The Department of Transportation has tapped Asian Department Bank (ADB) as an advisor to fasttrack the privatization of two big-ticket rail projects and the modernization of the country’s main gateway the Ninoy Aquino International Airport and bundled regional airports.
Representatives of DOTr and of the ADB-Office of Public Private Partnership (PPP) yesterday formally signed a contract for advisory service for modernization and capacity expansion of NAIA and bundled regional airports, Metro Manila Subway (MMSP) operation and maintenance (O&M) provider and North-South Commuter Railway (NSCR) O&M provider.
Jaime Bautista, DOTr secretary said ADB will help the agency develop the terms and reference to find the right private sector that will take over the O&M of these major rail and airport projects.
“The three transaction advisory service agreements we sign today will allow us to fast-track the completion of our ongoing big-ticket projects and the much-needed improvement in our country’s main airport,” he added.
Under the contract, the ADB will provide transaction advisory to support the DOTr in the selection of qualified and experienced private sector operators for the MMSP and NSCR. The scope includes preparing and conducting market consultations, and detailed technical, commercial, legal, and financial due diligence.
ADB will assist in discussions with key stakeholders and provide assistance on commercial and financial closing with the private sector.
By extending ADB’s advisory services on the Metro Manila subway project and the North-South Commuter Railway, Bautista said “we can finetune the selection process for the most qualified and experienced private sector operators of these rail projects once completed.”
The P488.5-billion MMSP is a 31.1-kilometer underground metro system that will transverse Metro Manila from Valenzuela City to Paranaque City with a connection to NAIA Terminal 3. It will interoperate with NSCR from Bicutan to Calamba.
Once completed in 2028, MMSP can accommodate more than half a million commuters per day and will cut travel time from Valenzuela City to NAIA.
The NSCR is a 147- km commuter railway that runs from Clark, Pampanga to Calamba Laguna. It will have 35 stations along its alignment and three depots located in Clark, Valenzuela, and Calamba. The construction of the NSCR is currently underway and will be completed in phases beginning in 2026 and will have full turnover and completion in 2029.
For the NAIA project, ADB’s transaction advisory service includes detailed technical, financial, commercial, and legal due diligence; support in preparation for submission to the National Economic and Development Authority Board for approval; preparation, and finalization of concession agreement and; development of contract implementation and monitoring capabilities.
NAIA is the busiest airport in the Philippines handling 47.8 million passengers per year pre-pandemic, Despite this high passenger traffic, NAIA has faced criticism for its outdated infrastructure and limited capacity.
Bautista clarified the government will not sell the rail and airport projects to the private sector.
When asked about the timeline for the privatization, Bautista said: “We started working… we formalized the agreement, we’re full speed ahead.”
The DOTr is evaluating the proposal of some proponents for the O&M of airports in the Visayas and Mindanao after the DOTr asked the private proponents to revise their proposals given the review rules and regulations of Public-Private Partnership. These airports include Bohol, Laguindingan, Puerto Princesa, Bicol and Bacolod.
