DOTC further sweetens deal for Cebu airport project

MANILA, Philippines - The Department of Transportation and Communications (DOTC) has amended some provisions of the concession agreement for the P17.5 billion Mactan Cebu International Airport project to make it more attractive to interested investors.

In a general bid bulletin, the DOTC  said the agency imposed a 25-year moratorium on the construction of new airports and upgrading the status of existing airports in the islands of Cebu and Mactan to international. This was five years longer than the original planned moratorium of 20 years stated in the draft concession agreement.

 â€œThe grantors shall procure that during the subsistence of this concession agreement, neither the grantors nor any government authority shall, at any time before the end of the 25th contract year, operate or cause to be operated a new international or domestic airport for handling scheduled commercial passenger traffic taking off or landing in the Mactan and Cebu islands,” the bulletin stated.

The bulletin added that the upgrade of existing domestic airport within the Mactan and Cebu islands to international status would also be prohibited.

However, the DOTC clarified that the moratorium would not apply on the development of other means of transportation as well as any new and existing airports catering to chartered flights only.

The ban would also not apply in the islands of Bantayan and Camotes also in Cebu.

The DOTC is also imposing a ban on the construction of any competing commercial car park facility or any competing hotel facilities on the land under the control of the Mactan Cebu International Airport Authority within the 500 meter radius from the perimeter of the project land.

Earlier, the DOTC agreed to amend the proposed concession agreement to make the project more viable for prospective investors. The government agreed to shoulder the payment of certain real property taxes and at the same time has extended the period of the concession agreement to 25 years instead of 20 years.

It also agreed to transfer the operation and maintenance of the aprons from the grantors to the concessionaire including the right to derive revenue and to allow flexibility on the implementation of augmentation of capacity.

The government is seeking the green light from the National Economic and Development Authority (NEDA) board to improve the attractiveness of the project being undertaken through the Public Private Partnership (PPP) scheme.

The DOTC has prequalified the MPIC-JGS Airport Consortium composed of infrastructure giant Metro Pacific Investments Corp. and JG Summit Holdings together with Aeroports de Lyon of France; AAA Airport Partners led by conglomerate Ayala Corp. and Cebu-based Aboitiz Equity Ventures together with Houston airport operator ADC&HAS as well as Filinvest-CAI Consortium of taipan Andrew Gotianun together with Singapore’s Changi Airport; Lopez-led First Philippine Airports together with New Zealand’s Infratil Asia Limited.

Other groups include the GMR Infrastructure and Megawide Consortium that includes India’s Delhi Airport; MPIC-JGS Airport Consortium composed of the tandem of infrastructure conglomerate Metro Pacific Investments Corp. and JG Summit Holdings of tycoon John L. Gokongwei Jr. together with Aeroports de Lyon of France;SM-led Premier Airport Group of retail magnate Henry Sy together with Switzerland’s Zurich Airport operators; and San Miguel-Incheon Airport Consortium of diversified conglomerate San Miguel Corp. and the operator of South Korea’s Incheon Airport.