Cebu airport project terms changed

MANILA, Philippines – The transportation department will propose changes in the terms of the P17.5-billion Mactan-Cebu International Airport expansion project following one-on-one meetings with the pre-qualified bidders.

In a bid bulletin on Thursday evening, September 19, the Department of Transportation and Communications (DOTC) announced the new bid date and the changes to the final concession agreement for the airport project.

These are the proposed changes in the concession agreement meant to make the project more attractive to investors:

• Lengthening of the concession period from 20 years to 25 years
• Transfer of the Operation and Maintenance from the grantors to the concessionaire
• Allowing flexibility on the implementation of augmentation of capacity
• Sharing of liability for Real Property Tax
• Increasing the duration of the period for prohibiting competing airports from 10 years or when the passenger traffic at the airport reaches 15 million per year to 20 years or when passenger traffic reaches 20 million for 3 years depending which is later

These meant the bidding will be moved to a new schedule — November 15. 

DOTC has earlier deferred the bidding to revise the concession agreement after a series of consultations with pre-qualified bidders who asked for more time to finalize their proposals.

The bidders had raised some issues regarding the commercial, design and technical aspects of the project.

The consultation process was meant to avoid a possible failure of bidding, which was the case in another big-ticket PPP project. 

READ: LRT-1 Cavite Extension bidding ‘a failure’

The DOTC said the concession agreement is final, pending the approval of the highest social and economic development planning and policy coordinating body .

“The latest draft of the concession agreement shall be considered the final draft subject to the confirmation by the National Economic Development Authority (NEDA) Board,” the bulletin read.

The airport project is the 2^nd of the 4 infrastructure projects under the PPP scheme that suffered a delay this 2013.

Pre-qualified bidders

Seven groups of Filipino and foreign firms were prequalified to join the bidding. These groups include:

• Metro Pacific Investments Corp. and JG Summit Holdings Inc. (joint venture), with Aeroports de Lyon
• AAA Airport Partners (joint venture of Ayala Land and Aboitiz Equity Ventures), with ADC & HAS Airports Inc.
• Filinvest and Changi Airports Mena Pte. Ltd.
• San Miguel Corp. and Lucio Tan group (joint venture), and Incheon Airport International Corp.
• First Philippine Airports (consortium of Lopez-led First Philippine Holdings Corp. and Infratil Asia Ltd.
• Henry Sy’s Premier Airport Group and Zurich Airport International AG
• Megawide Construction Corp. and GMR Infrastructure Ltd. (joint venture)

The project

The Cebu airport project involves the upkeep of old and new facilities and the construction of a new passenger terminal with capacity of 8 million passengers per year.

The airport’s existing terminal has a capacity of 4.5 million passengers per year. READ AND WATCH: Cebu airport expansion comes late

The airport sits on a 797-hectare property, and has a single 3,300-meter runway and a full-length taxiway.

It is the country’s second busiest gateway, next to the Ninoy Aquino International Airport in Manila. – Rappler.com