DOTr Proceeds With Privatization Of Airports

The Department of Transportation (DOTr) will push through with its plan to privatize a number of regional airports this year, kicking off with the one considered the gateway to Northern Mindanao, which has received renewed interest from a previous proponent.

Transportation Secretary Jaime Bautista told reporters that the DOTr would engage investors who want to take over the operations and maintenance of regional airports up for privatization.

Bautista disclosed that the DOTr has obtained a revised proposal for the privatization of the Laguindingan Airport in Misamis Oriental, which serves as the gateway for travelers headed to Cagayan de Oro, Iligan and Marawi.

In 2019, Aboitiz InfraCapital Inc. (AIC), the infrastructure unit of the Aboitiz Group, secured the original proponent status (OPS) to upgrade, expand, run and manage Laguindingan Airport.

Back then, AIC wanted to invest at least P42.7 billion to build new passenger terminals and improve the aviation equipment and facilities of the airport.

However, Bautista directed AIC to submit a revised proposal for the privatization of the gateway. Although AIC has the OPS for the project, the firm was asked to consider the new implementing rules and regulations (IRR) issued by the government for the Build-Operate-Transfer Law.

“We told the proponent to improve their unsolicited proposal for the privatization, to consider the provisions of the new IRR,” Bautista said.

With the change of plan, the DOTr has yet to assess how much the concession to operate and maintain Laguindingan Airport would cost, especially as the previous proposal was filed prior to the pandemic in 2018.

Furthermore, Bautista said he has yet to talk to the proponent about the concession period, although he expressed belief the right coverage for airports would be for a minimum of 25 years.

In 2018, AIC announced its intent to spend a total of P148 billion to take over the operations and maintenance of four airports in the Visayas and Mindanao. These gateways are: Iloilo International Airport, Bacolod-Silay Airport, Laguindingan Airport and New Bohol International Airport.

Based on records, Laguindingan Airport was operating beyond its design capacity of 1.6 million passengers per annum before the pandemic. The airport facilitated the entry and exit of around two million travelers in 2018.

Last year, Bautista said the DOTr may privatize at least 10 regional airports after it received only P2.49 billion for aviation development in 2023.

The DOTr had sought a budget of P28.3 billion to build and expand 50 airports nationwide, but the request was denied on fiscal constraints faced by the government.