Regional Airports Public-Private Partnership (PPP)...

Regional Airports Public-Private

Partnership (PPP) Project

Republic of the Philippines

DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and CIVIL AVIATION

AUTHORITY OF PHILIPPINES

AIRPORT DEVELOPMENT, OPERATIONS AND MAINTENANCE PROJECTS: BACOLOD-SILAY, DAVAO, ILOILO, LAGUINDINGAN,

NEW BOHOL (PANGLAO), and PUERTO PRINCESA. Project Information Memorandum

Project Information Memorandum for Six Airports

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LIST OF ABBREVIATIONS

BOT Build-Operate-Transfer BSP Bangko Sentral ng Pilipinas or Central Bank of the Philippines CAAP Civil Aviation Authority of the Philippines CAB Civil Aeronautics Board CAGR Compounded Annual Growth Rate DOT Department of Tourism of the Philippines DOTC Department of Transportation and Communications of the Philippines EO Executive Order GDP Gross Domestic Product GRDP Gross Regional Domestic Product IRR Internal Rate of Return ICAO International Civil Aviation Organization ILS Instrument Landing System IRR Implementing Rules and Regulations ITB Instructions to Bidders ITPB Instructions to Prospective Bidders LGU Local Government Unit NEDA National Economic and Development Authority OAT Operate-Add-and-Transfer O&M Operations and Maintenance PBAC Pre-Qualification, Bids, and Awards Committee PIM Project Information Memorandum PPP Public-Private Partnership RA Republic Act ROW Right of Way


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Disclaimer The information contained in this Project Information Memorandum (PIM) and information subsequently provided to Prospective Bidder(s) through bid bulletins or other documentary forms by or on behalf of DOTC/CAAP or any of its employees or advisors, is provided under the terms and conditions set out in the Instructions to Prospective Bidders (ITPB) and such other terms and conditions subject to which such information is provided. This document is not an agreement and is neither an offer nor invitation by DOTC/CAAP to the Prospective Bidders (parties interested in bidding for the Projects) or any other person. The purpose of this document is to provide interested parties with information that may be useful to them in consideration of the Bacolod-Silay, Davao, Iloilo, Laguindingan, New Bohol (Panglao), and Puerto Princesa Airport Development, Operations and Maintenance Projects (the “Project(s)”). This document includes statements, which reflect assessments arrived at by DOTC/CAAP in relation to the Project. Such assessments and statements do not purport to contain all the information that each Prospective Bidder may require. This document may not be appropriate for all persons, and it is not possible for DOTC/CAAP, its employees or advisors to consider the investment objectives, financial situation and particular needs of each party who reads or uses this document. The assessments, statements and information contained in this document may not be complete, accurate, adequate or correct. Each Prospective Bidder should therefore, conduct its own investigations and analysis and should check the accuracy, adequacy, correctness, reliability and completeness of the assessments, statements and information contained in this document and obtain independent advice from appropriate sources. Information provided in this document to the Prospective Bidder(s) is on a wide range of matters, some of which may depend upon interpretation of law. The information given is not intended to be an exhaustive account of statutory requirements and should not be regarded as a complete or authoritative statement of law. DOTC/CAAP accepts no responsibility for the accuracy or otherwise for any interpretation or opinion on law expressed herein. DOTC/CAAP, its employees and advisors make no representation or warranty and shall have no liability to any person, including any Prospective Bidder, under any law, statute, rules or regulations or tort, principles of restitution or unjust enrichment or otherwise for any loss, damages, cost or expense which may arise from or be incurred or suffered on account of anything contained in this document or otherwise, including the accuracy, adequacy, correctness, completeness or reliability of the document and any assessment, assumption, statement or information contained therein or deemed to form part of this document or arising in any way with pre-qualification of Prospective Bidders for participation in the bidding process. DOTC/CAAP also accepts no liability of any nature whether resulting from negligence or otherwise howsoever caused arising from reliance of any Prospective Bidder upon the statements contained in this document. DOTC/CAAP may, in its absolute discretion but without being under any obligation to do so, update, amend or supplement the information, assessment or assumptions contained in this document and any of the Invitation Documents, comprised of i) the Invitation to Pre-Qualify and Bid, ii) this Project Information Memorandum (PIM) and iii) the Instructions to Prospective Bidders (to be made available in February 2015). Further, the DOTC, its employees and advisors shall not be liable to any Prospective Bidder (including the Winning Bidder) in respect of any failure to (i) disclose or make available any information, documents or data; (ii) amend, update, or supplement the Invitation Documents; or (iii) provide any information regarding any inaccuracy, error, omission, defect or inadequacy in the Invitation Documents. The issuance of this PIM and the Instructions to Prospective Bidders does not imply that DOTC/CAAP is bound to select and shortlist pre-qualified bidders for bid stage or to appoint the selected bidder or private sector proponent, as the case may be, for the Projects and DOTC/CAAP reserves the right to reject all or any of the pre-qualification documents or bids without assigning any reason whatsoever.


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The Prospective Bidder shall bear all its costs associated with or relating to the preparation and submission of its Pre-Qualification Documents including but not limited to preparation, copying, postage, delivery fees, expenses associated with any demonstrations or presentations, which may be required by DOTC/CAAP or any other costs incurred in connection with or relating to its Pre-Qualification Documents. All such costs and expenses will remain with the Prospective Bidder and DOTC/CAAP shall not be liable in any manner whatsoever for the same or for any other costs or other expenses incurred by a Prospective Bidder in preparation or submission of the Pre-Qualification Documents, regardless of the conduct or outcome of the bidding process. In purchasing the Invitation Documents, each Prospective Bidder accedes to the bid parameters, terms and obligations provided therein. In no case shall any Prospective Bidder be allowed to modify the bid parameters even if, in its opinion, it offers better terms than that provided herein.


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Transaction Packages

Background The Bacolod-Silay, Davao, Iloilo, Laguindingan, New Bohol (Panglao), and Puerto Princesa Airport Development, Operations and Maintenance Projects (the “Projects”) aim to improve services at the respective key regional airports by concessioning the operations and maintenance to private sector proponents, including required enhancement of airside and landside facilities at the respective airports.

With an objective to implement the above mentioned Projects on a PPP basis, the DOTC and CAAP propose to tender these projects for prospective bidders as packages with each package comprising three (3) airports. Subject to conditions of eligibility and participation under the Invitation Documents, BOT Law, and other existing laws, prospective bidders are free to participate in these transactions. Details of terms and conditions for participation in the bidding process including legal, technical and financial requirements set by the DOTC / CAPP for pre-qualification would be provided in the Instructions to Prospective Bidders (and its Annexes).

Transaction Packages For the purpose of this invitation to pre-qualify, the preference of the DOTC and CAAP is to have two packages of three (3) airport facilities each, as follows:

Package 1 Package 2 Puerto Princesa Airport Davao Airport Iloilo Airport Laguindingan Airport Bacolod Airport New Bohol (Panglao) Airport Key characteristics: Total traffic (2013): 4.50 million for the entire package International traffic: Puerto Princesa and Iloilo Airport

Key characteristics Total traffic (2013): 5 million for the entire package International traffic: Davao and New Bohol Airport


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Figure 2 : Province of Iloilo

Iloilo Airport Background

Iloilo Airport is located in Cabatuan, Province of Iloilo (Western Visayas region) and is among the top 5 airports in Philippines in terms of 2012 traffic data. It commenced operations in 2007 and is one of the recently completed airports in Philippines with modern facilities. Iloilo Airport presently provides both domestic and international connectivity (7 domestic destinations and 2 international destinations). International connectivity is presently to Hongkong and Singapore.

Figure 1: Location and Connectivity at Iloilo Airport

Source: CAB Schedule

Catchment Area for Iloilo Airport

Iloilo Airport mainly caters to a catchment area including the Iloilo province and the city of Iloilo. The province is in the Western Visayas Region (designated as Region VI of the Philippines) located in central part of the country.

7 domestic destinations

2 international destinations


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Western Visayas Region and Iloilo Province

The Western Visayas region (designated as Region VI of the Philippines) is located in the central part of the country and lies between the Visayan and Sibuyan Seas. Spread over a total area of 20,223 square kilometers, it is the 7th largest region of Philippines. The Western Visayas region is comprised of six provinces and two urbanized cities namely:

Aklan – Province Antique – Province Negros Occidental – Province Capiz – Province Guimaras – Province Iloilo – Province Iloilo City – Urbanized City Bacolod – Urbanized City

Figure 3: Provinces and Cities in Western Visayas Region

Source: List of Regions, National Statistical Coordination Board, http://www.nscb.gov.ph/activestats/psgc/listreg.asp

The Iloilo province occupies a total land of 4,663 square kilometers. The Province of Iloilo is bounded by:

Province of Capiz and Jintotolo Channel in the north Panay Gulf and Iloilo Strait in the south Visayan Sea and Guimaras Strait in the east Province of Antique in the west

It is further divided into five (5) congressional districts which are further sub-divided into 43 municipalities. Iloilo City, a major urbanized city, is the city capital of the province. The new Iloilo airport is located in the Cabatuan municipality which forms part of the Third District of Province of Iloilo.

Population – Iloilo City and Iloilo Province

The Province of Iloilo is the second most populated province in the Western Visayas region (after the province of Negros Occidental) contributing 33% of the region‟s population. Iloilo City accounts for 6% of the population of the Western Visayas Region. The population of the provinces in Western Visayas region in 2010 is highlighted in the table below.

http://www.nscb.gov.ph/activestats/psgc/listreg.asp


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Table 1 : Population of Provinces / Cities in the Western Visayas Region of the Philippines

Province / Cities Population (2010) % Share

Aklan 535,725 8% Antique 546,031 8% Capiz 719,685 11% Guimaras 162,943 2% Iloilo 1,805,576 27% Iloilo City 424,619 6%

Negros Occidental 2,396,309 36%

Total 6,590,888

Data on province wise population is available only upto 2010 Source: Philippine census data available at http://www.census.gov.ph/

There has been a steady increase in the population of Province of Iloilo in the past decade. The population grew at a compounded annual growth rate (CAGR) of ~ 1.50% over the period of 2000–2010. Over the period of 2007-2010, the population grew at a CAGR of 2.20% - a rate higher as compared to the decadal CAGR. Such growth in population presents a potential for air transport demand in the Iloilo region and Iloilo City.

Economy – Western Visayas Region and Iloilo province

Over the last ten years, per capita income of the country grew at a CAGR of 3.80% reaching PhP 65,884 in 20121.The economic growth and the resultant growth in per capita income has helped in increasing the spending power of the national population. The figure below highlights the economic growth trends in the country.

Figure 4: Philippines GDP growth and split

Source: World Development Indicators, World Bank available at www.data.worldbank.org

The Philippine economy has gradually transitioned from a manufacturing and agriculture based economy to a services oriented economy. The services sector is the largest contributor to the country‟s GDP accounting for 57% of the GDP in 2012 as compared to 38% of the same in 1982. Such transition of the economy to being a 1 Source: National Statistics Coordination Board

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Sectorwise contribution to GDP

Services Industry Agriculture

http://www.census.gov.ph/

http://www.data.worldbank.org/


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services oriented economy is expected to further enhance the need of air transport within the country. According to International Monetary Fund (IMF) statistics2, the Philippines is considered amongst the emerging markets with economic growth higher than the average world economic growth3. The IMF estimates that the country‟s Gross Domestic Product (at constant prices) has grown at a CAGR of 5.17% over the past ten years reaching PhP 6,312 Billion in the year 2012.4 The overall trend of the national economy of the Philippines has reflected itself in the economic trends of the Visayas region. The regional economy of Visayas grew at a CAGR of 5.44% over the period of 2003 to 2012, which is broadly in line with the GDP growth of the Philippines (5.17% over the same period). Trends in the economic growth of Visayas are presented in the following figure.

Figure 5: Gross Regional Domestic Product (GRDP) of Visayas

Source: National Statistics Coordination Board, http://www.nscb.gov.ph/grdp/2012/dataCharts/default.asp

The Western Visayas region and the Central Visayas region are the largest contributors to the regional economy of Visayas, accounting for 32% and 50% of the GRDP of Visayas region respectively. The GRDP of Western Visayas region is growing at CAGR of 5.6% which is broadly in line with overall growth in Visayas region. Iloilo is home to many industries and has an established agriculture sector. It is a leading rice producer and is also known as the “food basket and rice granary of the Western Visayas”. Further, the Province intends to become a major investment destination for business process outsourcing (BPO) services sector. Some of the key industries in the region include:

Agriculture Livestock Fishery Tourism Business Process Outsourcing Mining

2 GDP at current prices in USD; Source: IMF, World Economic Outlook Database, April 2013 3 In the period 2003-2012, the world economy grew by 3.9% CAGR; Source: IMF, World Economic Outlook Database, April 2013 4 % growth in GDP at constant prices in Philippine Peso; Source: IMF, World Economic Outlook Database, April 2013

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Iloilo City is being developed as hub for trade, commerce, and industry in the Western Visayas region and is considered as one of the “next wave” cities in Philippines. It has gained from the increased BPO industry activities in the country. Other major industries include telecommunications, utilities, banking & finance, and BPO. The city also has developed port facilities and infrastructure.

Tourism – Iloilo City and Iloilo Province

Tourism is one of the main industries in Iloilo province and is fast growing. Tourist arrivals in Iloilo have recorded 12% CAGR in the past 10 years with domestic tourists increasing at a CAGR of 13% in the past decade as shown in the figure below.

Figure 6: Tourist Arrivals in Davao

Source: DOT and local tourism offices

Some of the major tourist attractions in Iloilo include its heritage spots and old world architecture such as the following:

Iloilo Bucari Gigantes Island Janiuay Cemetery Imoy Falls Miag-ao Church Montinola-Sanson Antillan House Mt. Baloy Nadsadjan Falls Pan de Azucar San Dionisio San Joaquin Church Sicogon Island Sta. Barbara Golf Course

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Airport’s Location and Existing Layout

As indicated earlier, Iloilo Airport is located in Cabatuan, Province of Iloilo (Western Visayas region). It is about 17.3 km north-west of Iloilo City. The existing layout of the Airport is presented in the schematic below.

Figure 7: Existing Layout of Iloilo Airport

Existing Layout


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Iloilo Airport – Historic Traffic Assessment

Over the last 15 years, total passenger traffic at Iloilo Airport has grown from about 0.62 million in 1998 to about 1.87 million in 2013. International operations at Iloilo Airport commenced recently in 2012 with two (2) International flights on a weekly basis connecting Singapore and Hong Kong. The historical traffic at Iloilo airport is presented in the table below.

Table 2:Historic Traffic at Iloilo Airport

Year Passenger traffic Cargo Traffic (in Kgs)

1998 615,577 5,758,825 1999 644,756 6,473,552 2000 695,926 8,433,162 2001 639,512 5,403,378 2002 677,075 8,889,953 2003 681,477 9,262,527 2004 739,584 9,951,699 2005 708,469 10,313,732 2006 864,403 9,921,369 2007 1,002,618 10,104,427 2008 1,073,907 9,360,273 2009 1,324,148 9,331,773 2010 1,498,695 11,820,227 2011 1,707,969 11,601,045 2012 1,862,223 12,961,254 2013 1,870,722 12,667,897

CAGR last 5 Years 9.02% 7.94% CAGR last 10 years 10.86% 2.72%

Source: CAAP

Comparison of CAGRs of traffic growth over the past 15 years with respect to that of the past 5 - 7 years, indicate that passenger traffic growth at Iloilo Airport saw a significant jump in the past 5 – 7 years.

Existing Airport Facilities

Passenger Terminal Building The passenger terminal at Iloilo Airport is located to the east of the runway. The building has a total footprint of 6,140 sq. m. and floor-space area of 13,700 sq. m and consists of three levels:

Ground floor with check-in area and arrivals area o Ten (10) check-in counters o Two (2) baggage conveyors, one for domestic flights and one for

International flights o Six (6) security lanes (with one metal detector and x-ray machine each)

1st floor (mezzanine level) for offices


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2nd floor with facilities for departures flow o Three (3) PBBs (Passenger Boarding Bridges)

The table below details the areas of the existing passenger terminal facilities dedicated to passenger processing:

Table 3: Existing passenger terminal processing areas Facility Area Ground floor

Public concourse 900 sq. m. Airline ticket desks 41 sq. m. Security (Entrance) 100 sq. m. Check-in area 490 sq. m. Airline offices 88 sq. m. Immigration check 120 sq. m. Baggage Reclaim 725 sq. m.

Third floor Boarding pass check 265 sq. m. Central Security 60 sq. m. Gate lounge 1,430 sq. m. CIP lounge 284 sq. m.

Source: Iloilo Airport team, January 2014

Airside Facilities The information of the existing airside facilities at the Iloilo Airport is presented below:

Table 4: Existing Airside Information

# Particular Description 1. Area 188 hectares

2. Runway Orientation 02/20 direction

3. Runway Length 2500 m

4. Runway Width 45 m

5. Runway Strip Length 3, 120 m (for both runway ends 02 and 20)

6. Runway StripWidth 300 m

7. Stopway 60m x 45 m Asphalt

8. Clearway 300m x 150m

9. Taxiway 23 m Asphalt

10. Turning Pads 65m x 65m

11. Apron Area 48,210 sqm

12. Passenger Boarding Bridges 3 Passenger Boarding Bridges Source: CAAP


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Other Core Airport Facilities

A brief overview of various other core facilities at the airport is given below:

Car Parking Access to the airport is directly from the Pan Philippine Highway, at the north of the facilities. The passenger car parking located to the front of the terminal provides 688 spaces (CAAP 2013).The total area dedicated for car parking in Iloilo Airport is 21,376 sq. m. and includes 543 parking slots: for passengers (414 slots), government vehicles, VIP, maintenance and ATC staff, taxi stands, etc.

Cargo The cargo terminal building (CTB), with 1,280 sq. m. footprint, is located south of the terminal. The building is located on the landside/airside boundary providing air cargo service to Iloilo.

ATC The control tower and operations building (CTO) is a nine (9) storey, thirty-five (35) metres high structure located to the north of the passenger terminal. The first two (2) floors house the operations building with support facilities for the air traffic controllers. The rest of the floors comprise the control tower. The total footprint of the facility is approximately 800 sq. m.

Administration The administration building (ADM) is a two storey building located next to the CTO building, with a foot print of around 490 sq. m. It houses security and administrative functions, as well as offices of the management staff of the airport.

ARFF The rescue and fire-fighting station (ARFF) is located further north of the CTO building with direct road to the runway. The total facility consists of a one and a half storey with a footprint of 485 sq. m. It can accommodate three (3) rescue fire-fighting fire trucks and one command car, providing category 9 of Rescue and Fire Fighting Service Standards of ICAO.

Fuel farm Jet A1 or AVGAS are provided on site by Petron. Although hydrant facilities are installed, aircraft are refuelled by means of road bridger through mobile filter.

Maintenance and utilities The maintenance building is located next to the administration building, with frontage to the service roads of the airside. It is a one and a half storey, and it accommodates vehicles such as sweeper, mower, tractor and dump truck workshops.

Sewage treatment plant The sewage treatment plant (STP) and the material recovery plant (MRP) are located on the southeastern corner of the terminal area. Apart from the waste


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treatment tanks, the sewage treatment plant includes a single storey building containing the blower room storage, laboratory, and control room.

Power plants The central plant mechanical (CPM) and central plant electrical (CPE) are located between the passenger terminal building and the CTO building. The CPE can generate 2,500 kVA of power to supply the whole airport complex and its total floor area is 2,077 sq. m. The CPM total floor area is 500 sq. m.

Ground Support Equipment (GSE) The ULD yard and GSE area are included at each side of the passenger terminal building.

General Aviation There are dedicated General Aviation (GA) facilities on site. Due to the location of the GA facilities, GA passengers could be processed from the GA facilities without having to go through the main passenger terminal building, facilitating the separation of GA and commercial operations, and could include services such as private flights, ambulance services and special cargo flights.

Iloilo Airport Expansion Plans

To address the immediate requirements of capacity expansion at the Airport, the Government of the Philippines has proposed the undertaking of the expansion of the passenger terminal building and other developmental works including concreting of apron, access roads etc. at a total cost of approximately 1 billion PHP. The construction works are expected to commence around June 2015 and are expected to finish around January 2016. These developmental works would lead to provisions of additional capacity in the airport and interested players may take the above plan into consideration.

Historical Financials

Following are the historical financials for Iloilo Airport:

Table 5: Historical Financials

2010 2011 2012 2013

Total Revenues PHP 222 Million PHP 232 Million PHP 260 Million PHP 270 Million

% of Aero Revenues 88% 88% 88% 87%

Expenses PHP 105 Million PHP 105 Million PHP 126 Million PHP 192 Million


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Davao Airport Background

Davao Airport, also known as the Francisco Bangoy (Davao) International Airport is the third busiest airport in the Philippines after the Ninoy Aquino International Airport (NAIA) in Manila and Mactan-Cebu International Airport (MCIA) in Cebu. The Davao airport is located in Catitipan, Barangay Buhangin, Davao City and has been operational for more than 15 years. Davao Airport presently provides both domestic and international connectivity [eight (8) domestic destinations and one (1) international destination]. Presently, international connectivity is to Singapore.

Figure 8: Location and Connectivity at Davao Airport

Catchment Area for Davao Airport

Davao Airport mainly caters to a catchment area including Davao City and parts of the Davao Region. Davao Region (designated as Region XI of the Philippines) is located south east of Mindanao. Davao Airport serves as Mindanao‟s gateway to Asia, operating regular scheduled international flights to Singapore.

8 domestic destinations

1 international destination

Figure 9: Mindanao


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Davao Region and Davao City

Spread over a land area of 19,671.83 square kilometers, Davao region is surrounded by provinces of Caraga and Northern Mindanao to its north, Central Mindanao to its west, the Philippine Sea to its east and the Celebes Sea to its south. Davao Region is comprised of five (5) provinces and one (1) urbanized city namely:

Davao Oriental – Province Davao del Norte – Province Composeta Valley – Province Davao del Sur – Province Davao Occidental – Province Davao City – Urbanized City

Davao Occidental is the newest province in Davao and the 81st province of the Philippines, created in January 2014 out of Davao del Sur province to improve economic conditions and increase development in the region5.

Figure 10: Provinces and Cities in Davao Region


Davao City is the capital of the Davao region. The total area occupied by Davao City is approximately 2,444 kms making it one of the largest cities in Philippines. Davao City is bound by:

Davao Province on the north Davao Province and Davao Gulf on the east Davao del Sur on the south North Cotabato on the west

Over the years, Davao City has developed as a regional trade center for Southern Mindanao and has become an international trade center for the Southern Pacific Region.

Population – Davao City and Davao Region

Davao region is the most populous region in Mindanao contributing 20.4% of its total population and 4% of the population in the Philippines in 20126. In 2012, the population of Davao region stood at 4.6 million growing at a CAGR of 2.11% between 1990 and 2012. The following table shows the population of provinces within Davao Region as per the Philippine Census of 2010. 5 http://www.gov.ph/2013/01/14/republic-act-no-10360/ 6 Source: National Statistics Coordination Board



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Table 6 : Population of Davao Region

Province / Cities Population (2000)

Population (2010)# CAGR

Davao Oriental 446,191 517,618 1.5%

Davao del Norte 743,811 945,764 2.43%

Compostela Valley 580,244 687,195 1.71%

Davao del Sur* 758,801 868,690 1.36%

Davao City 1,147,116 1,449,296 2.36%

Total 3,676,163 4,468,563 1.97% *Includes population of Davao Occidental, #Data on province wise population is available only upto 2010 Source: Philippine census data available at http://www.census.gov.ph/

Economy – Davao City and Davao Region

The regional economy of Mindanao grew at a CAGR of 5.94% over the period 2003 to 2012, which is higher as compared to the GDP growth of the Philippines (5.17% over the same period). Trends in the economic growth of Mindanao have been presented in the following figure.

Figure 11: GRDP of Mindanao


Traditionally, the economy of Davao region was centered on agriculture, with produce being exported internationally to destinations such as USA, Japan, Korea, and China. Davao region is one of the largest producer of banana and coconuts in the country and is also one of the leading producers of coffee. In recent times, the region has witnessed industrialization and has enhanced its focus on manufacturing and service sectors as well such as agro-industrial businesses, tourism and outsourcing. In 2012, the services sector contributed approximately 53% of the regional economy in Davao with industry and agriculture contributing 29% and 18% respectively. The Philippine Development Plan (PDP) identifies Davao City as one of the ten “Next Wave Cities” in Philippines which have a high-growth potential in the BPO services. Other emerging sectors in the region are - tourism, health-tourism, construction etc.

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Davao Region is also considered a hub of financial services in Mindanao, with Davao City as the financial center of the region. The Davao Regional Development Plan (2011-2016) envisages ambitious targets for economic growth and development in the region targeting a 7.5% growth rate up to 2016. In order to achieve these targets, the plan proposes a strategy involving:

1. Strengthening Davao‟s industry clusters - implementing the Davao Region Industry Clusters Development Plan

2. Adoption of modern and appropriate technology to increase efficiency and productivity

3. Pursuit of Agro-industrial development – by increasing product diversification, ensuring availability of credit and increasing financial literacy

The plan also emphasizes the importance of Public-Private Partnerships (PPPs) in order to achieve the economic targets. Tourism – Davao City and Davao Region

Davao region is one of the faster growing tourism destinations in the country. It has developed a range of tourism enabling facilities such as hotels, resorts, restaurants, malls, and medical facilities. The region is also considered a Medical Tourism Hub in Mindanao with a number of hospitals, health and wellness establishments. Statistics from the National Statistics Coordination Board (NSCB) indicate that Davao City witnessed 0.68 million tourist visitors in 2010. The tourist arrivals in Davao registered an 11% CAGR in the past 10 years as shown in the figure below.

Figure 12: Tourism Arrivals in Davao


Some of the major tourist attractions in Davao include the highest Philippine mountain peak, the Philippine Eagle, pristine beaches, dive sites and historical spots. Other important tourism destinations in the region include:

Mount Apo Wildlife sanctuary at the foothils of Mount Apo Samal Island Talicud Island Aliwagwag Falls

Davao Region also attracts tourists for its festivals like Kadayawan Festival (Davao City), Musikahan Festival (Tagum City, Davao del Norte), Bulawan Festival

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(Nabunturan, Compostela Valley), Pista sa Kinaiyahan (Sta. Cruz, Davao del Sur) and Sambuokan Festival (Mati, Davao Oriental).


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Davao Airport is located in the Davao region on the island of Mindanao, 12.5km north-east from Davao city center, near the coast. The existing layout of the Airport is presented below.

Figure 13: Existing Layout of Davao Airport

Existing Layout


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Davao Airport – Historic Traffic Assessment

Davao is one of the eleven (11) international airports in the Philippines. Traffic growth in Davao airport has been broadly in line with the growth trends of total passenger traffic in the Philippines. Over the last 15 years, total passenger traffic at Davao Airport has grown from about 0.87 million in 1998 to about 2.79 million in 2013. The historical traffic at Davao airport is presented in the table below.

Table 7:Historic Traffic at Davao Airport


1998 870,560 26,978,000 1999 953,141 32,242,397 2000 954,744 41,505,298 2001 960,712 46,420,991 2002 972,496 41,323,280 2003 1,004,595 40,036,790 2004 1,151,195 43,772,437 2005 1,044,078 40,244,888 2006 1,336,027 41,543,698 2007 1,534,264 45,537,162 2008 1,691,835 33,451,207 2009 1,991,663 34,389,341 2010 2,229,616 40,806,551 2011 2,629,096 39,781,976 2012 2,791,123 43,862,646 2013 2,795,250 49,829,010


Source: CAAP

Comparison of CAGRs of traffic growth over the past 15 years with respect to that of the last few years, indicate that passenger traffic growth at Davao Airport has seen a significant jump in the last few years.


Passenger Terminal Building The passenger terminal at Davao is located north of the runway and was built in 2003 to replace the old terminal (still located south of the runway). The terminal has a total footprint of approximately 22,683 sq. m. of floor space. The existing passenger terminal building is built as a 1.5 level building:


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Ground floor with check-in hall (28 check-in counters based on data in the Area Centre 11 presentation) and arrivals (2 arrival areas, for domestic and international) with 2 baggage conveyors each

First floor for the departure area The table below details the areas of the existing passenger terminal facilities:

Table 8: Existing passenger terminal processing areas Facility Area Ground floor

Check-in area 780 sq. m. Baggage Reclaim – Domestic 900 sq. m. Greeter’s Hall – Domestic 230 sq. m. Immigration Check 300 sq. m. Baggage Reclaim – International 750 sq. m. Customs Area 230 sq. m. Greeter’s Hall – Domestic 230 sq. m.

First floor Security Check - Domestic 45 sq. m. Airport Tax Counters 30 sq. m. Emigration check 175 sq. m. Security Check – International 45 sq. m.

Other Facilities Duty free and concession 40 sq. m. Ground handler offices 62 sq. m. Airline offices 956 sq. m. Pre-departures area 3,888 sq. m. Concession area Dom 293 sq. m. Concession area Intl 394 sq. m.

Source: Davao Airport Team

Airside Facilities The information of the existing airside facilities at the Davao Airport is presented below:






5. Runway Strip Length 3,000m (for both runway ends 05 and 23) 6. Runway Strip Width 260m (150m north & 110m south)

7. Stopway 120m x 45m (for both runway 05 and 23) Asphalt

8. Clearway 200m for runway 05 and 300m for runway 23

9. Taxiway 30m Asphalt (52m with shoulders)


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# Particular Description 10. Turning Pads 60 x 67.5 m


12. Passenger Boarding Bridges 4 Passenger Boarding Bridges

Source:CAAP Other Core Airport Facilities


Car Park The passenger car parking is located to the front of the terminal and provides 688 spaces.

Cargo The cargo facility with 5,580 sq. m. of terminal building is located west of the terminal and has its own landside access road. The building is located on the landside/airside boundary providing air cargo service to Davao.

ATC The air traffic control (ATC) tower is combined with the administration building at its base for a total floor area of 1,405 sq. m. and it is positioned south west of the cargo facility.

Aircraft Rescue and Fire Fighting The rescue and firefighting station is located further south of the ATC with direct road to the runway and another one for the apron. The total facility has a 788 sq. m. building, with 6 fire trucks providing category 9 of Rescue and Fire Fighting Service Standards of ICAO (Source: AIP September 2007).

Fuel farm Fuel is provided by 3 different suppliers on site, all of which provide JETA1: o Petron (Philippines Airlines) o Phoenix (Cebu) o Lubwell (Air Asia and Sea Air)

Maintenance and utilities There is a Maintenance & FSS building (e.g. Maintenance of CAAP vehicles and storage of consumables) (899 sq. m.) The others facilities on North West of the runway are Airfield maintenance Building/Supply (1,277 sq. m.), Central plant building (776 sq. m.) and the water treatment and storage facility.

Air Force / Military activities The remaining remote apron area, which used to be the apron of the old terminal, is located south east of the runway.


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Following are the historical financials for Davao Airport:


2010 2011 2012 2013

Total Revenues PHP 353 Million PHP 424 Million PHP 442 Million PHP 454 Million % of Aero Revenues 82% 80% 81% 66%



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Figure 15: Province of Negros Occidental

Bacolod Airport Background

Bacolod Airport also known as Bacolod-Silay Airport commenced operations in 2008 and is one of the recently completed airports in the Philippines with modern facilities.The Airport is located in Silay City, Negros Occidental (Western Visayas region) and generally caters to traffic for Negros Island - including Bacolod city - which is one of the most populous cities in the Western Visayas region. Bacolod Airport presently provides direct connectivity to four (4) domestic destinations. . The airport does not currently operate any international flights, but is soon expected to commence international operations.

Figure 14: Location and Connectivity at Bacolod Airport

Source: CAB Schedule

Catchment Area for Bacolod Airport

Bacolod Airport mainly caters to a catchment area including the Negros Occidental province and the Bacolod city. The province is in Western Visayas Region (designated as Region VI of the Philippines) is located in central part of the country.


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Western Visayas Region and Negros Occidental Province

As indicated earlier, the Western Visayas region (designated as Region VI of the Philippines) is located in the central part of the Philippines and lies between the Visayan and Sibuyan Seas. Spread over a total area of 20,223 square kilometers, it is the 7th largest region of Philippines. Western Visayas region is comprised of six (6) provinces and two (2) urbanized cities namely:

Aklan – Province Antique – Province Capiz – Province Guimaras – Province Iloilo – Province Iloilo City – Urbanized City Negros Occidental – Province Bacolod – Urbanized City

Figure 16: Provinces and Cities in Western Visayas Region


Negros Occidental is one of the six (6) provinces of the Western Visayas region. The province is located in the western side of Negros Island with a total land area of 7,926.06 square kilometer. The Negros Island is the fourth largest island in the Philippines. The length of the province – north to south is approximately 375 kilometers. Negros Occidental is bound by:

Visayan Sea in the north Sulu Sea in the south Province of Negros Oriental (Central Visayas) and Tanon Strait in the east Panay Gulf in the west

The Province of Negros Occidental is comprised of six (6) districts namely, First District, Second District, Third District, Fourth District, Fifth District and Sixth District, 19 Municipalities and 12 cities. Bacolod City is the city capital of the province of Negros Occidental. Bacolod City lies on the northwestern part of the Province and on the western side of Negros Island. The Bacolod airport is located in the Silay City and is approximately at a distance of 5.5 Kms from Silay City and 25 kms from Bacolod City.

Population – Bacolod City and Negros Occidental Province



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The province of Negros Occidental is the most populated province in Western Visayas region contributing 36% of the region‟s population. Bacolod City accounts for a population of approximately 0.5 million and is the most populous city in Western Visayas. The population of the provinces in Western Visayas region in 2010 is highlighted in the table below.

Table 11 : Population of Provinces / Cities in the Western Visayas Region of the Philippines

Province / Cities Population (2010) % Share

Aklan 535,725 8% Antique 546,031 8% Capiz 719,685 11% Guimaras 162,943 2% Iloilo 1,805,576 27% Iloilo City 424,619 6%

Negros Occidental 2,396,309 36%

Total 6,590,888 Data on province wise population is available only upto 2010 Source: Philippine census data available at http://www.census.gov.ph/

The population of Province of Negros Occidental grew at a CAGR of ~ 1.15% over the period of 2000–2010. The population growth of the capital city - Bacolod City has been higher as compared to the Province, with the capital city growing at a rate of 1.78% over the period of 2000-2010.

Economy – Western Visayas Region and Negros Occidental province

The regional economy of Visayas grew at a CAGR of 5.44% over the period of 2003 to 2012, which is broadly in line with the GDP growth of Philippines (5.17% over the same period). Trends in the economic growth of Visayas is presented in the following figure.

Figure 17: GRDP of Visayas


Western Visayas region and Central Visayas region are the largest contributors to the regional economy accounting for 32% and 50% of the GRDP of Visayas region respectively. The Province of Negros Occidental is one of the largest provinces in Western Visayas and is home to many industries and an established agriculture sector. The province is one of the largest producers of sugar in the country and is

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known as the “Sugar-bowl of Philippines”. The region houses few of counties‟ largest sugar mills. Apart from sugar, other the key industries in the region including Bacolod City include:

Business Process Outsourcing Tourism Mining Agri-business

Tourism – Bacolod City and Negros Occidental Province

Tourism is one of the main industries in Negros Occidental province and is fast growing. Tourist arrivals in Bacolod are as shown in the figure below. Domestic tourists have increased at a CAGR of 8.58% in the past decade.

Figure 18: Tourist Arrivals in Bacolod


A few of the tourist locations at Negros Occidental are as follows:

Balay Negrense Museum Chapel of Cartwheels Chapel of Sta. Clara Church of Vito Hofileña Heritage House Lacawon Island Mag-aso Falls Mt. Kanlaon Volcano Mt. Malapantao Negros Museum San Sebastian Cathedral Shay Steam Train St. Joseph the Worker Church The Ruins Tinagong Dagat

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Bacolod Airport is located 5.5 km north west of Silay City in the Province of Negros Occidental (Western Visayas Region). The existing layout of the airport is presented below.

Figure 19: Existing Layout of Bacolod Airport

Existing Layout

Project Information Memorandum for Six Regional Airports

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Bacolod Airport – Historic Traffic Assessment

Over the last 15 years, the total passenger traffic at Bacolod airport have grown from about 0.45 million in 1998 to about 1.33 million in 2013. The historical traffic at Bacolod airport is presented in the table below.

Table 12:Historic Traffic at Bacolod Airport


1998 454,453 5,853,262 1999 455,199 6,414,875 2000 578,960 6,267,825 2001 533,139 6,410,424 2002 509,708 7,096,677 2003 523,312 6,391,446 2004 572,368 7,115,391 2005 551,922 6,990,922 2006 663,881 7,442,631 2007 781,454 8,105,036 2008 840,711 8,267,579 2009 1,041,619 11,674,048 2010 1,041,709 11,674,048 2011 1,198,637 12,554,767 2012 1,305,790 10,788,606 2013 1,329,799 11,777,624


Source: CAAP

Comparison of CAGRs of traffic growth over the past 15 years with respect to that of the past 5 - 7 years, indicate that passenger traffic growth at Bacolod Airport has seen a significant jump in the past 5 – 7 years.


Passenger Terminal Building The passenger terminal at Bacolod Airport is located to the East of the runway. The building has a total floor area of 6,187 sqm (3,273 sqm of footprint) and consists of three levels:

Ground floor with check-in area and arrivals area 2nd floor with administration offices and three departure holding area with 3

PBBs (Passenger Boarding Bridges) 3rd floor with retail areas, a viewing deck and airport plant rooms


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The table below details the areas of the existing passenger terminal facilities dedicated to passenger processing:

Table 13 - Existing passenger terminal processing areas

Area

Ground floor Public concourse 1,800 sqm Baggage inspection area (entrance) 68 sqm Check-in area 395 sqm Airline offices 330 sqm Baggage Reclaim 800 sqm Arrival lobby 314 sqm Second floor Departure hall 90 sqm Security Check (queuing area in Departure hall) 36 sqm

Pre-departure lounge 810 sqm CIP lounge 76 sqm VIP room 67 sqm Concession 25 sqm Roof deck floor (public) Concession 43 sqm Observation deck 180 sqm

Source: CAAP

Airside Facilities

The information of the existing airside facilities at the Bacolod Airport is presented below:






5. Runway Strip Length 3,400m (for both runway ends 03 and 21)

6. Runway Strip Width 315m

7. Stop-way 60m x 45m Asphalt

8. Clearway 640m x 300m for Runway 03 280 x 300m for Runway 21

9. Taxiway 23m Concrete

10. Turning Pads 60m x 67.5m


12. Passenger Boarding Bridges 3 Passenger Boarding Bridges Source: CAAP


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Car Access and Car Parking

Access to the airport is directly from J.Pitong Ledesma Street, north west of the facilities.The total approximate area dedicated for car parking in Bacolod Airport is 12,000 sqm and includes more than 400 parking slots: for passengers (350 slots), and ATC staff, taxi stands, etc.

Cargo

The cargo terminal building (CTB), with 1,660 sqm footprint, is located south of the terminal. The building is located on the landside/airside boundary providing air cargo service to Bacolod city.

ATC

The control tower and operations building (CTO) is a six (6) storey building located to the north of the passenger terminal. The ATC and technical staff are located within the ATC facility. The total footprint of the facility is approximately 140 sqm.

Administration

The administration building (ADM) is a one storey building located next to the CTO building, with a foot print of around 874 sqm. It houses administration (Airport managers, finance and HR) as well as concession units.

ARFF

The rescue and firefighting station (ARFF) is located further north of the CTO building with direct road access to the taxiway B. The total facility comprises a one and a half storey with a footprint of 738 sqm. The facility can accommodate 3 rescue fire fighting vehicles fire trucks and one command car, providing category 9 of Rescue and Fire Fighting Service Standards of ICAO (Source: AIP, 3rd May 2012).

Fuel farm

Regarding the fuelling facilities, Jet A1 or AVGAS are provided on request to Petron.

Maintenance and utilities

The Power House Building (PHB) is located southwest of the CTO area and has a total floor area of 343 sqm. West of this facility is a Permanent Shed Building (PSB) and to the East is a 154 sqm water tank.

Sewage treatment plant


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The Sewage Treatment Plant (SWP) is sited southwest of the General Aviation facility, with a 122 sqm footprint.

General Aviation (GA)

There are General Aviation facilities on site located South-east of the cargo area, with a dedicated GA building of approximately 1,000 sqm.


Following are the historical financials for Bacolod Airport:


2010 2011 2012 2013





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Laguindingan Airport Background

Development of Laguindingan Airport was conceptualized and studied by the Government of the Philippines over the late 80s and early 90s. The Airport is on the northern tip of Misamis Oriental. Laguindingan Airport is understood to have a design capacity of handling approximately 1.6 million passengers a year. The airport commenced operations from June 15, 2013, under Visual Flight Rules (VFR).

Catchment Area for Laguindingan Airport

Laguindingan Airport is well positioned to handle the traffic earlier being catered to by the Lumbia Airport. The Lumbia Airport in the Northern Mindanao region had a strategic advantage in terms of being located within the Northern Mindanao province and closer to the cities of Cagayan de Oro and Iligan as compared to the Davao International Airport. The Laguindingan Airport is approximately 45 kilometers from Cagayan de Oro city and is approximately 65 kilometers from Iligan city. Thus, it would be able to cater to Lumbia Airport‟s catchment area.

Northern Mindanao Region

The Northern Mindanao Region (designated as Region X of the Philippines) is composed of five (5) provinces and two (2) cities classified as highly-urbanized, all occupying the north-central part of Mindanao island. Table below presents the names and the population data for the provinces / cities.

Table 16: Provinces / Cities in the Northern Mindanao Region of the Philippines

Province / Cities Capital City Population (2010)

Bukidnon Malaybalay City 1,299,192

Camiguin Mambajao 83,807

Lanao del Norte (excluding Iligan City) Tubod 607,917

Misamis Occidental Oroquieta City 567,642

Misamis Oriental (excluding Cayagan de Oro City) Cayagan de Oro City 813,856

Cayagan de Oro City - 602,088

Iligan City - 322,821 Source: Philippine census data available at http://www.caap.gov.ph/web/downloads.htmhttp://www.census.gov.ph/

Economy - Northern Mindanao Region

The economy of the Northern Mindanao region is one of the largest regional economies in the island of Mindanao. Recently, the economy has been transforming from being largely agro-based to becoming an industry and services-led economy. However, agriculture continues to remain a key component of the regional economy, and has helped the region withstand the slowdown in industry and services sector


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during the crisis. Despite the slowdown in the global economy, the region has been able to attract significant investments in the recent past. Investments in trade, industry, infrastructure and services have witnessed significant year-on-year growth over the 2009-2011 periods. Similarly, tourism and export figures for the region over the 2009-2011 periods continue to show a healthy positive trend. Northern Mindanao is Mindanao's Trade and Service Center. Its strategic location offers traders and producers the most cost-efficient transit between Mindanao, the Visayas, and Luzon, and to major foreign markets like the United States, Japan, and Europe. Road projects connecting the region to all major points of Mindanao are understood to be in place. The region has an integrated and complementary economy. Bukidnon is positioned as the region‟s major food producer; Lanao del Norte as the industrial center; the Panguil Bay Sub region in Misamis Occidental is the region‟s fisheries and alternate tourism zone; Camiguin Island is the Tourism Haven; the Macalajar Growth Area encompasses the areas within Cagayan de Oro City as the Trade and Service Center; and Misamis Oriental as the Urbanized Agro-Industrial Center in Mindanao. Prominent Industries in the Northern Mindanao Region

The Northern Mindanao Region is home to many large industries and banking institutions. There is a significant presence of Telecommunications and BPO services sector in the region. Some of the key industries / institutions in the region include:

Treasure Steel Corporation Mabuhay Vinyl Corporation Granexport Manufacturing Corporation Petronas Energy Philippines, Inc. Pilmico Foods Corporation Pilmico Iligan Feedmill Platinum Group Metals Corporation San Miguel Corporation-Iligan Coconut Oil Plant Refractories Corporation of the Philippines Iligan Cement Corporation Mindanao Portland Cement Corporation Holcim Philippines, Inc. Iligan Bar and Rod Mill Fort Steel and Cargo Metrobank Philippine National Bank Bank of the Philippine Islands Land bank Philippine Veterans Bank East West Bank Banco Filipino


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Maranao Telephone Company Bayan Telecommunications Inc

Tourism - Northern Mindanao Region

Northern Mindanao is considered to be the eco-tourism hub of the Philippines because of its diverse environmental and cultural heritage. The region is composed of five (5) provinces: Bukidnon, Camiguin, Lanao Del Norte, Misamis Occidental, Misamis Oriental. Prominent Tourist Locations in the Northern Mindanao Region

Northern Mindanao region is a popular tourist destination considering the well-known and famous beaches in the region. Some of the popular tourist destinations include:

Misamis Occidental Aquamarine Park Hoyohoy Highland Adventure Park, Tangub City Fort Santiago, Ozamiz City White Island Mantigue Island Katibawasan Falls Tuasan Falls Tangub Hot Springs Ardent Hot Springs Makahambus Cave and Adventure Park Gardens of Malasag Eco-Tourism Village

Historic tourist inflow in Northern Mindanao Region is presented below:

Table 17: Historic tourist inflow in Northern Mindanao Region

Year Foreign Travelers Overseas Filipinos Domestic Travelers Total

2000 19,706 2,050 524,452 546,208

2001 16,203 1,038 488,825 506,066

2002 15,898 1,075 533,736 550,709

2003 16,355 942 571,343 588,640

2004 24,690 1,811 674,765 701,266

2005 29,597 3,785 674,425 707,807

2006 46,284 8,947 837,851 893,082

2007 41,226 4,791 1,350,313 1,396,330

2008 42,933 3,732 994,697 1,041,362

2009 39,883 4,819 981,707 1,026,409

Source: CAAP


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The historic domestic and foreign tourist inflow is presented in the graph as per the Northern Mindanao Regional Development Plan 2011-2016, a tourism development plan presented for Northern Mindanao and prepared by the National Economic Development Authority at Cagayan De Oro. As per this plan, the region shall endeavor to be the leading ecotourism destination of the south and to excel in business and leisure activities with its quality and standard tourism facilities, services and complementary local products. The following are among the broad strategies, that are planned to be implemented in this period of six years:

a) Strengthen the tourism hub concept; b) Entice private sector investments in tourism-related facilities and activities; c) Reinforce licensing and accreditation of tourism facilities and services groups; d) Ensure quality service providers in the Laguindingan airport; e) Pursue collaboration in planning and promoting tourism investments and

destinations; f) Promote affordable and standard tourism complementary products and

services; and g) Development and continuing improvements of logistics system and transport

infrastructure (i.e., land, sea and air), through private sector engagement, as well as public and private partnership (PPP), to better link the region„s economy to the rest of Mindanao, as well as to Luzon and Visayas.

Based on the progress in the implementation of these initiatives, the tourist inflow to Northern Mindanao region is expected to grow. The Plan has proposed following targets in terms of number of visitors in Northern Mindanao region:

A total of 17.02 million visitors for the period 2011- 2016 12 percent annual increase of domestic tourist arrival from 2011-2016 10 percent annual increase of foreign tourist arrival from 2011-2016

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Figure 20: Historic tourist inflow in Northern Mindanao Region


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Figure 21: Existing Layout of Laguindingan Airport


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Laguindingan Airport – Historic Traffic Assessment

Lumbia Airport was amongst the five (5) busiest airports in the Philippines in terms of passenger traffic. Growth for the airport has been fueled by introduction of low cost airlines in this region such as Cebu Pacific and AirPhil Express, increasing their capacities on the major routes connecting to Cagayan De Oro and Butuan. The graph below shows the correspondence of aircraft movements and passenger traffic at Lumbia airport until the year 2013. Over the years, traffic has increased from 0.51 million in 1997 to 1.63 million in 2013. Historic traffic numbers at the airport are as given below:

Table 18:Historic Traffic at Lumbia Airport

Year Passenger traffic Cargo traffic (in MTs)

1997 516,565 8,621 1998 442,957 9,191 1999 487,405 9,084 2000 470,202 11,613 2001 457,612 7,834 2002 468,884 9,515 2003 472,457 7,832 2004 545,036 9,359 2005 511,854 9,468 2006 606,216 10,379 2007 781,020 12,409 2008 884,671 11,036 2009 1,091,656 16,113 2010 1,301,502 22,245 2011 1,471,432 16,231 2012 1,622,049 21,818 2013 1,638,398 20,127


Source: CAAP

Figure 22: Historic Flight movements and Passenger traffic at Lumbia Airport

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Passenger Terminal Building The existing passenger terminal building at the Laguindingan Airport has a total space of 7,184 sq. m. and this area has been developed in a one and a half level terminal. The terminal is served by two aerobridges. The floor heights are about 4.75m to 5m. The overall height of terminal is about 15m, well within the permissible height of 45 m under transitional slope as per International Civil Aviation Organization (ICAO) norms. The passenger departure check-in area is on the ground level while the regulatory checks and security hold area are on the upper level. The commercial areas in the terminal are limited to small spaces for a snack counter, restaurant, and a business lounge. The arrival area is on the ground level only and it is served by two (2) baggage conveyor belts. Airside Facilities The information of the existing airside facilities at the Laguindingan Airport is presented below:

Table 19: Existing Airside Information # Particular Description

1. Area 354 hectare

2. Runway Orientation N 85º 30‟ 12” E

3. Runway Length Single runway of length 2,100 m

4. Runway Width Single runway of length 45 m

5. Runway Strip Width 300 m

6. Taxiways 23 m wide

7. Turning Pad Yes

8. Apron Area 46,150 sq.m.

9. Passenger Boarding Bridge 2 Passenger Boarding Bridge

Source: CAAP



Car Parking The existing car parks are located in front of the passenger terminal, between the passenger terminal and fire station building, and between the passenger terminal and cargo terminal buildings. Car parking areas have been provided for the infrastructure buildings i.e. the ATC tower, Fire Station, Administration Building, Maintenance building, Power House Building, and cold water receiving station. The total number of car parking slots available is 420, of which 380 are for passenger parking.

Cargo The existing cargo terminal is 350 sq.m. in area. It is located east of the passenger terminal at a distance of less than 100 m. The terminal is designated to handle both incoming and outgoing cargo.


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ATC The Air Traffic Control (ATC) Tower Building is located to the west of the Passenger Terminal Building. The building has an area of 1,139 sq.m. It serves as the control tower and a technical block. The height of the ATC tower is 36.7 m with the controller‟s eye at 33.5 m.

Aircraft Rescue and Fire Fighting (ARFF) The ARFF building is located between the Passenger Terminal building and the ATC tower. It is a two-floor building and has an area of 553 sq.m. There is a watch tower over the fire station building.

Admin building The administration building is located south of the ATC tower and power house. It is a two floored building with an area of 676 square meters.

Maintenance building The maintenance building is located west of the administration building. It has a floor area of 740 sq.m.

Other utilities The other utilities e.g. Power supply system, Water supply network, Sewerage network, Storm water drain network are also situated inside the airport.


Following are the historical financials for Laguindingan Airport:


2009 2011

Total Revenues PHP 73 Million PHP 100 Million

% of Aero Revenues 97% 96%

Expenses PHP 117 Million PHP 166 Million


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New Bohol (Panglao) Airport Background

The Province of Bohol is a strategic cluster for the National Tourism Development Strategy of the Philippines, home of unique natural sites and beach resorts. The Province is currently served by Tagbilaran airport (IATA: TAG – ICAO: RPVT), in complement with ferry connections to Cebu. In cooperation with the Japan International Cooperation Agency (JICA), the DOTC has selected a site on the western island of Panglao for the construction of a new international airport costing PHP 7.2 billion.

Catchment Area for Panglao Airport

The New Bohol Airport will become a core element in the development of the tourism and resort industry, allowing the Province of Bohol to compete with popular Asian destinations in Southeast Asia. The current airport of Tagbilaran has reached its full capacity and is physically and operationally constrained [hilly surrounding terrain preventing Instrument Landing System (ILS) operations clearance] to be able to receive direct international flights and expand the airport capacity. The new facility will remove the limitations constraining the underlying demand and eventually allow for simultaneous operations of domestic and international flights. The technical and physical features of the new facility will allow for international flight operations and accommodate all short and medium-haul aircrafts (such as A320 family and B737 family), which today constitutes the majority of operational fleets in Asian markets. The runway can likewise be extended seaward in the future to handle wide-body aircraft operations.

Central Visayas Region VII and the Province of Bohol

The Province of Bohol is located in the Central Visayas Region (Region VII). It has a total land area of 4,820 sq.km. and a population of 1,255,130 (2010). The capital and largest city, Tagbilaran, has a population of 96,800 (2010) and currently hosts the Domestic Airport and Harbor, offering ferry connections to major cities in Visayas and Mindanao.

Tagbilaran Airport can only handle domestic traffic due to its operational specifications. Within the Central Philippines, Region VII represents between 45%-48% of domestic traffic. The main international airport of Mactan-Cebu and the airport of Dumaguete are also located in Region VII. The domestic traffic at Tagbilaran has grown from 2% in 2001 to 11% of the Region in 2010 as shown in the table:


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Table 21:Historic Domestic Traffic (2001-2010) _ Region VII vs. Total Central Philippines

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Mactan (Cebu)

Tagbilaran (Bohol)

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Total Central Phil.*

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2001 137,334 1,860,461 39,268 2,037,063 4,241,742 1.9% 0.9% 48.0%

2002 134,877 1,733,273 76,314 1,944,464 4,134,679 3.9% 1.8% 47.0%

2003 152,376 1,850,453 104,934 2,107,763 4,362,619 5.0% 2.4% 48.3%

2004 173,496 1,947,057 159,073 2,279,626 4,965,167 7.0% 3.2% 45.9%

2005 162,915 2,263,777 196,707 2,623,399 5,367,267 7.5% 3.7% 48.9%

2006 188,465 2,467,517 240,176 2,896,158 6,106,246 8.3% 3.9% 47.4%

2007 275,991 2,985,695 344,068 3,605,754 7,477,850 9.5% 4.6% 48.2%

2008 306,182 2,940,830 398,661 3,645,673 7,992,723 10.9% 5.0% 45.6%

2009 360,360 3,835,163 561,774 4,757,297 10,089,418 11.8% 5.6% 47.2%

2010 362,551 4,206,651 572,476 5,141,678 11,543,412 11.1% 5.0% 44.5%

* Comprises Regions IVb, VI, VII and VIII.

Development of Bohol as a Key Touristic Destination

Bohol is among the highest-rated touristic destination in the Philippines, offering unique natural sites such as the Chocolate Hills, tarsiers and prime beachfronts. The new airport on the island of Panglao will offer quick access to main resort areas and Tagbilaran. The Philippine Development Plan (PDP) (2011-2016) provides that the Government shall “focus its interventions on key areas that are job generating, where the country enjoys comparative advantage, and with high growth potential.” The tourism sector is among these key areas, recognized by the PDP as a “powerful driver for economic growth, infrastructure modernization, local area development, and employment generation.” The Project will aid in achieving this objective especially because Tagbilaran and Panglao cities are included in the Strategic Destination Area (SDA). The profile of Tourism (based on the 2010 census) is as follows:

Figure 23: Profile of domestic and Foreign visitors in the province of Bohol (2010)

Domestic, 69%

Foreign, 31%

Split of Domestic vs. Foreign Visitors in Bohol (2010)

Europe, 14%

Oceania, 3%

China, 20%

Taiwan, 13% Japan,

6%

Korea, 9%

Other Asia, 8%

North America,

12%

Other O/D, 15%


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Location and Layout of the New Bohol Airport

Existing Tagbilaran Airport

PANGLAO ISLAND

MAINLANDBOHOL

Proposed PanglaoAirport


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Figure 24: Proposed Layout of New Bohol (Panglao) International Airport


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The DOTC has initiated the construction of the New Bohol Airport in2014, with financing from JICA (Japan International Cooperation Agency). Once completed, the airport will offer the following characteristics:

Table 22: Proposed Panglao Airport Specifications Item Specification

Airside - Runway Runway Orientation 03/21, ILS CAT-I Length / Width 2,000 m / 45 m / 90,000 m2 Material Asphalt Blastpad (L x l x H / Surface) 60 x 45 x 2 / 5,400 m2

Paved areas Passenger Terminal Apron 49,000 sq.m. Aircraft stands 6-C Aircrafts Taxiway 25,000 sq.m. Runway Shoulder 29,000 sq.m. Taxiway Shoulder 14,300 sq.m. Turning Pad 6,400 sq.m.

Passenger Terminal Design Parameters Terminal Concept Linear single-story Passenger Terminal Floor Area 8,281 sq.m.

Check-in Area 1,594 sq.m. (18units)

Centralized Security 411 sq.. (2 units)

Departure Immigration '56 sq.m. (4 booth)

Departure Lounge 1,370 sq.m.

Arrival Passport Control '177 sq.m. (4 booth)

Baggage Claim 1,431 sq.m. (2units)

Arrival Customs 238 sq.m. (2 units)

Baggage Break down/Make up 566 sq.m.

Government Office 631 sq.m.

Greeter & Well wisher '2,000 sq.m.

Restaurant and Concessionaires 982 sq.m.

VIP Lounge, Circulation & Others 707sq.m.

Other Facilities Cargo Terminal Area n/a R&FFF 901 m2 / 3 Fire Fighting Trucks Maintenance Building ATC Tower (Height / Type/ Surface) Power House 903 m2 Administration and Operations Building 1,674 m2

Source: DOTC, JICA

Historical Traffic at the Airport of Tagbilaran

Tagbilaran Airport has experienced a sustained traffic growth in the past 6 years. Currently, the airport handles only domestic traffic; international travelers reach Bohol either by connecting flights in Manila or via Mactan, with a fast ferry connection between Cebu and the city of Tagbilaran. The total traffic has grown by a CAGR of 14.6% in the period of 2008-2013, reaching 789,800 passengers in 2013.

Figure 25: Historic Flight movements and Passenger traffic at Tagbilaran Airport


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0

500

1,000

1,500

2,000

2,500

3,000

3,500

0100,000200,000300,000400,000500,000600,000700,000800,000900,000

Pax Flights

Historic traffic numbers at the airport are as given below:

Table 23:Historic Traffic at Tagbilaran Airport


2002 76,314 1,770

2003 104,934 2,124

2004 159,073 2,294

2005 196,707 2,821

2006 240,176 3,380

2007 344,068 4,997

2008 398,661 5,496

2009 561,774 5,097

2010 572,476 4,790

2011 754,911 4,482

2012 734,045 3,273

2013 789,800 3,514

Source: CAAP


Following are the historical financials for Tagbilaran Airport:


2010 2011 2012 2013





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Puerto Princesa Airport Background

Puerto Princesa Airport is the main international gateway to the Province of Palawan, one of the top touristic destinations in the Philippines, with unique natural sites and resorts facilities. To cater for the strong passenger growth experienced since 2010, the DOTC is currently implementing the Puerto Princesa Airport Development Project (PPADP),an investment program of PHP 4.5 Billion for the construction of the new Puerto Princesa Airport, to be commissioned in early 2017 with the support of the Government of Korea,. Having exceeded its maximum passenger capacity, the current terminal facility (located south of the runway) will be decommissioned and replaced with a new passenger terminal and apron once available for operations.

Key Role of Puerto Princesa and Palawan in the National Tourism Strategy

The province of Palawan has figured prominently in the last twenty years as a major tourism destination in the Philippines. In 1991, Northern Palawan was identified as one of the five (5) major “Tourism Areas” throughout the Philippines for its unique and relatively undeveloped island offerings (i.e. Calamian Group of Islands, El Nido, Taytay, San Vicente, Roxas) in the 20-year Philippine Tourism Master Plan (TMP). The Northern Palawan area offers islands, beaches, diving, ecotourism, and adventure. This position has boosted since 2012 with the nomination of two (2) of the natural sites of Palawan in the UNESCO World Heritage Sites list. The 1991 TMP also recommended that existing, emerging, and potential tourism destinations be made accessible to at least one “international gateway”. This strategy would decentralize the concentration of tourists in the Metro Manila-Luzon area which was the most accessible area in the Philippines at that time because it had the only international gateway (Ninoy Aquino International Airport-NAIA in Metro Manila) in the country in 1990.

Region IV-B and the Province of Palawan

Palawan is located in the MIMAROPA Region (Mindoro, Marinduque, Romblon and Palawan) (also known as Region IV-B). It has a total land area of 14,650 sq.km. for a population 771,670 (2010 census). The capital, and largest city, Puerto Princesa, also hosts the only international airport of the province. Besides connections to Manila, Cebu and Iloilo, and short connections to the northern domestic airport of Busuanga, it also offers direct international connections to Malaysia and Taiwan (starting 2015).


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Table 25:Historical Domestic Traffic (2001-2010) _ Region IV-B vs. Total Central Philippines

Year Puerto Princesa (PPS) Total Central Phil.* %PPS vs. Central

PH

2001 188,713 4,241,742 4.4% 2002 147,000 4,134,679 3.6% 2003 194,176 4,362,619 4.5% 2004 267,668 4,965,167 5.4% 2005 265,201 5,367,267 4.9% 2006 280,765 6,106,246 4.6% 2007 388,083 7,477,850 5.2% 2008 477,293 7,992,723 6.0% 2009 584,232 10,089,418 5.8% 2010 822,358 11,543,412 7.1%

* Comprises Regions IVb, VI, VII and VIII.

Since 2001, the airport of Puerto Princesa has grown from 4.1% of Central Philippines7 total domestic traffic to 7.1% in 2010. This share has further stabilized, mainly due to the congestion that the airport is currently experiencing to be able to absorb the substantial increase of visitors in Palawan after 2010/2011, following the classification of the Puerto Princesa Subterranean River and Tubbataha Reef Marine Park as UNESCO World Heritage Sites, and the Subterranean River being listed as one of the 7 Wonders of Nature.

Development of Palawan as a Key Touristic Destination

The airport of Puerto Princesa is the key element in the promotion of the region as one of the top tourism destinations in Asia, potentially competing with destinations such as Bali (Indonesia) or resort islands in Thailand, and to become a strategic hub in the west of the Philippines for connections to neighboring countries (Indonesia, Malaysia, e.g. direct connection to Kota Kinabalu started in October 2013). The profile of Tourism is as follows:

7 Comprises Regions IVb, VI, VII and VIII


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Figure 26: Historic Distribution of Tourism in Palawan

Source: Tourism Office of the Province of Palawan

* Figures for 2010 for Puerto Princesa City only are not available.

The increase, and diversification, of foreign visitors in Palawan is showing the potential for expanding the international passengers (and flights) traffic base once the new airport of Puerto Princesa is available. Most of the travelers currently transit via airports in the Philippines8, and the expanded new facility will offer the possibility to airlines to operate direct flights from major hubs in Asia and beyond, increasing the prospective revenue for the airport.

8 They are accounted for as Domestic passenger at the airport but as foreign visitors when considering the tourism frequentation of Palawan.

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2008 2009 2010 2011 2012

Domestic Foreign

0%10%20%30%40%50%60%70%80%90%

100%

2008 2009 2011 2012

Origin/Destination of Foreign Visitors in Palawan*

Europe North America Korea China Japan Australia Other O/D


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Layout and Specifications of the New Puerto Princesa Airport

The new facilities are built within the current airport area (airport codes IATA: PPS – ICAO: RPVP). The airport layout is retaining the existing runway, with the relocation of the passenger and cargo facilities at the north-west end of the airport area. The new airport will also include apron areas for Military and General Aviation. A plot of land will be made available on the northern end of the new terminal building, to cater for future expansion, commercial or parking areas.


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Figure 27: Proposed Layout of New Puerto Princesa Airport

Area Available for

future terminal

extensions


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The new terminal facility and upgrade of the runway are part of the PPADP. Once completed, the airport will present the following characteristics:

Table 26: Proposed Puerto Princesa Airport Specifications Item Specification

Airside - Runway Runway Orientation 09/27, ILSCAT-I Length / Width / Surface 2,600.8m / 45m / 125,678 m2 Material SMA Stopway (60m x 60m) 7,200 m2 Holding bay 4,067 m2

Paved areas Passenger terminal Apron 34,413 sq.m Aircraft stands 2E + 4C aircraft Military Apron 17,708 sq.m ADAC Apron 7,525 sq.m Taxiway 36,270 sq.m Runway Shoulder 34,313 sq.m Taxiway Shoulder 13,287 sq.m Turning Pad 7,200 sq.m Total Pavement area 161,983 sq.m

Passenger Terminal Design Parameters Total Floor Area 12,435 m2

Terminal Concept

Linear; - Landmark Airport

- Global Standard-Compliant & Flexible Airport

- Passenger Convenience Airport - Green Airport

- Safety And Security Passenger Terminal Floor Area 12,986.27㎡

Check-in Area 1,026.65㎡ (15units)

Centralized Security 272.87㎡ (7units)

Departure Immigration 102.24㎡ (4units)

Departure Lounge 1,928.90㎡

Arrival Passport control 292.29㎡ (8units)

Custom 164.92㎡ (2units)

Baggage Claim 1,788.10㎡ (3units)

Baggage Break down/Make up 880.76㎡

Government Office 123.35㎡

Greeter &Well wisher 1,638.59㎡

Restaurant and Concessionaires 2,113.84㎡

VIP Lounge, Circulation & Others 2,653.76㎡

Other Facilities Cargo Terminal Area 1,173.55 m2

ATC Tower (Height / Type/ Surface) 24.15m (Visual Control Room Floor Level) / Pentagon Shape / 396.23 m2

R&FFF (Surface / Capacity) 630.71 m2 / 3 Fire Fighting Trucks Maintenance Building 432.76 m2 Power House 1,000.74 m2 Administration and Operations Building 746.55 m2


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Source: DOTC

Historical Traffic at the Airport of Puerto Princesa

Puerto Princesa Airport has experienced a sustained traffic growth in the past six (6) years, largely fuelled by tourism traffic to Palawan‟s unique resorts and natural sites. The province of Palawan has recorded in 2012 that 23% of 835,595 visitors are foreign travelers, from the base of 14,642 visitors recorded in 1992. Palawan has experienced a CAGR of 22.4% in the last 20 years. This is in line with the increase in passenger movements at the airport, where total traffic has grown by a CAGR of 22.9% in the period of 2002-2013, reaching 1,335,825 passengers in 2013 (2-ways).

Historic traffic numbers at the airport are as given below:

Table 27: Historic Traffic at Puerto Princesa Airport


2002 147,000 3,795

2003 194,176 5,001

2004 267,668 4,500

2005 265,201 4,745

2006 280,765 3,912

2007 388,083 4,480

2008 477,293 5,070

2009 584,232 5,440

2010 822,536 8,792

2011 986,775 9,294

2012 1,318,766 10,938

2013 1,335,825 13,999

Source: CAAP

0

1,000

2,000

3,000

4,000

5,000

6,000

0150,000300,000450,000600,000750,000900,000

1,050,0001,200,0001,350,0001,500,000

Pax Flights

Figure 28: Historic Flight movements and Passenger traffic at Puerto Princesa Airport


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Following are the historical financials for Puerto Princesa Airport:


2010 2011 2012 2013

Total Revenues PHP 50 Million

PHP 53 Million

PHP 75 Million

PHP 90 Million


Expenses PHP 45 Million

PHP 55 Million

PHP 60 Million

PHP 61 Million


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Scope and Structure of the PPP projects

Introduction

The DOTC and CAAP propose to appoint a private sector proponent under an appropriate PPP arrangement to undertake the operations and maintenance of the six airports along with constructing required additional facilities for a defined concession period. The key objectives of appointing a private sector proponent are:

Increased operating efficiency of the airports;

Increased networking and marketing of the airports;

Improved net financial benefits to government; and

Improved customer amenities.

The details of the scope of project, legal framework for the project and proposed contractual arrangements are detailed in the following sections.

Scope of the Project The scope of the Project for the private sector proponent under the PPP arrangement would cover:

a. Taking-over the operations and maintenance of the existing facilities from CAAP; b. Expansion/construction of new passenger terminal(s), along with all associated

infrastructures and facilities as per applicable standards; c. Installation of all the required equipment and associated facilities as per applicable

standards; d. Provision of required works with respect to the existing terminal (either already in

operations or newly constructed facilities, as in the case of New Bohol (Panglao) and Puerto Princesa airports), along with all associated infrastructures and facilities as per applicable standards, to handle operations until the development of the new passenger terminal(s);

e. Operations and maintenance of the passenger terminals (new and existing, as may be decided by DOTC) during the entire concession period;

f. Enhancement/development of airside facilities to meet the enhanced scale of operations at the airport; and

g. Operations and maintenance of all enhanced airside facilities, including, among others, the apron, runway and taxiway.

The following would be excluded from the scope of the private sector proponent and CAAP / DOTC would continue to be responsible for:

a. Air Traffic Control and associated services b. Air Navigation Services and associated services


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Legal Framework applicable to the Projects Republic Act No. 6957, as amended by Republic Act No. 7718 ("BOT Law”), and its 2012 Revised Implementing Rules and Regulations (“Revised IRR”), are the primary legal framework for Public-Private Partnerships (“PPP”) in the Philippines. The BOT Law enunciates the policy of the state to recognize the indispensable role of the private sector as the main engine for national growth and development. It further declares that the government shall provide the most appropriate incentives to mobilize private resources for the purpose of financing the construction, operation and maintenance of infrastructure and development projects normally financed and undertaken by the Government of the Philippines.

Proposed Specifications of Contractual Arrangements The sections below provide a brief outline of various aspects that are being considered in terms of the structuring of the Project. The final details shall be provided as part of the draft contract during the bid stage after the Pre-Qualification process:

PPP Structure An Operate-Add-Transfer arrangement is being evaluated / considered for the all the six airport projects. Under this proposed structure, the private sector proponent shall take over the operations and maintenance of the airport, undertake immediate expansion of various facilities and also undertake required capacity augmentation at the airport that may be required to cater to future demand throughout the contractual term. At the end of the concession period, the private sector proponent would transfer the airport facilities to DOTC and CAAP.

Concession Period

A 30 year concession is being evaluated / considered for the all the six airport projects.

Implementing Agency The implementing agencies for all six airport projects would be DOTC and CAAP. As highlighted earlier, CAAP would continue to provide Air Navigation and Air Traffic Control and associated services at the six airports throughout the concession period.

Performance Specifications DOTC/CAAP proposes to include Minimum Performance Standards and Specifications (MPSS) in the concession agreement. The private sector proponent would be required to operate the airport as per such defined MPSS. Further, the private sector proponent would also be required to undertake capacity augmentation at the respective airports to ensure compliance with the defined MPSS.

Tariffs at the Airport When the operation and management of the respective airports will be ceded to the private sector proponent, DOTC / CAAP will concession the levying of various charges to the private sector proponent. DOTC / CAAP will state in the concession agreement with the private sector proponent, the manner by which airport fees and charges will be levied by the private sector proponent, consistent with applicable laws as well as industry


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standards and practices. Broadly, DOTC / CAAP contemplate specifying a base tariff as identified upfront and also specify tariff increments with reference to a parametric formula.

Incentives Section 10 of the BOT Law extends to private sector proponents the Investment Incentives under the Omnibus Investments Code upon registration with the Board of Investments (“BOI”), depending on the level of capital requirements.

Continuation of Existing Contracts When the private sector proponent takes over the operation of the airports, subject to final approvals, it is currently proposed that the existing contracts will be novated by CAAP to the private sector proponent and once the private sector proponent assumes CAAP‟s existing contracts, it would have the option to, allow the contracts to expire, renegotiate the contracts, or terminate the contracts on various grounds, within the boundaries of legal requirements. The private sector proponent would also be allowed to enter into new contracts for the provision of services should there be a need to provide additional services to the airport clientele or should there be additional space to lease out.

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