Southern Luzon International Airport (SLIA) in Daraga, Albay

Outgoing Department of Transportation and Communications Secretary Jose "Ping" de Jesus has assured Albay Governor Joey Salceda that the construction of the Southern Luzon International Airport (SLIA) in Daraga, Albay would be in full steam following the inclusion of the P500 million fund in the DOTC budget next year.

During their meeting last week, Salceda said De Jesus announced that the P500 million earlier slashed by Congress from the P870 million originally proposed in the National Expenditure Program (NEP) for 2011, is being restored in the DOTC 2012 budget upon the request of the Regional Development Council (RDC) and the provincial government of Albay.

At present, the SLIA is working on a P370-million fund involving site development and the construction of concrete road network that would link the airport site to the Maharlika Highway in Daraga.

Bidding documents for the P370-million 2011 budget are now being readied and it would be procured by the DOTC central office, Salceda said.

Salceda said De Jesus assured him that the DOTC has strongly and clearly reiterated that the SLIA in Albay is a national priority of President Benigno S. Aquino III given its impact to Bicol's tourism and the overall economic development of the countryside.

The DOTC believes that an international airport in the Bicol region would place a critical role in tourism, provide easy access for Overseas Filipino Workers (OFWs) and open neighboring markets that would boost the region's economy.

Data from the SLIA feasibility study indicate that tourism in the last four years (1997-2000) in Bicol had posted 1.2 million visitors (foreign – 65,016; domestic – 1.1 million and OFWs with 20,066). The figure constituted about four percent of the total number of tourist arrivals in the Philippines, and about two percent of the total foreign visitors in the country.

The DOTC said the SLIA in Albay would be an alternate gateway given the congested traffic in existing international airports in Metro Manila.

As for the travel demand market, Salceda said Bicol alone has 5.4 million people and Samar provinces with 1.65 million for a total market of 7.1 million.

"If we were a country, we would be as big as Hong Kong and Tajikistan, slightly smaller than Switzerland, Israel, Honduras and Bulgaria and certainly bigger than Libya, Finland, Singapore, Nicaragua, Laos, New Zealand, Costa Rica, Ireland," Salceda said.

The DOTC technical study concluded that Daraga is the most suitable location for an international airport in Bicol given its "wind conditions" conducive year-round to air transportation unlike other newly proposed sites.

Considering the sheer lack of financial resources of the government, a new strategy has evolve this is by way of build and privatize, popularly known as "public-private"" partnership.

Under the public-private partnership (PPP), the government will essentially build the airport but its terminal construction and airport operation will be bid out under the Build-Operate-Transfer (BOT) scheme.

Salceda said, this strategy reduces the financial cash out and reduces the construction period of the investor, thus making it more attractive to potential investors.

The BOT format that will be presented for international competitive bidding is also being accelerated. The budget of about P10 million for the BOT feasibility study will be funded by the P300 million PPP FS budget of the BOT Center.

He said the DOTC is in the process to studying a proposal to "bundle the privatization of the Old Legazpi Airport with the BOT for the Southern Luzon International Airport". This will give an incentive to the BOT investor to accelerate the SLIA construction so it can immediately access the land of the Old Legazpi national airport.

The Legazpi airport has the best locational advantage in terms of commercial potential since it is right at the center of existing commercial and residential development, Salceda said.

The PPP scheme would allow private investors to develop the old Legazpi airport into an "integrated resort" much like Sentosa in Singapore which can easily create new business opportunities and incremental jobs.

For the local government of Legazpi and Daraga, the PPP scheme would also mean a bonanza in real property taxes since both will now be operated by private firms with Legazpi City's 75 hectares in the Old Legazpi National Airport to get P56 million in tax revenue while Daraga's 140 hectares in the SLIA at some P14 million.