In response to PCCI-X Resolution: DOTr changes Laguindingan Airport Expansion Modality

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September 11, 2019

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The Department of Transportation (DOTr) has changed the process through which the expansion of the Laguindingan Airport in Misamis Oriental would be undertaken in response to the clamor of the business sector.
    
Exactly a year ago, the Philippine Chamber of Commerce and Industry in Region X (PCCI-X) and its affiliate chambers and organizations passed a resolution 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 for the Philippine Chamber of Commerce and Industry (PCCI) which spearheaded the resolution.
    
“As you know Aboitiz InfraCapital Inc. (AIC) has been granted the Original Proponent Status (OPS) 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.
    
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 resolution noted that the original proposal to improve the capacity and operations of the Laguindingan airport included upgrading the facilities /equipments to be of international standards, specifically, the operation and maintenance (O&M) of the Airport along with the development of associated infrastructure and facilities, and the installation of all required equipment to meet applicable international standards.
    
The scope of the expansion for the Laguindingan Airport would be implemented through the Public-Private Partnership modality in accordance with the approved plan covering the expansion/construction of new passenger terminal(s), along with all associated infrastructure and facilities as per applicable standards.
    
The scope of work also cover the installation of all the required equipment and associated facilities as per ICAO standards;  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(s); and  operation and maintenance (O&M) of the passenger terminals (new and existing) during the entire concession  period;  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.
    
Last July 20, 2014, the NEDA Board approved the expansion of the Laguindingan airport in three (3) phases, 2015-2017 (Phase 1) , 2024-2026 (Phase 2) and 2033-2035 ( Phase 3) under a Public –Private -Partnership (PPP) arrangement 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.
    
But 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 has decided to pursue the expansion and augmentation of the Laguindingan airport using Official Development Assistance (ODA) or General Appropriations Act ( GAA) funding, hence the PPP process was shelved.
    
However, DOTr made another turnaround when it informed the Regional Development Council Region 10 (RDC 10) Council Meeting on May 28, 2018, DOTr that the O & M will be undertaken through a Public-Private Partnership (PPP).
    
Then on June last year, the Civil Aviation Authority of the Philippines (CAAP) informed RDC-10 it had allocated a budget of P181.125-million for the expansion of the Passenger terminal building. Despite this assurance, the time-frame for the expansion of the cargo building, runway and other facilities remains to be specified.
    
Thus, the business sector of Region 10 as represented by the local Chambers of Commerce and Industry and other business organizations were greatly concerned over the increasing volume of inbound and outbound passengers, as a result of the entry of big industries and commercial establishments, new tourism destinations such as theme parks and resorts including meetings, conventions, expositions and tourism events taking place all over the region.
    
 In its resolution spearheaded by Alegrio as PCCI-10 Governor and addressed to DOTr Sec. Tugade dated 11 September 2018, the local Chambers of Commerce & Industry of Northern Mindanao and other business organizations 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 remains responsible for the air traffic, control and air navigation facilities provisioning and operation.
    
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).
    
In a recent media, Aboitiz Equity Ventures (AEV) Chief Financial Officer Manuel R. Lozano said Aboitiz InfraCapital, Inc. (AIC) is still awaiting approval from the NEDA for its unsolicited proposal to expand the Laguindingan airport.
    
Last February 26, the CAAP granted AIC original proponent status (OPS) for its unsolicited proposal to upgrade, expand, operate, and maintain the Laguindingan Airport for a 35-year concession period.
    
In a statement, the firm said the P42.7-billion project includes capacity expansion through new passenger terminals, installation of required equipment, and enhancement and development of airside facilities.
    
"The granting of the OPS for the Laguindingan Airport opens up an opportunity for us to play a major role in improving our country's vital gateways. We believe we can be instrumental in connecting our country's local economies, thereby uplifting the lives of Filipinos," Aboitiz InfraCapital chief executive officer Cosette Canilao said. (RMB).

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