Bulacan airport to raise the bar on unsolicited proposals

MANILA, Philippines — The approval of the Bulacan International Airport without government guarantee would raise the standards for viable public-private partnership (PPP) projects,  the National Economic and Development Authority (NEDA) said.

The NEDA Board approved Friday the concession agreement for the Bulacan International Airport  project proposed by San Miguel Holdings Corp. (SMHC).  The agreement will be executed between the Department of Transportation (DOTr) and SMHC. 

The airport project—an unsolicited PPP proposal, involves the construction, operation, and maintenance of the airport on a 2,500-hectare land in Bulakan, Bulacan, north of Manila Bay, with a total project cost of P735.6 billion. 

It involves the construction of a world-class, major international gateway with four to six parallel runways, modern terminals, a sea port, an industrial zone, and other necessary infrastructure.

The original proponent, through a build-operate-transfer arrangement, will assume the total cost of the project.

Under the concession agreement, the government will not provide any guarantee or subsidy. 

This differs from the government’s contract for the Mactan-Cebu International Airport, in which the government committed a termination payment of P20 billion in case it opens another airport in Cebu.

“These are substantial features, proving the project is adequately advantageous to the government,” said Socioeconomic Planning Secretary Ernesto Pernia. 

“They certainly raise the bar on unsolicited PPP projects,” he added. 

The DOTr will now finalize the concession agreement and convey the board approval of the report to the proponent. 

The revised agreement will then go through a final review of the Office of the Solicitor-General and the Department of Finance before it is advertised for a Swiss challenge. 

This airport project is part of the Department of Transportation’s multi-airport strategy to decongest the Ninoy Aquino International Airport.