Philippines calls for bids for Clark International Airport’s O&M PPP

The GMR-Megawide tie-up, currently running the Mactan Cebu International Airport under the country’s first airport PPP, is also interested in bidding for the operation and maintenance of the Clark International Airport.

The Philippines government is inviting bids for the operation and maintenance of the Clark International Airport, positioned to become the next major aviation hub in the country, for a concession period of 25 years.

The invitation to bid was officially launched by the implementing agency Bases Conversion and Development Authority (BCDA) last Monday, with the bidding documents being made available for purchase today. The BCDA said in an information memo that it intends to partner with a world class international airport operator for this concession.

The winning bidder is expected to take over operation and maintenance of the airport’s existing facilities starting from December this year, as well as the new terminal building that will be completed by 2020. The new terminal is currently being developed by a consortium, comprising local construction company Megawide and the Indian conglomerate GMR, under a separate “engineering, procurement and construction” contract signed this January.

The Megawide-GMR tie-up that also bagged the first airport PPP in the Philippines in 2014 – the Mactan Cebu International Airport – is also interested in the bidding for the O&M contract, a spokeswoman from Megawide told Infrastructure Investor.

BCDA said in the information memo that it expects to recover its investment for the EPC works, equivalent to 10 billion pesos ($192.6 million; €161.5 million) payable in 10 tranches, as well as receive a percentage share of gross revenues in quarterly payments. The latter “will be the bid parameter for the tender for the O&M concession,” it noted. The PPP Center of the Philippines added that the indicative cost of the O&M concession stands at 5.61 billion pesos.

The deadline for the submission of bids is 20 July, while the concession contract will be awarded and signed on 30 August, according to the agency.

The Clark International Airport Corporation, the current airport operator and a BCDA subsidiary, “has been making gross profit margins of roughly 15 percent for the last two years,” said the agency, adding that costs are being driven mainly by utilities and personnel.

The government has set its eyes on developing Clark International Airport, located about 100 kilometers northwest of Manila, as a major gateway airport that can ease the congested traffic at the Ninoy Aquino International Airport. The airport development is being delivered through a hybrid PPP model, which separates the EPC and O&M components for the project.

The Clark Airport currently has a declared capacity of four million passengers per year. The new terminal, once completed, will be able to accommodate eight million additional passengers per year.