Laguindingan AirportExpansion ready for RDC-X Full Council nod

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By Mike Baños
March 9, 2020

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The proposal to Upgrade, Expand, Operate and Maintain the Laguindingan Airport has been endorsed to the full council of the Regional Development Council of Region X for its endorsement to the National Economic Development Authority Investment Coordinating Council (NEDA-ICC).

If approved, the proposal will be endorsed by the NEDA-ICC to the NEDA Board headed by President Rodrigo Duterte which will trigger the Swiss Challenge process for the final selection of the winning proponent.

    The unsolicited proposal from Aboitiz Infrastructure Corporation (AIC) was favorably endorsed by both the Municipal Development Council of Laguindingan, Misamis Oriental last February 14, 2020 and the Provincial Development Council of Misamis Oriental last February 21, 2020.
    “Northern Mindanao has already endorsed the Laguindingan airport expansion project to the NEDA Board as a high priority project and hopefully within the year, government will be able to undertake the Swiss Challenge process because they know how urgent it is,” said NEDA-X Regional Director Mylah Faye B. Cariño.
    “However, the time would ultimately depend on the number of companies which take up the Swiss Challenge and how viable the proposals the submit would be,” she added.
    Not the least, the RDC-X Infrastructure & Utilities Development Committee favorably endorsed the proposal for the approval to the full council meeting scheduled in the middle of this March. RDC-X is chaired by Misamis Oriental Gov. Yevgeny Vincente Emano and co-chaired by Engr. Modesto Babaylan.
    The Laguindingan Airport Project will be implemented by the Civil Aviation Authority of the Philippines (CAAP) and will involve the upgrade, operations and maintenance, and future expansion of the Laguindingan Airport. The project aims to address the Laguindingan Airport’s existing capacity constraint issue and accommodate air traffic growth.

Regional Gateway

AIC said the Laguindingan Airport is a strategic entry point into Northern Mindanao which has experienced tremendous growth over the past years and is progressively catching up with the more developed parts of the country.

“As a regional airport serving Northern Mindanao and its adjacent regions, CGY/RPMY has been serving six provinces, two highly urbanized cities and five component cities with an average of two million passengers annually for the last three (3) years,” said Ma. Teresa R. Alegrio, vice president for Mindanao of the Philippine Chamber of Commerce and Industry (PCCI), which has been instrumental in pushing for the airport’s immediate expansion.

 “Laguindingan Airport has become an important logistic network for over 150 medium to large scale industries including four major thermal power plants, the Agus-Pulangi Hydroelectric Complex. 3 industrial parks, and emerging tourism destinations,” Alegrio noted.

AIC Vision 2022

Last February 26, 2019 the CAAP granted AIC original proponent status (OPS) for its unsolicited proposal to upgrade, expand, operate, and maintain the Laguindingan Airport for a 35-year concession period.

The unsolicited P42.70-Billion project has been proposed by AIC under the Operate-Add-Transfer (OAT) PPP structure with a cooperation period of 35 years. https://ppp.gov.ph/ppp_projects/upgrade-expansionoperations-and-maintenance-of-laguindingan-airport/

“Our proposal to the national government is to run the Laguindingan International Airport including operations, maintenance, rehabilitation, and expansion over a 35-year concession,” said Jose Emmanuel P. Reverente, vice president of Aboitiz InfraCapital, Inc. (AIC).

“Our plan is to spend initially P4.2 billion pesos to expand the airport; and a total of P43-billion pesos over the concession period half for repairs/capital expenditure and the other half to maintain a high state of readiness of the capital assets,” he added.

Immediate Expansion

Reverente said the first phase of their plan calls for the immediate expansion of the terminal building.

“It is not in our best interests to construct it over a long period of time. We will want to finish it as soon as possible, so we can have that capacity readily available. We prefer to build it in phases. An integrated PPP approach that allows us to build and operate the airport is the right combination so the P43-billion we would like to invest into the expansion and maintenance,” he said.

It’s one thing to build the infrastructure but another thing to maintain its operational readiness over the entire concession period, he stressed.

“For the first phase we plan to expand the existing terminal left and right to increase capacity to about 4 million passengers per year.  After initial expansion, passenger boarding bridges will be expanded to 5 from the present 3,” Reverente said.

“Even without international flights and larger airplanes, the passenger terminal is not big enough, so our first task is to expand the passenger terminal. We believe building the terminal first to accommodate the projected passenger traffic over the short term is the better use of capital at the start. When there are more passengers coming through the airport, then the next step is to extend the runway to accept larger aircraft which normally are required to fly longer distances.”

Ultimate master plan will expand airport terminal to be able to accommodate up to 20 aircraft at any given time.

 “Pre-departure and arrival areas, includes digital signage so check in counters are flexible and can be expanded or reduced depending on the number of flight departures for any given airline at any given time to expedite check in process.”

Government Budget

For 2019, P90-million was allocated for the expansion of the terminal building most of which was used to repair dilapidated facilities of the terminal building. For 2020, P100-million has been approved for either the expansion of the terminal building and extension of the runway.

DOTr Sec. Arthur Tugade announced last July 15, 2019 the proposed extension of the 2.1-kilometer runway to 2.4 or 2.5 kilometers is proceeding as planned.

DOTr will reportedly utilize the P100 million to start detailed engineering works and much needed repairs on the Laguindingan Airport as part of the P2.9 billion augmentation budget to fund its priority projects.

“While we appreciate the P90M Congressional Initiative Fund restored by Rep. Juliette Uy, this amount is barely enough to refurbish the dilapidated areas including the poorly designed comfort rooms and malfunctioning elevators,” said Engr. Elpidio M. Paras, president of Promote Northmin Inc.

“Government should now fast track the entry of private sector companies to expand and improve all the facilities of Laguindingan so that it can already accommodate direct flights from regional and international destinations, including lengthening the runway to meet wide body jet aircraft,” he added.

Passenger Traffic Growth

When it started operations in 15 June 2013, air passenger traffic at the Cagayan de Oro Lumbia Airport that Laguindingan Airport was designed to replace had already exceeded the 1.6 million design capacity of the new passenger terminal building (PTB).

When the passenger traffic exceeded 2 million annual passengers last year, the need for a larger terminal that could accommodate the current and expected passenger volume over the medium term became urgent and critical.

On a year-on-year basis alone, the CAAP figures for the past 10 years show passenger traffic increasing at an annual rate of 8.7% from 902,133 in 2008 at the Cagayan de Oro Lumbia Airport to 2,079,683in 2018 at the Laguindingan Airport (doubling passenger volume every 8.5 years.)

Recent growth in air cargo traffic was even more impressive, soaring 44% from 2017 to 25,366 metric tons (MT).

The 11% increase in the number of flights from 2017 to 2018 (17,478 aircraft takeoffs and landings) was mainly responsible for the meteoric rise in both passenger and cargo movements.

Rising Cargo Traffic

The runway extension is also expected to address the recent growth in air cargo traffic which soared 44% from 2017 to 25,366 metric tons (MT) in 2018.

Another factor expected to increase cargo traffic is the 105-hectare (ha.) Laguindingan Technopark now being constructed adjacent to the airport as part of Ayala Corporation’s Habini Bay mixed-use development covering Laguidingan and the adjacent municipality of Alubijid.

During a previous visit, executives of German logistics giant DB Schenker said such techno parks are expected to “drive massive airfreight” like what the Ayala’s Laguna Technopark did in Luzon.

“If the runway is already extended, it is even more important for us to expand the passenger terminal. Our plans also include the refurbish and expansion of the cargo terminal. We believe if the airport is run as a commercial enterprise, we will be able to respond much more swiftly to changes in the economic environment without having to go through a multi-year NEDA process,” Reverente noted.  

“As a private enterprise, Aboitiz will help market Northern Mindanao as a destination globally to assist marketing efforts of Dept of Tourism, DTI and other government agencies increase passenger and cargo traffic to Laguindingan Airport,” he added.

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