Transaction of M&O of Panglao Airport

Bohol needs a better airport
To promote tourism and economic growth, the government of the Philippines decided to build a new greenfield airport in the province of Bohol and subsequently hand over its operations and maintenance to a private partner. The airport is to be concessioned to an experienced airport management company by putting it in charge of running the facility and boosting traffic and commercial efficiency – while providing high quality services to passengers. Rebel and IMG were asked to structure an appropriate delivery model, based on the principles of PPP, for the operation/maintenance and commercial development of the airport.

Rebel thrives in PPP culture of Philippines
The culture of Rebel is to support governments in finding the right PPP models and approaches, and to be instrumental in developing best practices which will hopefully become the new standard in the country. From our other engagements in the Philippines, we know that it is one of the more advanced countries in the region with regards to improvement of its infrastructure through PPP. It has shown robust commitment to its PPP program and a willingness to change and embark on modernization of its infrastructure as the key to long term growth and stability. This is the type of context where we work best.

Hybrid structure combining BOT and O&M features
Our approach to this project was to avoiding standard textbook solutions. The critical challenge was to meet the quality and availability objectives of the government, while using a PPP model to transfer significant risk to the private partner. However the facility is to be built by the government and handed over to the operator, while most airport PPPs integrate construction and O&M responsibilities. We developed a hybrid structure combining standard BOT and pure O&M features into an “enhanced” O&M solution. This enhanced solution meets two key requirements of the government. It encourages the operator to invest in the longer-term capacity of the facility and to actively link up with businesses in the tourism sector. This will maximally boost commercial traffic as the success for this newly built airport.

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