Laguindingan Airport Expansion on take-off roll

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By Mike Baños
August 7, 2019

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CAGAYAN DE ORO CITY – Help is on the way for the increasingly congested Laguindingan Airport in Misamis Oriental.

Even as it opened in 15 June 2013, air passenger traffic at the Cagayan de Oro Lumbia Airport it was designed to replace had already exceeded the 1.6 million design capacity of the Laguindingan  Airport’s passenger terminal building (PTB).

“To put it bluntly, the replacement airport was congested upon opening,” said a former DOTC official involved in its planning.

When the passenger traffic exceeded 2 million annual passengers last year, the need for a larger terminal that could accommodate the current and expected passenger volume over the medium term became urgent and critical.

On a year-on-year basis alone, the Civil Aviation Authority of the Philippines ( CAAP) figures for the past 10 years show passenger traffic at the Cagayan de Oro Lumbia Airport increasing at an annual rate of 8.7% from 902,133 in 2008 to 2,079,683in 2018 (doubling passenger volume every 8.5 years.)

Recent growth in air cargo traffic was even more impressive, soaring 44% from 2017 to 25,366 metric tons (MT).

The 11% increase in the number of flights from 2017 to 2018 (17,478 aircraft takeoffs and landings) was mainly responsible for the meteoric rise in both passenger and cargo movements.

The Department of Transportation (DOTr) originally budgeted P400-million (M) for the terminal building expansion, but this was reduced to P180-M, then again halved to P90-M, before being slashed altogether by the Department of Budget and Management (DBM) from the 2019 General Appropriations Act (GAA).

However, the business sector lobbied strongly for the restoration of the reduced budget and the P90-M was eventually restored through a Congressional Initiative by Rep. Juliette Uy (2nd District, Misamis Oriental).

”While we appreciate the 90M Congressional Initiative Fund restored by Rep. Juliette Uy, this amount is barely enough to refurbish the dilapidated areas including the poorly designed comfort rooms and malfunctioning elevators,” said Engr. Elpidio M. Paras, president of Promote Northmin Inc.

“Government should now fast track the entry of private sector companies to expand and improve all the facilities of Laguindingan so that it can already accommodate direct flights from regional and international destinations, including lengthening the runway to meet wide body jet aircraft,” he added.

Sources at the DOTr said a portion of the P90-M would be used for the Detailed Engineering (DE) of the proposed expanded passenger terminal building. The bidding process for an independent consultant to undertake the DE is now being processed and the contract is expected to be awarded by the latter part of 2019.

The balance of the P90-M would used to rehabilitate dilapidated portions of the terminal building such as the comfort rooms.

Even if the original P90-M would already be used up, construction of the new PTB would still continue with the proviso the funds used for this purpose would be reimbursed to the national government by the winning bidder for the Public-Private Partnership (PPP) project to develop and expand the Laguindingan Airport faculties.

In a recent report from a national business daily, Aboitiz Equity Ventures (AEV) Chief Financial Officer Manuel R. Lozano said Aboitiz InfraCapital, Inc. (AIC) is currently awaiting approval from the National Economic and Development Authority (NEDA) for its unsolicited proposal to expand the Laguindingan airport.

“(The team)’s hope is that it will be done by August. We’ll see. They are regularly in contact with DOTr and NEDA,” Mr. Lozano said.

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.

In a related development, DOTr Sec. Arthur Tugade announced last 15 July the proposed extension of the 2.1 kilometer runway to 2.4 or 2.5 kilometers is proceeding as planned.

The P250-M budget for this project is already included in the 2020 National Expenditure Plan (NEP), which Congress wants approved before the year end.

This was part of the Feasibility Study expansion proposal endorsed by the Regional Development Council for Region 10 (RDC-X) and approved by the NEDA Board in 2014.

Once the expanded PTB and extended runway are completed as planned within the next two years, Laguindingan Airport would be able to accommodate true wide body aircraft such as Cebu Pacific’s Airbus A330-343 which can accommodate 436 passengers and carry up to 70MT of cargo on each flight.

This would also enable Laguindingan Airport to receive long haul international flights from Europe, Asia and the Americas within reach of the A330’s range of 13,430 kilometers or 7,750 nautical miles once international flights are introduced.

Air passenger and cargo traffic to Laguindingan is expected to boom in the next 3-5 years as the Metropolization of Cagayan de Oro as the Philippines 4th  Metropolitan Center is realized by 2025, covering two cities (Cagayan de Oro/El Salvador) 11 municipalities in Misamis Oriental and Bukidnon. Six more municipalities may join Metro Cagayan de Oro in the future.

Nearby big ticket developments such as Ayala Land’s Habini Bay in Laguindingan, the University of Science and Techology’s TechoPark in Alubijid and the imminent construction of integrated steel mills at the Phividec Industrial Estate in Villanueva and Iligan City is expected to further fuel the development boom in the region which accounted for 25% of the P907.2 billion investment projects registered in the Board of Investments (BOI) in 2018, which was the highest in BOI’s 51-year history.

Meantime, the CAAP is pursuing the full Night Rating of the Laguindingan Airport by complying with the requisite Air Navigation facilities.

Although it has been accommodating night flights since 29 March 2015, the airport continues to operate with night flight restrictions. Allowing airports to operate for longer hours enable them to service more flights, passengers and cargo. The DOTr aims to have all the country's airports to be night-rated by the end of the Duterte administration in 2021.

Currently 20 of the country’s 42 airports are now capable of handling evening flights, the agency said. Five more airports are programmed for night rating by the end of 2019.

DOTr estimates the upgrading of an airport for night operation costs around P54 and P120 million, consisting of installation of runway lights and navigational equipment.

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