THE International Finance Corporation (IFC), a member of the World Bank Group, announced that it has finalized the agreement for the long-term operations and maintenance (O&M) of Clark International Airport.
The agreement was signed between the Bases Conversion and Development Authority (BCDA) and the North Luzon Airport Consortium, comprised of Changi Airport of Singapore, Filinvest Corporation, JG Summit and Philippine Airport Ground Support Solutions.
The 25-year concession agreement, which involves the management of the entire Clark airport facility, follows the engineering, procurement and construction (EPC) public-private partnership (PPP) that was concluded in 2017.
This is the first airport project in the Philippines to be tendered under the Philippine government’s recent hybrid PPP policy, the IFC said in a statement.
Under the project, a new 100,000-square meter passenger terminal will be built, positioning the airport as a world-class facility and boosting air transport capacity for the Greater Capital Region.
It will serve an estimated eight million passengers annually, four times its current capacity of two million, and is expected to reduce the strain on the congested Ninoy Aquino International Airport.
The project will also help create jobs and increase development in Central Luzon, a growing economic center.
IFC was the lead transaction advisor to BCDA in helping structure and tender both the EPC and O&M contracts. IFC also prepared the project and conducted competitive tenders with support from the World Bank’s Global Infrastructure Facility (GIF).
Vivek Pathak, IFC director for East Asia and Pacific, said: “This project demonstrates IFC’s willingness to test and try out new PPP models in support of the government’s goal to deliver crucial infrastructure that is key to sustaining the country’s growth momentum.”
He added that the handover of the airport to a globally-recognized operator will also help ensure quality service delivery and boost traffic connectivity to the northern provinces of the country—as well as to the region and the rest of the world.
BCDA President Vince Dizon said, “As the first hybrid PPP airport awarded through a transparent and competitive tender, we are confident that Clark airport will soon be able to welcome more passengers with higher-quality service. IFC’s advice has been instrumental in structuring these transactions, which have become a model for hybrid PPPs in the Philippines.”
Jordan Schwartz, World Bank director for Infrastructure Finance, PPPs Guarantees and co-chair of the GIF’s Governing Council, for his part said, “The GIF is pleased to have supported the BCDA and IFC structure. It’s truly an innovative solution that brings in strong, private-sector experience in operating airports.”
Over the past 30 years, IFC’s PPP Transaction Advisory team has supported governments in over 100 countries. During this period, eight PPP projects have been successfully implemented with the support of IFC as transaction advisor to the Philippine government. (PR)