Civil aviation regulator readies Palawan airport PPP for OK

johnny-arcilla1THE GOVERNMENT is conceptualizing its third airport public-private partnership (PPP) project, consisting of operation and maintenance (O&M) deals for three airports in Palawan, although it remains to be seen if this can secure the President’s approval before he steps down on June 30 next year.

“It is better to bundle the three airports into one: the Puerto Princesa, San Vicente, and the Busuanga-Coron,” Civil Aviation Authority of the Philippines (CAAP) Director General William K. Hotchkiss III told BusinessWorld in an interview last week at the agency’s headquarters in Pasay City.

“It’s the board of the CAAP that has the final authority to say what are the terms of reference of the PPP, which airports, et cetera. The board has not yet decided, but within the President’s term we should be able to get the board to approve that.”

A proposed PPP project is submitted for approval to the National Economic and Development Authority (NEDA), whose Investment Coordination Committee (ICC) recommends it to the NEDA Board. President Benigno S.C. Aquino III heads the NEDA Board, which is the last regulatory hurdle before any PPP project is put on the auction block.

In a mobile phone reply yesterday, NEDA Deputy Director General for Investment Planning Rolando G. Tungpalan said: “ICC OK [is] needed before NEDA Board. Whether this will be for this current NEDA Board or next will depend on progress of approval process.”

But in a separate text message, PPP Center Executive Director Cosette V. Canilao said: “NEDA Board approval could still be within this administration if the business case and the project evaluation forms are submitted.”

Mr. Hotchkiss said the proximity of the airport projects to each other — as well as their combined scale — should make it attractive to private investors, although the project cost has yet to be determined.

Asked on the status of each airport, Mr. Hotchkiss replied: “Construction of the runway at the San Vicente Airport is already finished and it will soon be opened… for general aviation: small planes at first, then turboprops.”

“Once we have set the instrument landing system and the night flying facilities, probably we can open it to real airline operations.”

Construction is ongoing for the Busuanga-Coron airport, formally known as Francisco B. Reyes Airport.

“Traffic flow is coming in fast and the terminal is a bit small, so it might be expanded. The runway would also need realignment and lengthening,” Mr. Hotkiss said.

“For Puerto Princesa, there is ongoing construction so it might need only O&M.”

The O&M deal for the Puerto Princesa International Airport was initially planned to be included in a separate airport PPP deal and was assigned a project cost of P5.81 billion.

But it was eventually excluded from the first regional airport PPP package in order to support a plan to maximize Palawan’s tourism potential.

“Boracay is starting to get congested and part of the tourism flow is going to Bohol and Cebu. The value of Palawan is that it has white beaches and I think the next tourism flow is going to that province,” Mr. Hotchkiss said.

The Transportation department on June 18 finalized the exclusion of the Puerto Princesa International Airport from the second airport PPP deal worth P108.19 billion. That consists of two bundles: the first composed of the Bacolod-Silay (P20.26 billion) and Iloilo (P30.40 billion) airports and the second made up of the Davao (P40.57 billion), Laguindingan (P14.62 billion), and New Bohol (Panglao) (P2.34 billion) airports. The government hopes to award project contracts by March 2016. Concession period will run for 30 years.

The first airport PPP project — the P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building project in Lapu-Lapu City — was awarded in April last year to the consortium of Megawide Construction Corp. and India’s GMR Infrastructure Ltd. This project broke ground last June 29 and is expected to be completed in three years.

The Mactan-Cebu airport is one of the 10 PPP deals cumulatively worth P189 billion that have been awarded since the program began in 2010. The rest are the P64.9-billion LRT Line 1 Cavite Extension and O&M, P55.51-billion Cavite-Laguna Expressway, P16.43-billion first phase of the PPP for School Infrastructure Project (PSIP), P15.86-billion second phase of the NAIA (Ninoy Aquino International Airport) Expressway Project, P8.69-billion modernization of the Philippine Orthopedic Center, PSIP’s P3.86-billion second phase, P2.5-billion Southwest Terminal of the Integrated Transport System, P2.01-billion Daang Hari-SLEx (South Luzon Expressway) Link Road, and P1.72-billion Automatic Fare Collection System.

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