NEDA calms down apprehensions over Panglao airport delay

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NEDA calms down apprehensions over Panglao airport delay

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Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) Director-General Ernesto Pernia allayed fears that a hiatus between completion of the construction of the PhP7.8 billion New Bohol (Panglao) airport and the approval of the mode of its operation and maintenance (O&M) contract will jeopardize the start of its scheduled full operation late next year.

According to Pernia, in an exclusive interview with the Chronicle before he flew to the US on June 29, 2017, “the New Bohol Airport is scheduled for completion next year and the factors for the maintenance and operation is best suited under the PPP mode.”

“The airport’s maintenance and operation will still remain under the PPP scheme after it will be turned over to the government upon its completion.”, added Pernia.

DEEPER STUDY

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The Chronicle learned that the scheme for the operation and maintenance of the PhP7.8 billion New Bohol (Panglao) Airport after its scheduled completion on March, 2017 is still “under deep discussion” between the Department of Transportation (DOTr) as the implementing agency and the Public-Private Partnership Center (PPPC), acting as the facilitator, coordinator and technical advisor for public-private partnership (PPP) projects.

The PPPC defines a PPP project as a contractual agreement between the government and a private firm for the financing, designing, implementing and operating infrastructure facilities and services that are traditionally provided by the public sector.

The project is structured in such a way that the private sector gets a reasonable rate of return on its investment, according to the PPPC.

DOTr New Bohol Project Director, Engr. Edgardo Manalili also confirmed to the Chronicle that the refinement of the existing provisions of the O&M bidding under the PPP mode for the airport is being worked out.

DELAY FEARS

The PPP Center announced recently the scrapping of the five regional airports – New Bohol (Panglao), Davao, Iloilo, Cagayan de Oro City and Bacolod airports under the PPP after the DOTr considered the funding of the O&M placed under the General Appropriations Act (GAA) and Official Development Assistance (ODA)

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Projects funded under the GAA are administered by the government raising apprehensions that delays will hamper the completion of projects judging from the government’s track record of implementation.

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Serious concerns about the repercussions of the sudden policy shift of the government on the future of the airport straddling four barangays (Bolod, Tawala, Lourdes, Danao) in the municipality of Panglao were raised by top provincial officials during the recent visit of Pernia in Bohol on June 14, 2017.

ENTICING INVESTMENT

With the recent changes in the procurement scheme for the O&M of the five regional airports, the New Bohol airport stood alone under the PPP scheme that prompted fears that investors will shy away from the bidding process.

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 “Even as a stand-alone project, it will still attract investors with the bidding criteria responsive to the operational and maintenance requirements of the new airport”, according to Pernia.

Under Pernia, the NEDA board, in their first meeting on September 14, 2016 under President Rodrigo Duterte approved the change in the scope of the New Bohol Airport to include the runway extension from 2 kilometers to 2.5 kilometers and the change of the terminal building from single-storey to two-storeys with passenger boarding bridges.

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The expansion of the floor area was also approved from 8,400 square meters to 13,300 square meters in anticipation of the increase in passengers to Bohol and other tourist destinations in the Visayas. The approved changes increased the total project cost from PhP7.4 billion to PhP7.8 billion. 

CONSTITUTIONAL LIMITS 

According to Pernia, the maintenance and operation contract provisions will consider the extension of the contract period to 35 years to ensure a more viable period for investors to recoup their investments.

Rappler in an article by Mara Cepeda on January 27, 2017 article quoted Speaker Pantaleon Alvarez in a DZMM interview that the bidding scheme for the maintenance and operation of the five regional airports “is disadvantageous to the government.”

Alvarez was quoted that the DOTr scheme of granting the winning bidders the exclusive rights to operate, maintain and upgrade the airports for 30 to 35 years is “unconstitutional” and must need a congressional franchise. 

The PPP Center through Alma Mae Agne, Information Officer IV, Knowledge Management Division emailed the Chronicle “This is a very recent development and our team is still in deep discussion with the implementing agency at this very moment.”

SUDDEN CHANGE

Earlier, the PPP Center bundled the five regional airports into two groups with the New Bohol Airport, Laguindingan Airport (Misamis Oriental) and Davao International Airport (Francisco Bangoy International Airport) in one package while the Bacolod-Silay Airport and Iloilo Airport in the other group.

According to the then Department of Transportation and Communication (DOTC) during the Aquino administration the scheme is more appealing to investors considering the larger foot traffic estimated at a combined annual passenger volume of 4 million.

The DOTr during the Duterte administration abandoned the “bundled” scheme and “unbundled” the five regional airports into individual projects under the PPP mode but unexpectedly scrapped the whole funding strategy and favored the funding mode placed under the GAA and ODA.

The PhP7.8 billion New Bohol (Panglao) Airport is funded using a Special Terms for Economic Partnership (STEP) loan from the Japan International Cooperation Agency-Overseas Development assistance (JICA-ODA) with a counterpart fund from the Philippine Government. (Chito M. Visarra)

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