In ASIA PACIFIC, the Macquarie Group is expected to sell its 50.1% stake in Australia’s Hobart Airport. Macquarie has downsized its airport portfolio but retains some irons in the fire.
The International Finance Corporation finalised agreements for the long-term (25-year) operations and maintenance (O&M) concession for Clark International Airport between Philippines’ Bases Conversion and Development Authority and the North Luzon Airport Consortium, comprising Changi Airports Philippines, Filinvest Development Corporation, JG Summit Holdings and Philippine Airport Ground Support Solutions. This is the first airport project in the Philippines to be tendered under the Philippines Government’s recent hybrid PPP policy.
The Philippines’ ‘super consortium’ of eight firms led by Aboitiz Infra Capital has called on the Department of Transportation (DoTr) to expedite the ‘Swiss challenge’ process for redeveloping Manila Ninoy Aquino International Airport (NAIA), to allow works to commence in 2H2019. The Swiss challenge process allows the consortium to match offers from other developers.
In Sri Lanka, Airport and Aviation Services Sri Lanka commenced operation of Sri Lanka Air Force facilities at Ratmalana and will invest LKR825 million (USD4.6 million) to improve infrastructure at the airport. The country’s Cabinet approved a proposal to commence formal negotiations with India’s Government regarding plans to permit Airports Authority of India to participate in the operation of Mattala Rajapaksa International Airport.
The FLC Group proposed investing in Ho Chi Minh City Tan Son Nhat’s third terminal. Under the Airports Corporation of Vietnam’s (ACV) plans, works on the VND11.43 trillion (USD488 million) project will commence works in 3Q2020, with completion targeted for 2Q2022. ACV itself is prepared to invest up to USD1.5 billion in the first phase of Long Thanh International Airport‘s development. The total cost of the project is estimated to be USD5.4 billion, with phase one due for completion by 2025.
Airports Authority of India’s tender to operate Ahmedabad Airport under the terms of a 50-year concession contract attracted interest from 15 potential investors. Ahmedabad is one of six AAI airports undergoing the partial privatisation process. Subsequently, the Adani Group obtained five 50-year contracts to run Ahmedabad plus Thiruvananthapuram, Lucknow, Mangalore, Guwahati, and Jaipur airports on the basis of a ‘per passenger fee’ but the government will delay the award of a contract for their operation until the conclusion of the 2019 Indian general election in late May-2019.
GMR Infrastructure presented the highest bid for the green field Bhogapuram Airport construction project. The contract is expected to be awarded in March/April 2019.
Malaysia’s Government plans, unusually, to adopt a private financing initiative (PFI) approach to fund Penang International Airport’s upgrade and expansion works. A PFI is used where private firms are contracted to complete and manage public projects. They have been controversial where they have been off-balance sheet to circumvent budgets and more so where very high fees have been charged, often in tandem with draconian terms of service provision. They are rarely used in the airport sector.