BCDA to bid out Clark terminal O&M
The Bases Conversion Development Authority (BCDA) is set to publish the bidding invitation for the bidding of the O&M contract for the Clark International Airport once the National Economic and Development Authority (NEDA) Board gives the go signal.
Joshua M. Bingcang, BCDA Senior VP for Business Development & Operations Group, said they have rejected some unsolicited offers because given the interest by the private sector, the government would be able to generate more value if they conduct a competitive public bidding.
“We are undertaking a public bid- ding, it is solicited already,” Bingcang said the Clark airport terminal and its O&M project is the first hybrid PPP project of the government. The O&M has been approved already by the Investment Coordinating Council, but they still need the NEDA Board concurrence as it is a requirement under the BOT Law.
Bingcang explained that the advantage with the solicited bidding is that the government can expect to generate maximum value because it is competition among bidders. Unlike in the unsolicited process, if no one puts up a challenge then government will live by the proposal by the original project proponent.
The BCDA has already set the bid parameters, which normally include base price (highest payment) or highest revenue share, to be decided by the NEDA Board. They will also set the concession terms and scope of work.
The O&M is long-term concession, normally 25 years, which may also include the operation and maintenance of the existing terminal. The concession term is renewable but at the option of the government, not a right of the concession holder.
This means that whoever wins the O&M concession may already start their job starting with the existing terminal because the construction for the expansion of the terminal is still to be completed by 2020 yet.
BCDA would like to publish the project this month to enable the O&M concession to be onboard by the time the terminal contractor finalizes the design so they can be part of the review process since they will be the one to manage and operate the facility. Doing so, he said, will also avoid interphase risks and smoother turnover of the project from the EPC contractor to the O&M concession.
In December last year, the BDCA awarded the EPC (engineering, procurement and construction) contract to MegawideGMR Consortium for its lowest bid of 19.36 billion. MegawideGMR also won the Mactan Cebu International Airport project, in December last year for its lowest bid of 19.36 billion.
The EPC contractor is not prohibited in bidding for the Clark O&M concession. In fact, Bingcang saw a synergy for the EPC contractor and the O&M concessionaire.