The transportation department has adopted a policy of publicly soliciting bids for the regional airports in the Philippines, with the P148-billion unsolicited proposal of an infrastructure-development company becoming the first offer to be rejected because of the new direction.
Department of Transportation (DOTr) Director for Communications Goddess Hope O. Libiran said the agency has officially informed Aboitiz InfraCapital Inc. of its decision to include the regional airports program on the government’s list of priority infrastructure projects.
“We’ve already sent Aboitiz a letter telling them that we cannot accept their unsolicited proposal,” she said in a text message.
Aboitiz submitted an unsolicited proposal for the upgrade, expansion, operation and maintenance of Iloilo International Airport, Bacolod-Silay Airport, Laguindingan Airport and New Bohol International Airport (Panglao) last month.
“We have adopted a policy to publicly solicit bids for the operations, maintenance, improvement and expansion of all airports under our jurisdiction,” Libiran said.
The four regional airports listed above were among the five gateways lined up for modernization. The project was launched by the government through the Public-Private Partnership (PPP) Program.
They were initially offered in 2014, under two different bundles, as the government believed then that grouping the airport-development deals would be more commercially palatable to the taste of investors. The plan, however, was scrapped last year, pending a more thorough review of the government’s aviation plans.
Libiran noted the government has yet to come up with a concrete plan for the said regional airports.
“We’re still reviewing which option is best to be adopted,” she replied, when asked if the government will bid out the airports in bundled deals.
For now, Libiran said, what is clear is that the government wants to bid out the airport-development deals through the solicited mode.
She explained that such a decision stemmed from the department’s desire to get more competitive offers from other parties. “This is to promote an environment with a level playing field.”
Soliciting public bids allows the government to receive proposals from different parties, based on the parameters it has set. It is also much faster to auction off projects versus unsolicited bids.
The process for unsolicited proposals, on the other hand, could be lengthy due to several evaluations by different government agencies.
First, the implementing agency will have to review the unsolicited proposal. It has the authority to either approve or reject it. Should it award the original proponent status to the group that submitted the unsolicited proposal, the next step is for the National Economic and Development Authority (Neda) to evaluate it.
Once its different subagencies approve the proposal, the Neda Board—the highest government planning body chaired by the President—will then have the final say on the project’s fate.
Should it be approved by the Neda Board, the implementing agency will then place the unsolicited proposal under a so-called Swiss challenge. Essentially, a Swiss challenge is a means for the government to get a better offer versus the original proposal. Under the said competitive exercise, other groups may place offers that will “challenge” the original proponent’s offer. The original proponent will then have the chance to offer a counterproposal.
“While Aboitiz InfraCapital believes its proposal is a very efficient solution to address the immediate need of the airports in the most expedient and comprehensive way, we understand the DOTr’s decision to take a different course,” read a disclosure from Aboitiz Equity Venture Inc. on Tuesday.
According to the group, its infrastructure arm remains committed to supporting the government in its efforts to advance infrastructure in the country, particularly the aviation sector.
“We look forward to receiving the final details of the upcoming tender and will continue supporting the development of the regional airports,” the disclosure read.
Image credits: Nonie Reyes