Solicited bids more competitive, analysts say, as challengers to Aboitiz InfraCapital fail to emerge for Laguindingan Airport

ABOITIZ INFRACAPITAL, INC. has a solid track record in running airports, but the Laguindingan Airport contract could have benefited from more competition via an open auction for the concession deal, analysts said.

Aboitiz InfraCapital, which has an unsolicited offer on the table to upgrade and operate the Northern Mindanao facility, also holds the operations and maintenance deal for Mactan-Cebu International Airport (MCIA), “which is bigger and has more complicated operations than that of Laguindingan so I am confident they can do that easily,” Nigel Paul C. Villarete, senior adviser on public-private partnerships (PPP) at the technical advisory group Libra Konsult, Inc., said via Viber.

“Airport privatization attracts little interest, especially if it is small and not a gateway. Hence, no surprise about the lack of counterproposals,” Rene S. Santiago, former president of the Transportation Science Society of the Philippines, said via Viber.

The Department of Transportation (DoTr) has indicated that the contract to operate and maintain Laguindingan will be awarded to Aboitiz InfraCapital after no parties challenged its P12.75-billion unsolicited proposal.

“Aboitiz is banking on lessons from its Mactan Airport takeover,” Mr. Santiago said in a Viber message.

The Mactan-Cebu International Airport is operated by Aboitiz InfraCapital GMCAC under a 25-year concession deal. 

“With its previous acquisition of the Mactan Cebu International Airport, Aboitiz Infra has gained experience and technical know-how in airport operations and development,” according to Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH. 

The expertise the group gained from MCIA should also be expected in Laguindingan airport, Mr. Ridon said.

The complicated nature of unsolicited bids is not inviting to other parties, Libra Konsult’s Mr. Villarete said, adding that the leverage given to the original proponent scares away other parties. 

“Preparing the proposal, or the challenge thereof, costs a lot of money. On top of that, even if you do have an offer that is better than the original proponent, the latter can simply match your proposal to get the project. So, no one is really excited to submit a counterproposal,” he said.

“I think this is something the government may want to study further if there are future updates of the PPP Code,” Mr. Villarete said.

For government transportation and infrastructure projects, the government should take the solicited route, Mr. Villarete said.

“The solicited route is better because the government procures exactly what it wants and provides the specifications and conditions it prescribes for the long term,” he added.

Aboitiz InfraCapital also holds the original proponent status for the New Bohol-Panglao International Airport, which the DoTr said would be subject to a Swiss Challenge by November. — Ashley Erika O. Jose