizing the port’s existing infrastructure and construction of new facilities like an apron, linear quay, container yards, warehouses, as well as expansion of its backup area and the installation of ship-to-shore cranes and rubber-tire gantries. The project will have a 35- to 40-year term.

Eight PPP projects have been awarded so far by the Aquino government since the late-2010 launch of this flagship infrastructure program: the P64.9-billion Light Rail Transit Line 1 (LRT-1) Cavite Extension; the P1.72-billion Automatic Fare Collection System; the P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building; the P2.01-billion Daang Hari-South Luzon Expressway Link Road; the P15.52-billion Ninoy Aquino International Airport Expressway; the P16.28-billion first phase of the PPP for School Infrastructure Project (PSIP); the PSIP’s P3.86-billion second phase; and the P5.69-billion Philippine Orthopedic Center modernization.

Source: Chrisee Jalyssa V. Dela Paz, BusinessWorld Online

GMR-Megawide looking forward to more airport bids


CEBU CITY — Listed builder Megawide Construction Corp. and its partner, Bangalore-based airport operator GMR Infrastructure Ltd., are planning to put in bids for six airport projects, a company official said, as the government studies plans to bundle the projects into a single public-private partnership (PPP) contract.

Two of the six airport projects, the P2.34-billion New Bohol (Panglao) Airport and the P15.92-billion Laguindingan Airport in Cagayan de Oro City, have been approved by the National Economic and Development Authority (NEDA) Board.

The four others — Iloilo, Davao, Bacolod and Puerto Princesa — have yet to be approved by the NEDA Board, PPP Center Executive Director Cosette V. Canilao said in an e-mail to BusinessWorld. Project costs have also to be finalized.

There is “no definite decision on the bundling of airports yet,” Ms. Canilao said.

Manuel Louie B. Ferrer, president of GMR-Megawide Cebu Airport Corp. (GMCAC), said “it makes sense” for the partnership to bid for the other airport deals because it bagged the first airport PPP contract.

The 25-year PPP contract for the operation and maintenance of the Mactan Cebu International Airport terminal, with an estimated cost of P17.52 billion, was awarded to GMR-Megawide last April despite a protest made by second highest bidder Filinvest-Changi consortium and the filing before the Supreme Court by Sen. Sergio R. Osmeña III of a petition to nullify the contract.

“We have operations already in Cebu and most of the airports are based in the Visayas. So it makes sense that we should participate [in the bidding],” Mr. Ferrer said in an interview on the sidelines of the launch of the new Mactan Cebu International Airport brand last week.

He said GMR would still be the technical partner for any airport-related ventures.

“We have a strong partnership and we believe in how they operate an airport,” he added.

GMR-Megawide, which is 60% owned by Megawide and 40% owned by GMR, is set to take over and start rehabilitating the Mactan Cebu airport terminal on Nov. 1. Construction of a second terminal will start in January.

Mr. Ferrer said a consortium of financial institutions led by BDO Unibank has committed to finance the P17.52-billion project. Financial close is targeted between the end of October and mid-November.

Expansion of the terminal will raise the airport’s annual passenger carrying capacity to 12.5 million. The existing terminal was designed for 4.5 million passengers, but currently serves 7.1 million.

Mr. Ferrer, who is also chief marketing officer of Megawide, said the construction company is also interested in other PPP projects that the government has lined up.

“We’d like to grow our airports. We’d also like to grow our hospital business. The other interesting projects would be water, prison facilities and the ITS (Integrated Transport System) — everything that has construction which is our core strength,” Mr. Ferrer said.

Megawide earlier bagged the PPP contracts for the modernization of the Philippine Orthopedic Center and the School Infrastructure Project. — Marites S. Villamor

Airport PPP Projects To Be Auctioned Off


MANILA, Philippines–The government is looking at auctioning off several provincial airport public private partnership (PPP) deals later this year while authorizing the hiring of consultants to study the possibility of bidding out the country’s busiest airport, Ninoy Aquino International Airport in Manila.

PPP Center executive director Cosette Canilao told reporters that the provincial airport  deals are for Laguindingan, Panglao (Bohol), Puerto Princesa, Iloilo, Davao and Bacolod.

Puerto Princesa Airport
Puerto Princesa Airport

These would be a combination of operations and maintenance contracts with expansion components, depending on the need.

“We are looking at one bidding process but several packages,” Canilao said while adding they have yet to finalize how the airport projects would be bundled.

This was moving ahead of a the potential plan to auction out the operations of Naia, an aging gateway that handled about 32 million passengers last year. Naia has been facing congestion issues given its inability to keep up with rising demand for air travel.

The Department of Transportation and Communications is already reviewing a proposal to build a 2.3-kilometer parallel runway to complement the existing 3.4-km primary runway. This will allow Naia to accommodate more takeoff and landing events and ease air traffic congestion, which costs airlines an estimated P7 billion annually on top of delays for passengers. Any privatization of Naia’s operations is expected to draw significant private sector interest, which is why the government is exploring this option.

“The Naia O&M (operation and maintenance) and development plan is a different transaction,” Canilao said.

“DOTC has already asked PDMF support to hire consultants for that,” Canilao said, referring to the Project Development and Monitoring Facility.

PDMF is a revolving pool of funds from the Philippine and Australian governments to enhance investments in PPPs.

Canilao said the government is looking at auctioning off PPP deals recently approved by the National Economic and Development Authority, chaired by President Aquino. Among the more than $1 billion infrastructure deals that would be ready for bidding in the second half of 2014 include the Bulacan Bulk Water Supply Project (P24.4 billion), New Centennial Water Supply Source Project (P18.7 billion) and the Light Rail Transit Line 2 operations and maintenance contract.

Source: Miguel R. Camus, PDI

OPINION: Pangdaigdigang Paliparan ng Pilipinas


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After suffering and putting up with one of the world’s worst airports for years, many Netizens were beside themselves with excitement over the two-point proposal of PAL president and San Miguel CEO Ramon Ang to build a second runway at NAIA and a new world-class airport at the Cyber Bay area of Manila Bay.

The reaction is understandable considering the virtual disintegration of NAIA in comparison to airports of neighboring countries as well as the actual environment and services at the airport.

But while Netizens were busy wishing the new airport and the second runway into reality, several people missed the fact that by allowing Ramon Ang and San Miguel Corp. to make a presentation to the President and the Cabinet, Malacañang, particularly the President, may well be saying or showing that they are open for business and that the President welcomes professional advice and serious proposals outside of his Cabinet and best buddies.

It can also be considered as Presidential action to reduce red tape and legal paranoia that have so plagued his administration from day one. As the older members of media have continuously pointed out, the P-Noy administration has an overload of lawyers and not enough doers.

Considering the widespread and positive feedback that the presentation garnered from social and traditional media, the President should ride the wave and invite more mavericks, doers and even “critics” to the palace or some neutral forum where he can pick people’s brains, harvest fresh ideas, or anoint doers to get on with their program.

While P-Noy may carry the burden of leadership he should also consider and remember that all of the great leaders, big businessmen, even visionaries in history as well as in the Philippines never did it alone.

Many of them were full pledged ENABLERS who found people like Ramon Ang and simply supported an idea or a concept whose time had come, or was the answer to a common problem.

In an era where “innovation” is the buzzword, we need to remember that it is not usually the original idea that worked, brought fame, or made millions. In many cases, the man or the leader who recognized the potential or took advantage of it often got the credit and the honor.

In the case of the RSA proposals, neither P-Noy nor RSA or even the Filipino people will benefit or get any honor unless we enable each other to do our part, which takes me to the next point. In case no one noticed, the development of the Cebu/Mactan International Airport fell in the lap of an India-based outfit.

Then the government recently announced that the Palawan airport development project went to a South Korean company.

At the rate the DOTC officials have been responding to Ang’s proposal, it would seem like our one big chance of having a world-class airport built by Filipinos might slip by and end up with foreigners once again, simply on the merit of Jurassic rules and “cheapest gets the project.”

Ever since the P-Noy administration took over, people have talked about being proud of the Philippines, about promoting the Philippines. So far the only thing we can really consider a joint effort of all Filipinos, that is a certified success, is our “It’s More Fun in The Philippines” tourism campaign.

The anti-corruption campaign remains an acoustic war full of threats but no prisoners. But now we actually have a worthy challenge both for government and the private sector.

Here we have a chance to change the rules, rewrite our history of divisiveness and crab mentality, and actually attempt what has been commonplace in the private sector.

Anyone who thinks the new airport can’t be done is either blind or been living underground for the last few years. The Mall of Asia was built by a Filipino company. The Arena followed right after.

Just last Wednesday I drove around the spectacular stadium of the Iglesia Ni Cristo in Bulacan, which reminded me of a super stadium in the United States. The INC stadium is HUGE, beautiful and from the outside clearly world-class.

So why can’t Filipinos, why can’t a world class Filipino company that is San Miguel Corp. build the airport we can be proud of? The fact of the matter is “Anything can be what we want it to be, if we want it hard enough.”

The problem is we have allowed the naysayers, our competitive spirits, and jealousy to get out of control, to the point of hurting all of us, not just our enemies or competitors.

Every modern day leadership guru or billionaire teaches us that our passion and our idea will only work and succeed when we share it with others. What we must first learn to share is a vision and our individual ability to think big and build big.

It is understandable that government officials are limited or fenced in by their reality and legalities, but that is also why government needs to combine and cooperate with private sector, not just stand on the sidelines or stay within the box.

My mentors have taught me that it is a lot easier to make or find P10 million than P1 million. People will willingly partner, fund or lend money to a great new idea, than to an old one with small returns.

The truth of the matter, although many of them won’t admit it, is that many of the so-called rival corporations and business leaders share or partition projects from time to time.

The only reason things get rough is when the project is too small or there is very little meat on the bone. Building what could be the Pangdaigdigang Paliparan ng Pilipinas (PPP) will be so huge it could be a construction fiesta for many corporations in the Philippines.

The next thing “would-be doers” need to learn is to see the problem and come up with the solution.

Many people throw their hands up the minute they see the problem because they don’t know the answer. What I’ve learned is someone else usually has the answer or is the solution.

The Philippine government had a problem called NAIA and is tied up in lots of bureaucracy. San Miguel Corp. has boldly stepped up to the plate and pitched.

Do we go for a home run or do we sit and watch some foreign company take over yet again?  “Puso” and “Bayanihan” are not just words — they are Filipino.

Source: CTALK by Cito Beltran, Philippine Star

A New Puerto Princesa Airport in 2017


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A world-class international airport at Puerto Princesa, Palawan, is set to open in early 2017 as the Department of Transportation and Communications (DOTC) on Tuesday said that the airport expansion project was finally awarded to a Korean group.

DOTC said in a statement that the $82.9-million design-and-build contract was awarded to Kumho Industrial Co. Ltd.-GS Engineering and Construction joint venture (Kumho-GS), which is set to start work on a new passenger and cargo building, apron, taxiways and navigation facilities by the end of this year.

“Kumho-GS will have around thirty months to complete the project, which means that the DOTC expects the modern airport to be fully operational by the first quarter of 2017,” DOTC said in the statement. Upon completion, the airport will have an annual capacity of about 2 million passengers.

In 2013, it counted 1.34 million passengers, or way beyond the passenger terminal building’s current estimated capacity of only 350,000 passengers an annum, the statement showed.

The project is largely funded through a Korean Export Import Bank (KEXIM) loan amounting to $71.6 million. The loan is payable in 40 years, inclusive of a 10-and-a-half-year grace period, at an interest rate of 0.1 percent a year. Bidding for the project was limited to South Korean firms, the statement showed.

“The ecotourism showcase that is Puerto Princesa, as well as the rest of Palawan, will soon have a modern, world-class airport, which we can be as proud of as the destination itself. With beaches and other natural wonders attracting throngs of visitors from all over the globe, it will finally have a gateway that is befitting of its stature,” Transportation Secretary Joseph Abaya said in a statement.

“Apart from boosting our tourism sector, this project will also generate jobs, particularly in the infrastructure sector. Overall, the estimate is up to 1,400 total new jobs during construction alone,” Abaya added.

In compliance with its engineering, procurement and construction contract, Kumho-GS will begin with the design component by the third quarter of this year. While the joint venture is preparing the airport’s detailed engineering design, it will also begin mobilizing its equipment and securing various project permits.

As a tied official development   assistance (ODA) loan, the bidding process was governed by the Guidelines for Procurement of Korea’s Economic Development Cooperation Fund (EDCF) and decisions were concurred with by KEXIM.

Earlier this year, the DOTC awarded the contract for another major international airport, the Mactan-Cebu International Airport, under the Aquino administration’s Public-Private Partnership (PPP) program. “It is also expected to boost tourism and economic activity, not only in the Visayas region, but for the country as a whole,” the transportation department said in the statement.

Source: Miguel R. Camus, PDI