New funding scheme lined up for Davao airport expansion

The government will pursue the expansion of the Davao International Airport by getting funding from official development assistance (ODA) or from its annual budget, the General Appropriations Act (GAA), as it terminated the auction process for the regional airports deal under the public-private partnership (PPP) program.

Pre-qualified groups for the regional airports PPP such as Megawide Construction Corp. and Aboitiz Equity Ventures Inc. (AEV) said they remain willing to support the government’s push for infrastructure development.

In a General Bid Bulletin 04-2017 dated May 22, the DOTr said the government has decided to pursue the expansion and capacity augmentation of the Davao International Airport using ODA or GAA funding.

“Hence, the PPP process for the project is hereby terminated,” it said.

DOTr Secretary Arthur Tugade said in a text message yesterday the decision was arrived at after discussions with the economic cluster and congressional leaders.

“Doing the airports on GAA will make the project cheaper as cost of money is lower thus, more beneficial to the public, project completion is more efficient and faster, and would help avoid legal surprises that may cause regrettable delays,” he said.

With the auction process for the regional airports PPP cancelled, the DOTr said payments made by both prequalified bidders and new bidders for the invitation documents for the airports projects would be refunded at the soonest possible time, provided the original copy of the receipt is presented.

The regional airports PPP project involves the development, operations and maintenance of the five regional airports such as Davao, Laguindingan, New Bohol (Panglao), Bacolod and Iloilo.

During the previous administration, the projects were offered in bundles with the first one composed of the Iloilo Airport and Bacolod- Silay Airport, and the second bundle covering the Davao Airport, New Bohol (Panglao) Airport and the Laguindingan Airport.

Groups pre-qualified by the previous administration to bid for the regional airports PPP are the Philippine Airports Consortium, Maya Consortium, GMR-Megawide Consortium, San Miguel Holdings Corp.-Incheon International Airport Corp. Consortium, and Filinvest-JATCO-Sojitz Consortium.

The Duterte administration decided to unbundle the five airports, however, to expedite selection and award.

Earlier this month, Tugade said the Davao International Airport may be removed from the regional airports deal as it might be better for government to undertake its development.

Sought for comment, Megawide which operates the Mactan Cebu International Airport with its partner GMR Infrastructure Ltd. of India said it supports the government’s plan to undertake the development of the regional airports at the quickest time possible.

“It is crucial for the airport development project to be implemented immediately because efficiencies in the airport system are greatly hampered by the lack of proper infrastructure,” it said.

Megawide said it is also capable of participating in any modality, whether as an engineering, procurement and construction contractor through Megawide Construction, and/or operations and maintenance partner through the Cebu Airport consortium.

For his part, Randall Antonio, chief operating officer of AEV’s Aboitiz InfraCapital said the group recognizes the government’s decision to terminate the PPP process for the regional airports in favor of other modes of procurement.

AEV is part of the Maya Consortium.

“We remain committed to supporting the government’s push to build the infrastructure necessary to promote inclusive economic growth for our people,” Antonio said.