THE GOVERNMENT has terminated the public-private partnership (PPP) mode of procurement for the regional airport projects, with the implementing bodies — the Department of Transportation (DoTr) and Civil Aviation Authority of the Philippines — deciding they “would be implemented through other modes,” the PPP Center said in a press release yesterday.
This is the first PPP project rolled out by the current government that took over at the end of June last year.
The administration of President Rodrigo R. Duterte, which has made its priority to embark on an infrastructure buildup until it ends its term in mid-2022, has said it would lessen reliance on the PPP mode of procurement which it said took too long to implement such projects. Instead, it prefers them to be funded internally, through official development assistance, PPP or a mixture of these modes for specific project segments.
“We received confirmation that the procurement of the much-anticipated Regional Airport PPP Projects (Development, Operations and Maintenance of New Bohol [Panglao], Davao, Iloilo, Laguindingan and Bacolod Airports) has been terminated,” the PPP Center said.
First offered in bundles to private sector investors in December 2014 under the previous administration, bidding did not push through despite prequalification of five groups.
In November last year, the National Economic and Development Authority Board approved the unbundling of the five airport projects, leading the DoTr last Jan. 25 to publish anew a call for prospective investors.
“While the PPP Center believes in the credibility of these airport projects structured as PPP, and gratefully acknowledges the solid interest of the private sector, we respect DoTr’s and CAAP’s authority and their decision to terminate the projects,” the PPP Center said, while citing PPP projects implemented under the previous government like the Mactan Cebu International Airport (MCIA) Passenger Terminal Building, Ninoy Aquino International Airport Expressway, school buildings and automated fare collection system for the trains.
“It is clear that PPPs remain a viable option in the procurement of infrastructure projects, especially those that require an integrated approach (i.e. design-build-operate-maintain) in order to save on procurement timing, reduce interface risks and avail of private sector’s technology and efficiency,” it added.
The DoTr in a May 22 General Bid Bulletin (04-2017) posted on its Web site, announced the termination of the PPP offer for the five regional airport projects, saying each one will be pursued instead “using official development assistance or general appropriations act (GAA) funding.”
“Hence, the PPP process for the project[s] is hereby terminated,” the DoTr said in separate bulletins bearing the subject “Termination of the PPP Process” for the Bacolod-Silay, Davao, Iloilo, Laguindingan and New Bohol (Panglao) airport projects.
“Relative to this, payments for the invitation documents shall be refunded to both previously pre-qualified (for the bundled projects) and new (for the unbundled projects) bidders at the soonest possible time, subject to the presentation of the original copy of the official receipt.”
The regional airports would have been the second airport project to be implemented under the PPP scheme after the development of the new MCIA that was awarded in 2014 to Megawide Construction Corp. and its joint venture partner Bangalore-based GMR Infrastructure Ltd.
Sought for comment yesterday, Transportation Secretary Arthur P. Tugade said via text: “Doing the airports on GAA makes the projects cheaper as cost of money is lower, thus, more beneficial to the public, project completion is more efficient and faster, and helps avoid level surprises that may cause regrettable delays.”
Three of the five firms prequalified to bid for the regional airport projects yesterday said they await the government’s next steps.
“We await developments with interest. The private sector has a great track record of rapid execution, for example look at the LRT1. We are ready and keen to help,” Metro Pacific Investments Corp. Chief Finance Officer David J. Nicol said via text message yesterday, referring to the Light Rail Transit line 1 which the infrastructure conglomerate maintains together with Ayala Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.
Aboitiz InfraCapital, Inc. said in a statement that it remained “committed to supporting the government’s push to build the infrastructure necessary to promote inclusive economic growth for our people.”
Manuel Louie B. Ferrer, Megawide’s chief marketing and corporate information officer, said in a separate text that the firm “supports the government’s pledge to undertake this development in the quickest time possible.”
24 May 2017
By Imee Charlee C. Delavin
