December 15, 2014

Six airports in Philippines being opened up for public-private partnership

Less than a month after Mayanmar announced a 30-year public-private partnership for the country’s second largest airport at Mandalay, on Dec. 15th it has been announced that the Philippines will be looking to do the same with six of their own airport projects by putting them up for tender next year. This would appear to be continued proof of the continued increase in air traffic in Asia and the demands for improved infrastructures throughout the region. The value of these tenders is anticipated to be in the region of PHP116 billion pesos (US$2.6bn). Again similar to the Myanmar process, prospective investors are being invited by the Department of Trade and Communications (DOTC) to pre-qualify for the right to bid on the projects themselves.
The six airports are at key tourist and commercial destinations in both the centre and southern regions of the Philippines. As the DOTC reports: “The fact that the traffic at these airports has either exceeded their current design capacities or is nearing the design capacity levels, coupled with the anticipated influx of growing number of domestic and international passengers in years to come, make the fast and proactive development of these airports crucial”. The aim of this program is to increase the number of foreign tourists to the Philippines from 6 million to 10 million by 2016.
Those up for tender for concession contracts to operate and expand are Davao Airport, Iloilo Airport Bacolod-Silay Airport and Laguindingan Airport, the four for a total of just under PHP110bn pesos and which, according to the DOTC, last year catered for 7.7 million passengers between them. The existing airports of Bohol and Puerto Princesa which dealt with 2.1 million passengers last year will be handed over to the private sector when construction has been completed. The new Bohol Airport will have cost PHP4.6bn pesos, while the Puerto Princesa Airport construction will have come in at PHP20.3bn pesos and operations and maintenance will fall into the hands of the private sector once building is complete. The DOTC indicated that packages of two or more airports would be offered to increase attraction to investment, while it is believed interest has already been shown by JG Summit Holdings, San Miguel, Megawide Construction and Aboitiz Equity Ventures.



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