Kalibo and Iloilo Airport upgrade negotiations to conclude by September

By Rjay Zuriaga Castor

The Public-Private Partnership (PPP) Center has announced that the upgrade and expansion of two major airports on Panay Island are in the final stages, with negotiations expected to conclude by September 2, 2024.

According to the PPP Center’s website, negotiations with the proponent for the “operations, maintenance, and facility upgrade” of Kalibo International Airport began on April 29, 2024.

Mega7 Construction Corp. submitted an unsolicited proposal (USP) for Kalibo Airport in 2018 and was granted original proponent status (OPS) by the Department of Transportation (DOTr) the same year.

The P3.62 billion project involves the operation and maintenance of the existing airport facility, along with a facility upgrade that includes systems improvements and the construction of a new terminal building.

Mega7 Construction, a Manila-based company, is jointly owned by marketing and advertising firm Digichive Philippines Corp. and general wholesale merchandise firm Dominion Intertrade Corp.

Before 2018, Mega7 Construction had submitted a USP to develop the airport, but it was rejected by the DOTr due to the company’s lack of experience in airport development, operations, and maintenance.

The project will follow a Build-Operate-Transfer scheme, where the private firm finances, constructs, operates, and maintains the facility for a fixed term before transferring it to the government, with a maximum cooperation period of 50 years.

Meanwhile, the PPP Center announced that negotiations for the rehabilitation, expansion, operation, and maintenance of Iloilo International Airport in Cabatuan, Iloilo, began on April 19, 2024.

The PPP Center’s Project Development Service released the Project Evaluation Memorandum to the Government Negotiation Team on May 3.

The project proponent for Iloilo Airport’s USP is the Prime Asset Ventures, Inc. Consortium, a subsidiary of the Villar Group of Companies.

The P14.70 billion project includes expanding the Passenger Terminal Building (PTB) to meet international standards, constructing a new apron for efficient aircraft handling, and renovating the existing terminal.

New passenger service equipment will also be installed in the expanded PTB.

The project also includes the operation and maintenance of both the new and existing terminal buildings and facilities throughout the concession period.

If negotiations fail, the proponent’s OPS will be revoked, and the implementing agency may either accept a new unsolicited proposal, evaluate the next in-line proposal, open the project for bidding as a solicited proposal, or undertake the project themselves using government funds or official development assistance.

Stakeholders have been calling for the upgrades to airports in Panay, especially in Iloilo due to growing passenger volume and flight frequencies.

The Institute of Contemporary Economics, an Iloilo-based think thank, estimated that the Iloilo airport alone can rake in P800 million a year for airlines given its passenger volume and traffic.