Vanuatu’s method of choosing PPP partnersPosted: June 9, 2014
Fiji and PNG both extending int’l airports, but by public tender.
The two biggest independent Melanesian countries are both entering into contracts for extension and improvement to their international airports. They both see the need for a Public – Private – Partnership (PPP). However, unlike the former government of Vanuatu, they are intending this to be achieved by calling for tenders to bring experienced operators in. They are advertising for bids from leading advisers worldwide with the intention of choosing the most competent.
The Fiji Government has been the most recent to advertise, about 2 months ago. Nadi Airport averages 30 international flights per day and 20 airlines connect Fiji to 14 international cities. Nadi handles over 90% of Fiji’s aviation needs. However, Nausori, serving the capital, was also needing upgrading.
An increase in efficiency, productivity and profitability for government at each Fiji airport is sought. Successful tenderers would have to show they would apply internationally accepted and certified airport management practices and technology. Furthermore, preference was to be given to a publicly listed company and / or manager of at least one major international airport hub. The successful tenderer would also have to demonstrate financial capacity.
In Vanuatu the whole process was undertaken in secrecy and without any global call for expressions of interest. This led to investors interested in tobacco growing originally being contracted for the work and the employment of a company which the Government of the Maldive Islands in the Indian Ocean was suing. The secrecy scheme also required huge government guarantees of an order Vanuatu cannot afford.
The PNG Government was also seeking a PPP arrangement, but was not prepared to accept any Tom, Dick or Harry to own and run the airport for 50 years as the Vanuatu Government at the time was allowing. Unlike in Vanuatu with AVL, in PNG no-one saw any need to replace the PNG National Airports Corporation (NAC). Indeed the NAC saw the need for greater capacity, to increase from handling 300,000 passengers a year to 1.5 million. Bigger and better facilities were accepted to be necessary to cope with both the 2015 Pacific Games and the 2018 APEC Summit. Their PPP arrangement was to be with the ANZ Banking Corporation, and through a commercial loan, and the Canadian company Jacobs Consultancy had already established a master plan two years ago for the operations of the two (international and domestic) terminals whilst expansion work was going on.
The PNG Government and NAC are certainly not selling, buying or leasing any new land for the developments they have in mind. Vanuatu, on the other hand, has seen a need to acquire or lease a particular stretch of land without there being any professional aviation planning advice sought. Nor was any market research ever undertaken, nor any dialogue begun with land owners and lessees.
NAC is presently recruiting an independent Strategic Advisor to look at the long-term development and operating model for Port Moresby which will see domestic and international airports joined under a potential PPP scheme. Applications are expected at the latest by this weekend. However, the NAC’s Joseph Tupiri (Managing Director) says: "We are going to engage an internationally reputable Strategic Adviser with sell-side experience to carry out market sounding for reputable companies that would finance, develop and operate airports under a Public – Private – Partnership model." Now that certainly never happened for Vanuatu’s airport advancement as proposed by the Carcasses Government in 2013.
One wonders how the process for reporting by the Ad Hoc Committee examining the Rentabau Airport Project is progressing and whether there are still plans for a 13 June sitting of Parliament to learn what has been kept secret.