Bidders line up for $425m Philippines airport

The Mactan-Cebu International Airport project has received pre-qualifying bids from seven foreign-domestic consortia.

The Philippines’ Department of Transportation and Communication (DOTC) has received seven pre-qualification proposals for its PHP17.5 billion (€325 million; $425 million) Mactan-Cebu International Airport project 

Prospective bidders include: 

– Metro Pacific Investments Corporation and JG Summit Holdings, with Aeroports de Lyon; 

– AAA Airport Partners, a joint venture of Ayala Land and Aboitiz Equity Ventures, with ADC & HAS Airports;

– Filinvest and Changi Airports Mena;

– San Miguel Corporation and Lucio Tan group, together with Incheon Airport International;.

– First Philippine Airports, a consortium of Lopez-led First Philippine Holdings and Infratil Asia;

– Henry Sy’s Premier Airport Group and Zurich Airport International;

– Megawide Construction Corporation and GMR Infrastructure. 

In line with its plan to “fast-track” all its public-private partnership (PPP) projects before the current Presidential term finishes in 2016, the DOTC plans to choose bidders on May 17 and announce a winner by the fourth quarter of the year.

Mactan-Cebu is the third-largest PPP project of the ten announced in the Philippines in the past half-year, and the last of the DOTC’s three PPP projects to start the pre-qualifying stage, according to the Philippine government’s Public-Private Partnership Centre.

The seven consortia that submitted proposals for this deal all have at least one foreign and one domestic partner, according to Rois Concordia, director of the PPP Centre’s Project Development Service. That was, in fact, one of the DOTC’s requirements.

“This will benefit our domestic air transport industry, as technology transfer will give local players the opportunity to learn from more advanced and more experienced airport operators,” the DOTC noted in a statement. The government branch also claimed that it put in special effort to make this project attractive to international bidders, especially by promoting transparency.

Although the current passenger terminal of the Mactan-Cebu International Airport on Mactan Island has an annual capacity of 4.5 million passengers, the traffic for 2011 was 6.2 million, and is expected to grow. The winner of the Mactan-Cebu PPP will be expected to build a new passenger terminal with a capacity of 8 million, as well as upgrade the existing terminal, according to the PPP Centre website.

The winner will also be expected to operate the terminals once construction is completed, and will be remunerated via tariffs and commercial fees from the terminals, according to a DOTC spokeswoman. The government will also offer Viability Gap Funding to the private sector partner, but that may or may not be availed of by the winner, she said.

“Generally, the purpose behind the PPP structure is wanting to harness the efficiency of the private sector,” Concordia said. Once the Philippines is able to tap the world’s best airport operators, the country will get a more “strategic mindset” that can assess the demand and develop the airport in the best way to meet it, she believes.