BY GEROME DALIPE IV
ILOILO City – What is taking the Department of Transportation (DOTr) and the Civil Aviation Authority of the Philippines (CAAP) so long to decide on the Public Private Partnership (PPA) offers of several firms to rehabilitate and operate the Iloilo Airport?
The Senate Public Services Committee, chaired by Senate President Juan Miguel Zubiri, yesterday held an inquiry “in aid of legislation” on the state of international and domestic airports.
Several issues besetting the operations and overall passenger experience of the Iloilo Airport were raised to the senators, who all agreed on the need for rehabilitation amid the growing number of passengers and cargo in the province.
Mayor Jerry Treñas, who attended the hearing via Zoom, told senators that the P190-million funds allocated by Sen. Grace Poe for the repair of the Iloilo Airport’s escalator, air-conditioning system, and restrooms, among others, have not yet been used by the DOTr and CAAP for such purposes.
“It has been ready since January of this year but up to now has not been used. It’s about time to put to task our good friends in the DOTr and the CAAP – this fund while they are trying to decide on how to go about with the PPP (Public-Private Partnership) offer of the Villar Group,” said Treñas.
Several conglomerates have expressed their interest in rehabilitating and managing the Iloilo airport under the PPP scheme since 2018.
“There are about 30 flights per day at the Iloilo International Airport. There are interested parties in this airport, if the government cannot spend on this, we can go for PPP. It is a mode available and is allowed by law,” Treñas stressed.
Senator Poe echoed Treñas’ sentiment.
“I don’t know what’s taking them so long to decide. The government cannot handle all of this. So what’s hindering us from granting these PPP projects to a capable conglomerate that can deliver,” said Poe.
DOTr officials told senators the negotiation with the project proponent under the PPP for Iloilo Airport has started and is expected to be completed on or before Sept. 23, 2024.
After the negotiation period, the DOTr said the final terms will be negotiated with the private proponent to be approved by the CAAP Board and the DOTr secretary.
“Active discussions” are ongoing, it said, adding the new PPP Code and the new regulations have impacts on fulfilling requirements.
Sen. Nancy Binay also called for the improvement of domestic airports as she backed the expansion of regional gateways to cater to more international and local tourists.
Binay noted the difficulties in traveling to and from local tourist destinations due to the proximity of airports, which, she added, might not have the capacity to take in more visitors.
Binay, the Senate Committee on Tourism chairperson, also lamented the lack of facilities, such as comfort rooms and rest areas, both for passengers and airport employees.
“Maybe we could address these issues in our regional airports,” Binay urged government agencies.
For her part, Tourism Secretary Christina Garcia-Frasco said they have identified key areas that would require attention to improve the overall competitiveness of airports and the need for upgrade and modernization.
“Most of our airports need significant upgrades to handle the growing volume of passengers and cargoes,” said Frasco.
The Tourism secretary pushes for sustainability of regional airports, saying it will not only increase the standing of the Philippines as a sustainable tourism destination, but also attract environmentally-conscious travelers.
She also supports the development of the regional airport and is hopeful that PPPs are being considered in these airports.
“Tourism is a vital pillar of our economy having contributed over 6.2-million employment. However, unless and until we have to improve our airport infrastructures, it is very difficult for the Philippines to compete with our Asian neighbors,” said Frasco.
Prime Asset Ventures Inc. (PAVI), the holding company of the group of real estate magnate and former senator Manuel B. Villar, Jr., is firming up plans to rehabilitate and operate the Iloilo International Airport.
In a letter dated May 6, Enrique Antonio Esquivel III, assistant secretary for aviation and airports of the Department of Transportation (DOTr), informed Treñas that they started evaluating the unsolicited proposal of PAVI on April 26, 2024.
The “negotiation” period is expected to be completed within 80 calendar days but may be extended up to 150 days.
Esquivel said the DOTr, CAAP, and the Public Private Partnership (PPA) Center intend to complete the negotiation before the deadline.
Once the negotiations are completed, the project proposal will be submitted to Transportation Secretary Jaime Bautista and the CAAP Board for approval.
If the project gets approval from the DOTr and the CAAP Board, it will then be forwarded to the National Economic and Development Authority for evaluation and approval before undergoing a Swiss challenge.
Esquivel’s letter came after Treñas renewed his call to Bautista to hasten processes for the development or privatization of Iloilo airport.
The Villar group has submitted an unsolicited proposal for the operation, maintenance, and expansion of the Iloilo airport as early as 2018. PAVI has an authorized capital of P10 billion, with Villar holding 99.99 percent of the company.
However, it suffered a setback due to the newly- enacted Republic Act 11966 or the Public-Private Partnership (PPP) Code of the Philippines, which outlined guidelines on how the implementing agency and project proponent carry out such projects.
It took effect on Dec. 23, 2023, while its implementing rules and regulations (IRR) took effect on April 7, 2024. The DOTr targets to award the project to the private entity within the first quarter of 2025.
Under the PPP Code, the implementing agency shall consider significant issues and concerns in the implementation of the project.
These include the legal, technical, economic, financial, and commercial feasibility of the project, as well as value for money, climate resilience and sustainability; and social and environmental safeguards.
The development of such a project shall commence only after the conduct of stakeholder consultation, the law provides.
The implementing agency shall secure first the approval of their respective city or town council and the local development councils.
The agency is also authorized to “identify, develop, assess, evaluate, approve, negotiate, award, and undertake” the public- partnership projects.
The approval by the National Economic and Development Authority is necessary for the proposed project worth more than P15 billion./PN
