New PPP mode luring IFC to back more infrastructure projects

MANILA, Philippines — International Finance Corp. (IFC) is supporting more infrastructure projects in the Philippines under the new private-public partnership (PPP) after the successful award of the operations and maintenance of the Clark International airport to the winning consortium.

IFC director for East Asia and Pacific Vivek Pathak said the World Bank arm served as the lead transaction advisor to state-run Bases Conversion Development Authority (BCDA) in helping structure and tender both the operations and maintenance (O&M) as well as engineering procurement, and construction (EPC) contracts for the international airport in the former US military airbase in Pampanga.

IFC also prepared the project and conducted competitive tenders with support from the World Bank’s Global Infrastructure Facility (GIF).

“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,” Pathak said.

IFC said  agreements have been finalized for the long-term O&M concession for the Clark International Airport between BCDA and the North Luzon Airport Consortium composed of Changi Airport of Singapore, Gotianun-led Filinvest Corp., JG Summit of taipan John Gokongwei, and Philippine Airport Ground Support Solutions.

The 25-year concession, involving the equipping and full management of the entire Clark airport facility, follows the EPC-PPP concluded in 2017.

 “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,” Pathak said.

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.

This is the first airport project in the Philippines to be tendered under the Philippine government’s recent hybrid PPP policy.

“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,” BCDA president Vince Dizon said.

Dizon added IFC’s advice has been instrumental in structuring these transactions that have become a model for hybrid PPPs in the Philippines.

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.