DOTr Allocates P100M for Laguindingan Airport Expansion in 2020 NEP

BUSINESS
By MIKE BAÑOS
September 23, 2019

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The Department of Transportation has allocated P100 million (M) for the expansion of the Laguindingan Airport ((IATA: CGY, ICAO: RPMY) in Misamis Oriental in the National Expenditure Program (NEP, or Budget) for 2020.

This was confirmed by Cabinet Secretary Karlo B. Nograles during the recently concluded 28th Mindanao Business Conference in Iligan City.

“For the 2020 budget, the DOTr proposed funding for the aviation sector amounting to P865 million for the development of airports and the upgrading of airport facilities,” Nograles said. “Of this figure, P100 million will be allocated for the development of Laguindingan Airport”.

“The Laguindingan Airport Original Proponent Proposal is undergoing NEDA vetting and we believe that this will soon be approved,” he added. 

DOTr previously allocated P90-M under its 2019 budget for the procurement of consultancy services for the preparation of detailed engineering and design for the expansion of the passenger terminal building.

The Philippine Chamber of Commerce and Industry in Region X (PCCI-X) and its affiliate chambers and organizations passed a resolution a year ago requesting DOTr Sec. Arthur Tugade to prioritize the development and expansion of Laguindingan Airport within the next five years (2019-2023).

 “Actually, DOTr’s response was to re-open the proposed expansion project to a Public-Private Partnership (PPP),” said Ma. Teresa R. Alegrio, Region 10 Governor, of the PCCI which spearheaded the resolution.

 “Aboitiz InfraCapital Inc. (AIC) has been granted the Original Proponent Status (OPS) by the Civil Aviation Authority of the Philippines (CAAP), and the NEDA Investment Coordinating Committee (NEDA- ICC) is currently reviewing the revised proposal including the new budget of P42.7-Billion (B).  Next step is for NEDA Board to finally approve the proposed expansion, then subject it to a Swiss Challenge within 30 days,” she added.

The resolution was signed by the chambers of commerce and industry of Cagayan de Oro, Iligan, Kaamulan (Bukidnon), Ozamiz and Marawi, the Cagayan de Oro Chamber of Industries (COCI), Cagayan de Oro Hotels & Restaurants Association (COHARA), Misamis Oriental Filipino-Chinese Chamber of Commerce and Industry (MOFCCII), Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, PhilExport 10, Oro Bankers Association, CDO ICT Council and Cagayan de Oro Travel and Tours Association (COTTA).

 

Executive Order (EO) 230 (Reorganizing the National Economic and Development Authority) established the inter-agency Investment Coordination Committee (ICC) as one of the committees under the NEDA Board engaged in rationalizing national public investments and expenditures.

The PCCI-X resolution noted that the original proposal to improve the capacity and operations of the Laguindingan airport included upgrading the facilities /equipment  to conform to international standards, specifically, the operations and maintenance (O&M) of the Airport along with the expansion of other necessary facilities and support infrastructure.

The Laguindingan Public Private Partnership (PPP) Project aims to upgrade the current facilities of the Laguindingan Airport such as expansion of the Passenger Terminal Building (PTB), apron and runway extension, and improvement of existing airport facilities to support safer aircraft operations, increased passenger and cargo traffic, and capacity expansion.

Originally, the project was included as one of the five Regional Airports Public-Private Partnership (PPP) Projects of the DOTr and CAAP. However, the NEDA Board approved the proposal of the DOTr  in 2016 to unbundle the five airport projects that were approved by the NEDA Board in 2014 under PPP scheme. The rationale for the proposal is to expedite early completion of PPP selection and awarding.

Aboitiz InfraCapital (AIC) submitted to DOTr in 13 August 2018 an unsolicited proposal for the Upgrade, Expansion, Operations, and Maintenance of the Laguindingan Airport.

The proposal was submitted to NEDA-ICC Secretariat for review which subsequently required AIC to revise it using the Operating and Maintenance (O&M) contract it awarded for the Clark International Airport.

“Because of the NEDA-ICC wanting us to copy the O&M contract from Clark, we basically had to start from square one, rewrite the entire contract; we have submitted it to the CAAP, they have approved it, and it is now being reviewed by the Department of Transportation (DOTr) before submission to NEDA ICC,” said Jose Emmanuel Reverente, VP-Aboitiz InfraCapital, Inc. (AIC) during a presentation during the 28th Mindanao Business Conference held recently in Iligan City.

“Since we have copied the Bohol Panglao Airport proposal that has been approved by NEDA ICC Technical Committee, we are optimistic the revised Laguindingan contract will go through much faster,” he added. “We are very hopeful by the end of this year, the contract can be awarded to us after the Swiss Challenge process.”

For the 2020 National Expenditure Program (National Budget) CAAP  proposed a budget of P150-M for the extension of the existing airport runway by 300 meters from 2.1 to 2.4 kilometers to comply with requirement for its night rating.

However, this has been reduced by DOTr to P100-M as announced by Nograles during the 28th MinBizCon.

The scope of the expansion for the Laguindingan Airport would be implemented through the PPP modality in accordance with the approved plan covering the expansion/construction of new passenger terminals, along with all associated infrastructure and facilities as per applicable standards.

The scope of works also cover the installation of all the required equipment and associated facilities as per ICAO standards such as the provision of required works with respect to the existing terminal, along with all  associated infrastructure and facilities to handle operations until the development of the new passenger terminal; O&M of the passenger terminals (new and existing) during the entire concession  period; and enhancement/development of airside facilities to meet the enhanced scale of operations at the airport over the required duration; and O&M of all enhanced airside facilities, including, the apron, runway and taxiway.

 Earlier,  the NEDA Board approved  in 20 July  2014 the expansion of the Laguindingan airport in three  phases: 2015-2017 (Phase 1) , 2024-2026 (Phase 2) and 2033-2035 ( Phase 3) under a PPP) modality valued at P14 billion (B) to include the development, operation and maintenance of the airport.

 On January 24, 2017, an Invitation to Pre-Qualify and Bid for the development and O & M of the Laguindingan Airport was posted in the DOTr, CAAP and PPP center websites.

However, on May 22, 2017, DOTr through its General Bid Bulletin 04-2077 addressed to the Pre-Qualification Bids and Awards Committee, advised all prospective bidders that the government had decided instead to pursue the expansion and augmentation of the Laguindingan airport using Official Development Assistance (ODA) or General Appropriations Act ( GAA) funding.

But DOTr made another turnaround when it informed the Regional Development Council Region X (RDC X) Council on May 28, 2018, that the O & M would  again be undertaken through PPP.

Then in June 2018, CAAP informed RDC-X it had allocated P181.125-million for the expansion of the Passenger terminal building. Despite this, the expansion of the cargo building, runway and other facilities was not specified.

 In response, the private sector led by PCCI-10 requested DOTr to prioritize the expansion of the Laguindingan Airport by including in its budget allocation for 2019, the construction of a new passenger terminal and cargo building, enhanced airside facilities, including the apron, runway and taxiway within the next five years.   

The resolution also stressed the urgency of fast tracking of a new Operations and Maintenance ( O&M) service contract thru the PPP scheme , even as DOTr and CAAP remain responsible for the air traffic, control and air navigation facilities provisioning and operation.


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