July 6, 2011, ABS-CBN News
The bidding for the P10.6-billion Ninoy Aquino International Airport (NAIA) Expressway Phase II under the Public Private Partnership (PPP) is scheduled for January next year.
The NAIA Expressway Phase II is one of the first PPP projects that is up for bidding because the detailed engineering for the project is nearly completed.
In an interview with reporters, Philippine Chamber of Commerce and Industry (PCCI) president Francis L. Chua said that during their meeting with the economic cluster they were informed that the publication for the bidding of the NAIA Expressway Phase II will happen this month. The prequalification process is scheduled for August.
Qualified bidders are scheduled to submit their bid in September while the bidding proper will be on January 2012. Awarding is in March. A year after or April 2013 construction for phase II is expected to begin while it should be finished by 2015.
This project, like all the others identified under the PPP, is entitled to tax perks under the 2011 Investments Priorities Plan. All IPP projects are qualified to register in the Board of Investments (BOI) for incentives.
The project is one of the components of the Metro Manila Urban Expressway System and a major infrastructure component of the Manila International Airport Access Improvement Project.
However, a study showed that government subsidies and higher toll rates are needed in order to attract more bidders for the project.
In the Feasibility Study Report made by Ernst & Young, the financial evaluation of the project showed discouraging reports due to the low Financial Internal Rate of Return (FIRR) of only 5.41% assuming that a basic toll rate of P6.00 is followed.
The study showed that the level of toll fee would make the project financially viable. For instance, the study showed that at a toll fee of P9.50 per kilometer and with a 36% government subsidy, the project will have a 9.8% FIRR which would make it attractive to investors.
“On the other hand, government intervention is required to enhance the viability of the project through provision of additional funds that will cover the civil works and the right of way acquisition,” the study stated.
Doing this will cut the P10.6-billion project cost dramatically because civil works costs make the highest cost at P8.6 billion while right of way acquisition cost is at P1 billion.
