THE PHILIPPINE and Japanese governments signed on Monday the supplemental loan agreement for the ongoing New Bohol Airport expansion project on Panglao Island.
“This supplemental loan will cover the extension of the runway from 2,000 meters to 2,500 meters. This will enable the airport to accommodate large commercial aircraft,” Finance Secretary Carlos G. Dominguez III said during the signing ceremony.
Mr. Dominguez also said the loan also covers expansion of the passenger terminal building from 8,500 square meters to 13,300 square meters.
“This anticipates problems of congestion that may arise as tourism traffic in the area will rise quickly in the near future,” he said.
The loan, coursed through the Japan International Cooperation Agency (JICA), consists of P2.1-billion at 0.1% interest for non-consulting services and 0.01% for consulting services, payable over 40 years with a 12-year grace period.
A separate statement from the Department of Transportation said that the loan “finances the re-measurement of quantities and updating of cost of new/additional equipment for the New Bohol Airport Project due to revised scope and the effect of foreign exchange rate between the peso and yen.”
The airport will be upgraded to handle regional flights within the Asia-Pacific, replacing the old Tagbilaran airport, which only hosts domestic flights.
The airport is expected to accommodate about two million passengers annually, compared to 800,000 for Tagbilaran airport.
“The New Bohol airport will be the primary gateway to the province. This will accommodate the rapidly growing number of tourists to accelerate the economic growth of Bohol and contribute to its transformation as another key economic center in the region,” JICA Chief Representative Yoshio Wada said.
Work on the New Bohol Airport began in June 2015, and is expected to be fully operational by November, according to Mr. Dominguez.
Transportation Secretary Arthur P. Tugade meanwhile said that when he took over the project from the previous administration, the progress of construction was about 5%.
“There was some improvement in the accelerated pace in construction,” he said, noting that the initial 2021 completion target was “too long.”
Mr. Tugade said the department will extend the runway further to 2,800 meters in 2019, including the construction of a cargo terminal building, parallel taxiway, and a fuel depot.
Aboitiz InfraCapital, Inc. (AIC) last month was named original proponent for the airport’s operations and maintenance contract.
Mr. Dominguez said that the New Bohol Airport is “a perfect example” of its a hybrid Public-Private Partnership (PPP) financing mode, where the government or official development assistance takes over the initial phase of the project and later bids out its operations and maintenance to the private sector.
“Basically the asset is financed with a very soft loan, and the private sector cannot match that. By getting a low loan amount we are making sure that the public is going to be served properly and they are not going to pay a very high premium, and we can do it faster,” he said.
“If some future government or some future administration needs money, they can actually sell that asset. So while we can get good financing, we are building up our asset base. That’s like the savings of the people which can be tapped if some future administration needs it,” he added.
He said that the government is looking to redevelop the told airport via a possible joint venture with the private sector.
“Tagbilaran we are thinking of maintaining for general aviation or real estate development. That’s another asset that we have we can go in a joint venture,” he said. — Elijah Joseph C. Tubayan