Business World, 16 December 2014
By Chrisee Jalyssa V. Dela Paz
THE GOVERNMENT yesterday formally called for bidders for P116.23 billion worth of contracts to develop, operate and maintain (O&M) six regional airports under its public-private partnership (PPP) program, according to a notice published in three newspapers.

Through an invitation to pre-qualify and bid, the Department of Transportation and Communications and Civil Aviation Authority of the Philippines sought interested parties to submit applications to finance, design, build, operate and maintain the facilities for 30 years.

The six projects are: P4.57-billion New Bohol (Panglao) Airport; P5.81-billion Puerto Princesa Airport; P14.62-billion Laguindingan Airport; P20.26-billion Bacolod-Silay International Airport; P30.40-billion Iloilo Airport; and P40.57-billion Davao International Airport.

The bid notice said the projects “aim to improve services and enhance the airside and landside facilities of the key regional airports by entering into concession agreements with the private sector.”

The document noted that Bacolod-Silay, Iloilo, Laguindingan and Puerto Princesa airports have already exceeded their estimated passenger capacity, while the Davao facility “is expected to breach its estimated design capacity in the next few years.” The planned new Bohol airport, on the other hand, will be designed to handle up to 1.7 million passengers a year.

Under the planned concession for Bacolod-Silay, Davao, Iloilo and Laguindingan airports, the winning private sector bidder will take over O&M and promptly start expanding the passenger terminal building, apron, other airside and landside facilities, as well as “any capacity augmentation… that may be required to cater to future demand throughout the contractual term.”

O&M for the new Bohol and the Puerto Princesa airports will be turned over to the winning bidder upon completion of construction. “The proponent shall also be required to develop/expand capacty to cater to future demand throughout the contractual term,” the notice read.

Transportation Undersecretary for Legal Affairs Jose Perpetuo M. Lotilla said in an interview at the sidelines of a committee hearing at the House of Representatives in Quezon City yesterday that his department was looking at breaking up the airport tender into two contracts covering three projects each.

“[T]he BAC (bids and awards committee of Transportation department) is considering bundling them…,” Mr. Lotilla said, saying each bundle of three projects would be roughly equivalent to an estimated annual throughput of five million passengers.

“One contract will be the development and O&M of Laguindingan, Bohol and Davao, while a second contract will be for Puerto Princesa, Iloilo and Bacolod,” he explained.

“This is to make it more strategic to investors. Some investors asked before why not bundle it according to throughput of passengers.”

Saying the grouping was still “preliminary”, Mr. Lotilla said “this will depend largely on the inputs of interested groups during the process prior to bidding itself.”

The notice said interested parties may acquire invitation documents consisting of the invitation to pre-qualify and bid, project information memorandum (PIM) and instructions to prospective bidders (ITPB) after paying a non-refundable fee of P1 million. The PIM will be available by Dec. 23 while the ITPB will be made available some time in February next year.

“Only bidders who have purchased the invitation documents… shall be allowed to participate in the pre-qualification and bidding process,” the notice read.

PPP Center Executive Director Cosette V. Canilao had bared as early as December last year “initial” plans to bundle the six airport development and O&M deals for auction, citing the need to make sure the small projects would attract enough investors.

Officials of companies that had bid for other PPP deals had earlier expressed interest in these bundled airport deals.

Manuel Louie B. Ferrer, president of GMR-Megawide Cebu Airport Corp. (GMCAC) that Megawide Construction Corp. and Bangalore-based GMR Infrastructure after bagging the P17.5-billion Mactan-Cebu International Airport PPP project last April, said in an interview on the sidelines of the launch of the new airport’s brand in October that “it makes sense” for the partnership to bid for the other airport deals.

Metro Pacific Investments Corp. (MPIC) Chief Financial Officer David J. Nicol said at the sidelines of a press briefing in Tokyo, Japan last month: “We’ll look into the bundled airports.”

“We’ll wait for the release of the terms of the projects and see if they are strategic to us.”

Ayala Corp. Managing Director John Eric T. Francia told reporters at the sidelines of an event in Makati City early this month: “We’ll look at it. To be honest, we need to study first what the package consists of. Once that is launched by the government, we’ll see.”

The Transportation department now also aims to roll out the P18.99-billion Davao Sasa Port Modernization PPP project within the month.

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.