At least 7 groups vie for 25-year deal to operate, maintain Clark airport

Chrisee Dela Paz
At least 7 groups vie for 25-year deal to operate, maintain Clark airport
With the auction for the operations and maintenance of the Clark International Airport about to start, several prospective bidders question some of the requirements

MANILA, Philippines – Some of the big local conglomerates that had bid for the country’s first airport deal under the public-private partnership (PPP) program could square off once more for the 25-year contract to operate and maintain the Clark International Airport.

As of Monday, May 21, the Bases Conversion and Development Authority (BCDA) said those who have bought bid documents for the operations and maintenance (O&M) of the Clark airport are the following:

  • Megawide Construction Corporation and its Bangalore-based partner GMR Infrastructure Limited
  • Filinvest Development Corporation
  • Metro Pacific Investments Corporation (MPIC)
  • San Miguel Holdings Corporation
  • Prime Asset Ventures Incorporated (PAVI) of the Villar family
  • Central Luzon Infrastructure Consultancy Incorporated Consortium
  • GVK Airport Developers Limited

“We want to make sure we keep the most number of participants because this is the first hybrid PPP deal ever,” Joshua Bingcang, chairman of the BCDA Special Bids and Awards Committee, told reporters on the sidelines of a pre-bid conference in Taguig City on Monday.

Aside from the 7 groups that bought bid documents, Bingcang said about 23 firms, including Sojitz Philippines Corporation and Dennis Uy-led Udenna Corporation, attended the conference.

The Clark International Airport, which is envisioned to be the next major gateway in the Philippines, is the first hybrid infrastructure project under the administration of President Rodrigo Duterte.

A hybrid deal means the government will fund the construction of an infrastructure project, while the O&M would be auctioned off to the private sector.

Questioned terms

For these groups to qualify for the O&M auction, they should not have a “stake in any facility operator within the main island of Luzon,” BCDA documents showed. (READ: Work begins on Clark International Airport expansion)

The BCDA added that prospective bidders should not “hold, whether direct or indirect, a majority equity interest in a concession holder of an international airport in the Philippines.”

Should the BCDA stick with the legal requirement, the group of Megawide and GMR would not be qualified to participate in the auction, as it holds the concession for the expansion, operations, and maintenance of the Mactan-Cebu International Airport in the Visayas.

It’s limited [to] an island group. If you are operating a Visayan airport, [and] the government will bid out another airport like Panglao, then you may not be allowed to participate in the auction for Panglao. We haven’t really looked into it if this specific proponent will be disqualified [from] the bidding,” Bingcang told reporters when asked about the reason why the BCDA put those legal requirements in place.

If the BCDA decides to remove the requirement of not holding a majority equity interest in an international airport concession, the Megawide-GMR group would have the chance to participate in the auction. Megawide-GMR does not hold any concession involving an international airport in Luzon.

A subsidiary of San Miguel, meanwhile, owns the rights to build, rehabilitate, operate, and transfer the Boracay-Caticlan Airport for 25 years. But that airport is not considered an international gateway.

Our interest is to get the best partner and we want competition as well. But if there are proponents who can provide us their position on why the government should reconsider this legal requirement, then we are open to hearing it,” Bingcang added.

Skytrax requirement

Aside from these legal requirements, the BCDA is also eyeing to only allow prospective bidders with a minimum net worth of P5 billion and who can prove that they can raise capital of at least P10 billion more, the agency’s documents showed.

The BCDA added that only those who have at least 3 years of experience in operating and maintaining an international airport – included in the latest Skytrax list of the world’s 20 best airports, among others – can participate in the auction.

During the pre-bid conference, an interested bidder questioned this technical requirement, saying it contradicts the committee’s goal, which is to attract as many bidders as possible.

“How can you attract more players in the auction if you include such strict, subjective qualification?” the prospective bidder said, adding that the Airports Council International (ACI) is a more credible source than Skytrax.

In response, Bingcang said the BCDA is considering Skytrax because the agency wants to gauge the perception of the public.

It (Skytrax) is public satisfaction rating. The other – ACI – is more systematic. We are requiring both. You have to have both right now. The other one should be the public, right?” Bingcang added.

We are open to improving our terms of reference. We just need to go back and tell that in order to attract the biggest number of bidders, these are the concerns.”

The BCDA will hold one-on-one meetings with prospective bidders from May 21 to May 23. 

The agency said the bid submission is scheduled on July 20, which will be followed by post-qualification on August 7. The target awarding of the O&M contract is on August 30.

Aside from operating and maintaining the Clark airport for 25 years, the concessionaire will also have the rights to commercial development in the gateway’s new terminal building.

The Clark International Airport currently serves 332 domestic flights and 158 international flights weekly. – 

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