Special Feature

ADB-supported Mactan-Cebu International Airport receives recognition as improvements continue

Posted on January 12, 2017

Continued improvements to the Philippines’ second busiest airport are bearing fruit as the Mactan-Cebu International Airport (MCIA) was named 2016’s Asia-Pacific Regional Airport of the Year by commercial aviation intelligence group CAPA - Centre for Aviation in an event in Singapore last November.

Terminal 2 of Mactan-Cebu International Airport is expected to be completed in 2018. (WWW.FACEBOOK.COM/MACTANCEBUAIRPORTOFFICIAL)

The award serves as a welcome development in the government’s bid to boost tourism, growth, and infrastructure development in the central Philippines -- an objective supported by the Asian Development Bank (ADB) when it loaned out $75 million for the project in 2015.

The recognition also came on the back of a progressive year for MCIA as new direct international routes were added, including Los Angeles, Taipei, Dubai, Xiamen, as well as additional flights to Singapore.

The expansion and renovation of MCIA’s terminals became the first large scale public-private partnerships (PPP) project awarded by the previous administration that attracted the highest number of bid participants as well as foreign investors. It is part of the Philippine government’s PPP initiative to build and rehabilitate critical infrastructure in the country to ensure sustainable and inclusive growth.

Apart from providing financial assistance to the project, ADB has also been active in giving technical assistance to increase and strengthen the government’s capacity to prepare PPP projects of this scale. This is in line with the Manila-based financial institution’s Sustainable Transport Initiative to highlight private sector participation in transport projects.

Noticeable developments

In an interview with BusinessWorld, Senior Investment Specialist in ADB’s Private Sector Operations Department Christine Genalin C. Uy said that improvements are already noticeable when it comes to the project objectives of providing the country with a world-class airport terminal that the Filipinos would be proud of.

“If you’ve been there [in MCIA] recently, you could see a big difference between what it was before and what it is now,” she said of the 50-year old facility originally built by the United States as an emergency airport for its military that was continually overcapacity over the last few years.

The airport terminal was constructed to handle only 4.5 million passengers a year, however, it was close to servicing seven million passengers before it was bidded out in 2013. This put a strain in the airport infrastructure, affecting service delivery and passenger convenience especially during peak hours. Without this project, the old airport terminal would have limited the growth potential of the region for business and tourism. Once completed, the upgraded terminals can cater to over 12.5 million passengers each year.

The airport terminal operations are currently being done by GMR Megawide Cebu Airport Corporation (GMCAC), the winning private concessionaire, since the turnover in 2014.

Some of the improvements include the enhancement of lighting facilities, introduction of indoor landscaping, and initiation of a number of repair work on the airport terminal’s facade to improve the airport’s ambiance. Check-in areas were also expanded, including the addition of self check-in kiosks, with the departure area reconfigured for better passenger comfort.

Other facilities inside the terminals were also improved including better restrooms as well as improved and expanded retail options for recreation, dining, or shopping. Private nursing stations for traveling mothers and an improved clinic facility are also available. For arriving passengers, an improved taxi bay area is now easily accessible while an indoor fully air-conditioned waiting area has been provided to meters and greeters free of charge.

Further advancements

Apart from the noticeable improvements, Ms. Uy is also looking forward to the completion of a host of work GMCAC is planning to do in the next three years including the completion of Terminal 2 which is estimated to be finished by 2018.

Ms. Uy believes that the MCIA Terminal Project is no less a game changer. An airport terminal is a foreigner’s first contact in the country and therefore creates their first impression about what it is like in the Philippines, she said. “They will either want to leave the country immediately or want to stay on to do business or travel further, so having an effective and efficient airport terminal is essential.”

The MCIA is the gateway to central and southern Philippines. An efficient terminal operation will allow the seamless movement of people and goods to and from central Philippines, stimulating the region’s growth.

The successful implementation of the project will also help facilitate further private sector investment in the government’s PPP program, showing that PPP projects of this scale is possible and can be impactful. “If this airport terminal project is successful, then it can be replicated throughout the country and possibly the (Asia-Pacific) region,” she said.

The project is being developed under a 25-year concession agreement for the construction and operation of both terminals.

Apart from ADB’s $75 million loan to GMCAC to assist MCIA’s rehabilitation and expansion, the funding for the project also includes a debt of P20 billion ($450 million) from a consortium of Philippine banks made up of BDO Unibank, Inc., Bank of the Philippine Islands, Development Bank of the Philippines, Land Bank of the Philippines, Metropolitan Bank & Trust Company, and Philippine National Bank.

Ms. Uy noted that ADB’s role in the project reflects its commitment in helping the government build infrastructure that is vital in promoting economic development.

“In order to ensure sustainable growth, we need to address one of the problems of the country, which is the lack of infrastructure. We agree with the administration that the government alone cannot build the infrastructure needed by the country and operate them. The government needs to bring in the private sector to fast track the roll-out of infrastructure. The private sector can provide financing as well as the technical expertise to build and operate them cost effectively,” she explained.