DoTr says Clark O&M template for other deals

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An April 23 photo release of the Bases Conversion and Development Authority shows work on the new Clark airport terminal under way.

By Denise A. Valdez

THE DEPARTMENT of Transportation (DoTr) will start requiring all proponents of airport projects to draft concession agreements patterned after the one signed with the North Luzon Airport Consortium (NLAC) for the operations and maintenance (O&M) of the Clark International Airport.

Transportation Secretary Arthur P. Tugade told reporters last week that he wants to cut the process of negotiation with airport proponents shorter by making a “template” for the concession agreements.

“Clark is existing, so lahat ng proyekto, unsolicited proposal sa airport na existing, kailangan lang na i-pattern ko doon para wala nang diskusyon (The concession agreement for Clark airport is existing, so all projects, existing unsolicited proposals for airports, will just need to follow that pattern so there will be no more discussions),” he said.

Pag sinabi kong i-pattern, i-pattern mo sa kondisyon, i-pattern mo sa assumptions, i-pattern mo sa lenggwahe. Baguhin mo lang ‘yung mga financial numbers. Kasi syempre, airport, different size, different kwan. So kailangan baguhin ‘yun (When I say pattern, I mean pattern the conditions, the assumptions, the language. Change only the financial numbers because airports have different sizes and specifications. So it’s the financials that change.)”

The concession agreement for Clark airport — as discussed in the information memorandum of the Bases Conversion and Development Authority (BCDA) in its O&M bidding last year which NLAC participated in — outline separate government and private sector roles the project.

NLAC consists of Gotianun-led Filinvest Development Corp.; Gokongwei-led JG Summit Holdings, Inc.; Philippine Airport Ground Support Solutions, Inc. (PAGSS) and Changi Airports Philippines Pte. Ltd.

Among others, the government is tasked to regulate landside aeronautical fees and slot allocation, while the concessionaire handles all market risks as well as insurance for damage to assets. In case of force majeure, costs will be shared between the government and the concessionaire.

The terms also said the government will “indemnify concessionaire from material adverse government action.”

Mr. Tugade said adoption by airport project proponents of the Clark O&M concession agreement template should make the process of regulatory approval “much faster.”

Currently, the DoTr — after awarding original proponent status (OPS) — draws up concession terms after negotiations with the private sector groups concerned and submits the project to the National Economic and Development Authority’s Investment Coordination Committee (NEDA-ICC) for evaluation. The project needs the final approval of the NEDA Board, led by President Rodrigo R. Duterte, to proceed to implementation.

Mr. Tugade said this “ping-pong” process will be eliminated by letting a concession agreement that’s been analyzed by the Department of Finance be the model for all concession agreements.

Ano pa kukwenstyunin nila doon kung same template? Nagkakagulo-gulo lang kasi ito na ‘yung ‘Ifs,’ ‘Perhaps’… Hay naku, sundan mo na lang ‘yung wording ko (What else would they question if it’s the same template? It only takes longer because of the ‘Ifs,’ ‘Perhaps.’… So just follow my wording),” Mr. Tugade said.

This new rule comes as the DoTr has four unsolicited airport development proposals that have been given original proponent status and endorsed to the NEDA-ICC: the consortium of seven conglomerates for the Ninoy Aquino International Airport; Aboitiz InfraCapital, Inc. for the Bohol-Panglao International Airport; Chelsea Logistics and Infrastructure Holdings Corp. for the Davao International Airport; and Mega7 Construction Corp. for the Kalibo International Airport.

“We’re still awaiting the revisions of their concession agreement before we can re-endorse it to NEDA… They have to revise it based on the instruction of the secretary,” Transportation Undersecretary for Planning Ruben S. Reinoso, Jr. said in a phone call Sunday.

Chelsea President and Chief Executive Officer Chryss Alfonsus V. Damuy said in a mobile phone message at his group has been informed of the DoTr’s new plan and is “still studying” it.

“We have to review the details as how will it affect our proposals… But, by the initial looks of it, our proposals will not have much changes if we have to really adopt such Clark model,” he said.

Other projects that were given original proponent status are the Laguindingan airport by Aboitiz InfraCapital and the Iloilo and Puerto Princesa airports by Villar’s Prime Asset Ventures Inc.

The DoTr is also reviewing a proposal by Udenna Infrastructure Corp. for the Bacolod-Silay International Airport and by PAGSS for the Sayak Airport in Siargao.

“All O&M proposals for existing airports with pending approval, including those already under evaluation by ICC, need to revise draft concession agreement to adopt Clark O&M CA. Panglao and Laguindingan agreed to comply,” Mr. Reinoso said.