DOTr reconsiders Aquino administration’s ‘fire sale’ of five provincial airports

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The government is discovering more kinks in the plan of the previous administration to bid out the provincial airports in bundles, reinforcing the pronouncement of the new officials of the Department of Transportation (DOTr) that development of these gateways should be done separately.

DOTr Spokesman Cherie Mercado-Santos said: “ The plan with the regional airports is to desegmentize them than put them into one cluster.”

Five provincial airports have been identified for bidding, with the total cost estimated at P108.2 billion. The Aquino administration thought of offering them to the private sector in two packages to make the projects more enticing to investors.

The first package consists of the Bacolod-Silay Airport, P20.26 billion; and the Iloilo Airport, P30.40 billion; while the second bundle is composed of the New Bohol or Panglao Airport, P2.34 billion; Laguindingan Airport, P14.62 billion; and the Davao Airport, P40.57 billion.

The privatization contract stipulates that the private partner will undertake the operation and maintenance of the airport; provide additional facilities and other necessary improvements to enhance passenger safety, security, access, passenger-  and cargo-movement efficiency; and operational efficiency under a defined concession period.

But Robert Lim, undersecretary for Transportation-Aviation and Airports, said the department has studied the plan, and found out that the New Bohol or Panglao Airport should not be included in the privatization scheme, “because that time it’s not yet ripe for its full development.”

“Ang sabi namin baka hindi pa hinog ang Bohol para isama sa privatization,” Lim told the BusinessMirror during an interview on the sidelines of the inaugural arrival of Ethiopian Airlines Boeing 787 from  Addis Ababa,” adding, parang pinahihinog ang Bacolod [it seems that Bacolod is being ‘ripened’ [before being given the priority].”

Lim said the Bohol airport is still under construction and, instead of having it included in the clusters, the DOTr plan is to bid out each airport singly. If it is only Bohol that would be removed from the cluster, however, the plan would become unraveled, he said.

The remaining airports would be opened up for bidding under the Private-Public Partnership (PPP)Program at the start of next year, so that by December 2017, all would have been unbundled and awarded to the winning bidders, Lim said.

Also, while in the process of parsing the previous plan, Lim said DOTr officials discovered that the Davao Airport had gained prominence, apparently because President Duterte became president and Davao’s potentials had suddenly grown.

“The potential had increased, and we thought that if Davao is developed alone, many investors would vie for it, the market would change,” Lim revealed.

“That’s how we look at it, but, of course, we have to consult the Department of Finance [DOF], because it is the agency that will give the go-signal to privatize it,” Lim said, adding that DOF experts would have to evaluate it and then make suggestions on how to go about privatizing it.

“It would be better if the decision would come from the Cabinet, because there would be inputs from many quarters.”

When asked who made the suggestion to include the Bacolod-Silay Airport in the package despite the dearth of tourists in the area, Lim feigned ignorance, but said the DOTr found out that the Silay Airport used to be a Japanese-run airport and, therefore, they have studied its location, and why the airfield has become a favorable site.

The previous  five prequalified bidders for the project are:

  • Filinvest-Jatco-Sojitz Consortium (Filinvest Development Corp., Filinvest Land Inc., Filinvest Alabang Inc., Japan Airport Terminal Co. Ltd. and Cyberzone Properties Inc.);
  • GMR Infrastructure and Megawide Consortium (Megawide Construction Corp., GMR Airport Developers Ltd., GMR Hyderabad International Airport Ltd., and Delhi International Airport Ltd.);
  • Maya Consortium (Aboitiz Equity Ventures Inc., Vinci Airports SAS, ANA-Aeroportos de Portugal SA, Vinci Construction Grands Projets SAS, Therma South Inc. and Hedcor Sibulan Inc.);
  • Philippine Airports Consortium (Metro Pacific Investments Corp., Aeroports de Paris and ADP Ingenierie); and
  • SMHC-IIAC Airport Consortium (San Miguel Holdings Corp., Incheon International Airport Corp., Star Infrastructure Development Corp. and Citra Metro Manila Tollways Corp.)

Mercado-Santos said these bidders may find it quite easy to rehash their proposals, which are currently being modified.

Lim did not make clear whether there would be another prequalification bidding under the new DOTr management.

But he hinted that any company would be welcome “kung tataya sila [If they are going to bet],” noting the offer of Ramon S. Ang, president and COO of San Miguel Corp. (SMC), who made a renewed offer to build a new alternative airport to the congested Ninoy Aquino International Airport.

Following the election of Mr. Duterte in May, SMC said it will revive its massive Manila Bay international airport proposal to solve congestion at the premier airport.

In the last two years, the former Department of  Transportation and Communications tapped the Japan International Cooperation Agency (Jica) to find a suitable location for a new international gateway.  ThenTransportation Secretary Joseph Emilio A. Abaya said a Jica-backed feasibility study for Sangley Point in Cavite was still being finalized.

These new locations are being explored, because the existing alternative, the Clark International Airport in Pampanga, was deemed “too far” for most Metro Manila residents, since it lacked efficient mass-transportation access.

“There’s really no other choice,” Ang said. He said Sangley could cost up to $20 billion to build, while SMC’s Manila Bay airport would require an equity of about $2 billion to $3 billion.

Lim said the government is considering Ang’s offer, saying if a businessman believes that he would profit from his project, he should continue pursuing it, since the government offers no hindrance. “Provided that they will not ask subsidy from the government or they won’t change the operations of commercial airlines to favor their airport.”

At the time the offer was made, Ang was still president of legacy carrier Philippine Airlines.

“The government offers no guarantee, it could be an unsolicited proposal, one of the forms of PPP,” Lim added.

He said the government would welcome a prospective businessman’s feasibility studies, and they could submit them formally to the department. Once it is complied with, the DOTr would ask the prospective bidders the fine details of the project.

He added that an in-depth study by a private entity is needed by the DOTr to find out if a proposal had complied with the requirements of the International Civil Aviation Organization  and the International Air Transport Association, including the impact and convenience of the riding public and the citizens.

Lim said part of the Sangley airport would be for general aviation. He added that a study made by Jica is being reviewed as part of  the government’s overall plan where to locate the new airport.

“The study is not yet complete, but there are four sites in Sangley where the experts have to look at, such as the soil condition, the favorable location of the runway and other parameters,” Lim said.

He added other international airport locations being considered are the Laguna lakeshore near Calamba (not Talim Island), another along Cavite and one in Bulacan.

Lim said the experts had to look at the features of these sites before a final nod is given which among them would be the future international airport after the Ninoy Aquino International Airport (Naia).

The present Naia runway, according to experts from the Civil Aviation Authority of the Philippines (Caap), took more than 10 years’ study to finally decide its runway configuration so that aircraft would always be landing and taking off against the wind.

This is why there are two runways at the Naia, which intersect one another and constructed shortly after World War II. When runway 06-24 is unavailable owing to strong cross wind, runway 13-31 becomes the favorable runway and vice versa, the Caap experts said.

If a new runway were chosen today, however, the experts said they could simply review the data gathered by the weather bureau over the last few decades to determine the prevailing wind condition and configure the runway accordingly.

Meanwhile, the DOTr, according to Lim, is studying the privatization of the Naia and the studies started last year, and would continue to be studied and reviewed when they should be adopted.

“By next year, we have a strong belief that there would be a decision; although this year, definitely there’s already a decision, but the awarding would be next year,” Lim revealed.

When told that the Busuanga Airport’s runway should be realigned so it could accommodate international flights, he said the DOTr is aware of the Caap suggestion.

“Yes, the runway should be realigned, because we have a new strategy that would help decongest the Naia, and that would be to fly tourists direct to their destinations.” He said the Busuanga is undergoing technical study for realignment.

“We will skip Manila, because an Airbus 330 could land on either Puerto Princesa or Busuanga Airport, or Kalibo,” he added.

According to the Caap, the Busuanga Airport would overtake Boracay once it is opened for international flights, noting that there are many five-star resorts on the surrounding islands that had sprouted like mushrooms following in the wake of the internationally known Amanpulo island-resort. Located on Pamalican Island in northern Palawan, Amanpulo is owned by 7 Seas Resort Inc., a joint venture between the Aboitiz, Soriano and the Aman Resorts group.

Reinforcing  these positive developments, Lim said, is the nearing completion of the CNS-ATM, a next-generation communication and air traffic-control system that is located within the Caap compound.

Costing about P13 billion, the system will help greatly ease the workloads of air-traffic controllers, and would lead to further decongestion of the country’s airspace because of closer separations between aircraft.

 

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