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Alvarez slams bidding process of 5 PPP regional airport deals

Mara Cepeda
Speaker Pantaleon Alvarez says the operations and maintenance scheme to be implemented for the 5 airports may unnecessarily tie the government's hands

QUESTIONING THE DOTR. Speaker Pantaleon Alvarez continues criticizing the moves of the Department of Transportation.

MANILA, Philippines – Speaker Pantaleon Alvarez questioned the bidding process the Department of Transportation (DOTr) is currently conducting for the operations, maintenance, and upgrade of 5 unbundled regional airports in Bacolod, Davao, Iloilo, Laguindingan, and Bohol.

In an interview with dzMM on Friday, January 27, Alvarez said this scheme is disadvantageous to the government. 

Kaya nga sabi namin, aba, kailangan i-revisit natin itong PPP (private-partnership program) [law] na ito dahil mukhang hindi ito para sa advantage ng gobyerno (That’s why we said we must revisit the PPP law because this looks disadvantageous for the government),” said Alvarez, former Department of Transportation and Communications chief.

Ang investment dito ng mga mag-ooperate nito at magme-maintain ay hindi na ganoon kalaki talaga. Cosmetics na lang ito – sometimes maintenance ng mga comfort room or ire-rearrange lang yung terminal,” he added. 

(The investment of those who will operate and maintain these will not be a lot. It will just be for cosmetics – sometimes for the maintenance of comfort rooms or to rearrange the terminals.) 

The DOTr recently invited prospective bidders to participate in the auction of the following airport PPP projects: the P20.26-billion Bacolod-Silay Airport, the P30.40-billion Iloilo Airport, the P40.57-billion Davao Airport, the P14.62-billion Laguindingan Airport, and the P2.34-billion New Bohol (Panglao) Airport. 

The 5 consortia that were pre-qualified during the first auction are the following: 

  • Philippine Airports Consortium, which includes Metro Pacific Investments Corporation (MPIC), Aeroports de Paris, and ADP Ingenierie
  • consortium of San Miguel Holdings Corporation and Incheon International Airport Corporation
  • GMR Infrastructure Limited-Megawide Construction Corporation group
  • consortium of Aboitiz Equity Ventures Incorporated and VINCI Airports SAS
  • the group of Filinvest Development Corporation, Japan Airport Terminal Company Limited, and Sojitz Corporation

According to Alvarez, the said scheme would grant winning bidders the exclusive rights to operate, maintain, and upgrade the airports for 30 to 35 years, much longer compared to the 25 years currently being granted by Congress.  

He said the winning bidders must request for a legislative franchise from Congress, a requirement under the 1987 Constitution. 

The DOTr had argued, however, that the bidders no longer need to ask Congress for a franchise as this is automatically granted under the Build-Operate-Transfer (BOT) law.  

Kung nakalagay man yun sa BOT Law, malamang that is an unconstitutional provision. Kasi tingnan mo, sa Congress ang pinakamatagal na binibigay namin ngayong prangkisa para sa itong mag-aapply ng franchises sa Congress, 25 years lang,” said the Speaker.

(If that provision is under the BOT law, that that’s likely unconstitutional. Because the longest franchise we’re giving to those applying in Congress is just 25 years.)

Tying the government’s hands?

According to Alvarez, the longer time to be given to winning bidders may also hinder the government from expanding the 5 airports before the end of the contract period. 

‘Pag inilipat mo ‘yung terminal, ’yung nanalo na ‘yun, mayroon na agad siyang pinanghahawakan na, ‘Kailangan kausapin mo ako because I have a 35-year contract. So itatali mo ngayon yung gobyerno unnecessarily doon sa kontrata noong mananalo noong pinapa-bid nila ngayon,” he said.

(If you move the terminal, the winning bidder already has leverage to say, ‘You need to talk to me because I have a 35-year contract. So you’re tying the government’s hands unnecessarily through the contract they’re bidding out now.)

The 5 airport PPP deals, which together are worth P108.9 billion, were rolled out during the time of former President Benigno Aquino III. (READ: PH sticks to bundled plan for 5 airports)

The previous administration, however, failed to bid out the projects, which at the time was bundled into two packages. – with reports from Chrisee dela Paz/Rappler

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Mara Cepeda

Mara Cepeda specializes in stories about politics and local governance. She covers the Office of the Vice President, the Senate, and the Philippine opposition. She is a 2021 fellow of the Asia Journalism Fellowship and the Reham al-Farra Memorial Journalism Fellowship of the UN. Got tips? Email her at mara.cepeda@rappler.com or tweet @maracepeda.