Four more PHL airports to be privatized next year

By Ashley Erika O. Jose, Reporter

AT LEAST four more Philippine airports in the countryside are expected to be privatized in 2025, the Department of Transportation (DoTr) said last week.

“For next year, we have Iloilo, Puerto Princesa and Kalibo [airports],” Transportation Undersecretary Roberto C.O. Lim told reporters on the sidelines of an aviation forum. “We have ongoing negotiations with the proponents.”

The agency also expects to launch the competitive tender for the Davao International Airport under a public-private partnership (PPP) program.

Villar-led Prime Asset Ventures, Inc. holds the original proponent status for both P14.7-billion Iloilo International Airport and P10.24-billion Puerto Princesa International Airport, according to the Public-Private Partnership (PPP) Center website.

Meanwhile, Mega7 Construction Corp. has submitted an unsolicited proposal to operate, upgrade and maintain the P3.62-billion Kalibo International Airport.

Mr. Lim said the government expects to award the contract for the operations and maintenance of New Bohol-Panglao International Airport this year. The contract is undergoing a Swiss challenge, which allows other companies to submit alternative proposals that the original proponent can match.

In September, the infrastructure arm of the Aboitiz Group got the contract for the operations and maintenance of the P12.75-billion Laguindingan International Airport in Northern Mindanao.

Aboitiz InfraCapital, Inc. is expected to sign the contract this month, the Transportation department said, adding that the new private operator would take over operations by next year.

The same company also holds the original proponent status for the operations and maintenance of the P4.5-billion Bohol airport.

Aside from the two regional airports, the government has also turned over the operations and maintenance of the country’s main gateway, the Ninoy Aquino International Airport, (NAIA) to San Miguel Corp.-led New NAIA Infrastructure Corp.

The New NAIA venture is composed of San Miguel, RMM Asian Logistics, Inc., RLW Aviation Development, Inc. and Incheon International Airport Corp., the operator of South Korea’s international airport.

The group took over the operations and maintenance of NAIA on Sept. 14 after offering to allocate 82.1% of NAIA revenues to the government.

Transportation Secretary Jaime J. Bautista earlier said one group had expressed interest in Davao International Airport, although the company had not submitted a former proposal.

Mr. Lim said the Transportation department is working with the World Bank, International Finance Corp. and the Asian Development Bank for more PPP projects in 2025, including the Davao, Busuanga, Bacolod, Bicol and General Santos airports.

Rene S. Santiago, former president of the Transportation Science Society of the Philippines, on Tuesday said the state’s decision to privatize these airports ensures better operations and maintenance.

“Privatization transfers large chunks of required investments to the private sector, and assures better maintenance and operations upon completion,” he said in a Viber message. “It is a tacit admission of weak public sector capabilities.”

“In general, I agree with this direction,” Nigel Paul C. Villarete, senior adviser on PPP at Libra Konsult, Inc., said via Viber. “Clearly, this current policy direction of the government is… not propelled by ‘financial’ advantages but rather by the efficiencies that PPPs inject to airport operations and passenger experiences.”

He added that the government should pursue PPP projects through a solicited mode rather than just accepting unsolicited proposals noting that the PPPs would let the government spell out requirements.

“Clearly, this current policy direction of the government is propelled to a big extent by the success of the first one done by the Mactan-Cebu International Airport Authority,” Mr. Villarete said.

The Aboitiz group also manages and operates Mactan-Cebu International Airport after finalizing a deal with Megawide Construction Corp. and GMR Airports International B.V., allowing it to acquire shares in GMR-Megawide Cebu Airport Corp., the company behind the airport.

Mr. Villarete said a private operator managing airports does not guarantee higher passenger volumes.

“If it’s a gateway to tourism destinations, definitely, privately operated airports would certainly help,” he said. They could also make hard to reach but attractive spots in the country more accessible, he added.