Philippines changes regional airports and railway PPPs

15 November 2016 - 12:00 am UTC

The Philippine government has approved unbundling the regional airports project which could send the PPP process back to the qualification stage.

The National Economic and Development Authority (NEDA) Board, chaired by President Rodrigo Duterte, approved the change on 14 November.

The Board also approved splitting the PHP 145.2bn (USD 3.2bn) South Line rail PPP into two contracts and the roll-out of the New Nayong Pilipino PPP at Entertainment City.

Regional airports
A source involved in the airports PPP said that the bidding process for the regional airports so far will effectively be cancelled if the bundling is changed. 

The airports were structured as single projects with some bundling-related provisions, a project source said. The Department of Transportation (DoTr) will now consult its legal team on how to proceed.

DoTr wants to continue as many of the five airports as possible as PPP projects but investors might not be interested in all five if they are tendered separately, the project source added.

The agency will seek market feedback at the end of the month on which airports are viable as PPPs.

The five regional airports were originally combined into two bundles in response to investor feedback so that each bundle would have approximately 5m passengers per year.

The tender will move ahead next year and could be opened to new bidders as the project scale and requirements change.

Five consortia  were shortlisted in September 2015 for the PPP to modernize, operate and maintain five regional airports. The consortia are led by Metro Pacific Investments Corp, San Miguel, Aboitiz Equity Ventures, Filinvest Land and Megawide Construction.

The Aquino administration was unable to set a final bid deadline and award the project before President Aquino’s term ended in June this year. 

South Line railway
The NEDA Board also approved a long-discussed proposal to split the South Line section of the North-South Railway Project into separate contracts. One for the commuter line from Manila to Los Baños and another for the long-haul passenger line from Manila to Sorsogon.

The commuter line is an existing rail which needs to be modernised because it is overcrowded. The line’s established passenger flows mean there is a strong case for it to be undertaken as a PPP, a project source said.

Separately, a PHP 1.47bn PPP project was approved yesterday for the New Nayong Pilipino cultural theme park to be built, operated and maintained by a concessionaire over 23 years, including a three-year construction period.

The Department of Tourism (DOT) and Nayong Pilipino Foundation have planned the park as a destination for foreign and local tourists who want to experience Filipino culture, identities and traditions.