CDO PH’s No. 2 in Infrastructure Competitiveness

Aug 30, 2014



CAGAYAN DE ORO CITY – One of the major factors which pulled up Cagayan de Oro City to No.2 in the latest overall competitiveness rankings of cities around the country was its infrastructure competitiveness.


The City of Golden Friendship ranked second only to Davao City, and was followed by the Metro Manila City of Marikina.


CDO No. 2 in Infra Competitiveness USAID INVEST Photo


Infrastructure scores were based on data on existing road network, distance from city/municipality center to major ports, Department of Tourism-accredited accommodations, health infrastructure, education infrastructure, basic utilities, infrastructure investments, ICT connection, ATMs, and public transportation.


The latest road inventory from the City Engineer’s Office shows Cagayan de Oro City with a total road network of 220 kilometers, 54 percent of which are concrete paved, 43 percent gravel, and the rest earth/asphalt roads. Some 75% of the roads were reported in good condition and the rest in fair condition.


Although it is some 40 kilometers from the Laguindingan Airport, access has been improved by the ongoing expansion of the Iligan-Cagayan-Butuan Road (ICBR) portion going to the airport from four to six lanes. Two alternate routes have also been opened.


Significant increases in public transport vehicles also improved access to key destinations such as the airport, seaports and bus terminals. The number of passenger vans for hire rose 43%, buses by 35%, taxis by 13% and jeepneys 11% from a year ago, no doubt sparked in no small measure by the opening of the Laguindingan Airport and increasing tourist traffic to points outside the region such as the Dahilayan Adventure Park in nearby Manolo Fortich, Bukidnon.


The recent release of the 2013 Gross Regional Domestic Product (GRDP) figures by the National Statistics Coordination Board (NSCB) of the Philippine Statistics Authority show a deceleration in construction from 8.7 percent in 2011-12 to 5.7 in 2012-2013 but this is expected to rebound in a big way when big ticket infrastructure projects come online in the next three years.


A significant impact is expected in the short term from four power generation projects in the region totalling P100.364-billion that would deliver 1,221 MW to the Mindanao Grid when all completed by 2018.


FDC Misamis Corporation’s PhP 30-billion 405 megawatt (MW) coal-fired power plant expected to start operations in mid-2016; the PhP 50-billion 552-MW coal fired power plant of GN Power, AC Energy Holdings and Power Partners in Kauswagan, Lanao del Norte projected to start operating in early 2017; the P1.35-billion 165-MW Minergy Coal Corp. coal-fired power plant in Balingasag, Misamis Oriental whose first two units would come online on January and March, 2017, respectively,  and the PhP 19.944-billion Bulanog-Batang hydroelectric power plant of the Northern Mindanao Electric Cooperatives Association (NORMECA) which was just endorsed for approval during the 102nd Full Council Meeting of the Regional Development Council-X (RDC-X) last August 19, 2014.


FDC Misamis Groundbreaking (photo by Ed Montalvan)


Meralco Industrial Engineering Services Corporation (MIESCOR) has commenced work on three projects representing total investments of  PhP 2.2-billion in the Misamis Oriental towns of Tagoloan, Villanueva, Jasaan and Balingasag in the east coast and Opol in the West: the Cagayan Electric Power and Light Company (CEPALCO)138 kV/69 kV Substation in Tagoloan, Misamis Oriental with two (2) 150 MVA power transformers and the Tagoloan-Balingasag 138kV sub-transmission line for Minergy Coal Corporation, another wholly-owned affiliate of CEPALCO which will interconnect the 110MW coal fired power plant of Minergy Coal in Balingasag, Misamis Oriental to the distribution system of CEPALCO.


Unloading materials at site


MIESCOR is also concurrently constructing the transmission line portion of a new substation for the National Grid Corporation of the Philippines (NGCP) in Opol, Misamis Oriental on a four-hectare site along the national highway in Barangay Awang, Opol some 15.5 kilometers west of its Carmen substation.


The two key seaports which drive Cagayan de Oro City’s regional economy are also expanding.


The Philippine Ports Authority has confirmed Pilipinas Shell Petroleum Corp. has started its P6 billion improvement of the Cagayan de Oro Port to guarantee the sufficient flow of fuel within the country by 2016.


Under the plan, Pilipinas Shell will upgrade the port and convert it into an airport-like facility and convert the crane facility into an MR import capable facility.

“This is a welcome development for PPA. [Pilipinas Shell] already made a presentation to the board and we are now just fine-tuning their rental rates and the length of the contract,” PPA general manager Juan Sta. Ana said.


Upon completion of the rehabilitation of the port, Sta. Ana said leases, port dues, and wharf age fees would make a quantum leap to P32 million per year from the present P1.8 million.

“PSPC is looking at Cagayan not just as a support investment, but a major facility as they are planning to bring in import products directly to Cagayan de Oro and distribute it from there as they expect their Batangas production to be short to support the fuel needs of the country by 2016,” he said.


Should the Batangas refinery become inaccessible, Sta. Ana said it would prompt the oil firm to place another hub in Mindanao.


PPA Cagayan de Oro Port Manager Capt. Necitas G. Layola, Jr. (Ret., PA) said Pilipinas Shell is investing another P320 million into improving some parts of the port, installing fire fighting capabilities as well as lighting, berthing, and security systems


Meantime, the Phividec Industrial Authority (PIA) and International Container Terminal Services Inc. (ICTSI) have agreed in principle to extending the berth length of the Mindanao Container Terminal (MCT) in Tagoloan, Misamis Oriental to accommodate larger and longer foreign containerized vessels.


Dante Clarito, Phividec port department manager, said the two sides have agreed in principle for the expansion. Pursuant to and consistent with the provisions of the existing Concession Contract between PIA and ICTSI, particularly on port expansion and development, the latter will pursue and conduct  a feasibility study on how much  investment will be needed for the proposed berth length extension as soon as PIA will give its nod for ICTSI to proceed.


“We have agreed that there’s a need to extend [the port berth length]; that’s the most important part,” Clarito said. In principle, the planned expansion will be implemented by phase extending the berth to 600 meters, which will enable MCT to accommodate vessels as large as 60,000 deadweight tons (DWT).


PIA has allocated about 25 Hectares for the MCT Port Expansion Plan including the backup area for port related businesses such as warehouses for its multi-national and domestic clients.


PIA owns and regulates the MCT, which is part of the 3,000-hectare industrial estate it also oversees. ICTSI is the sole operator of the MCT after it was awarded a 25-year concession in 2008. The current P3.24- billion facility was funded by official development assistance from the Japan Bank for International Cooperation.


The MCT has an annual capacity of 270,000 twenty-foot equivalent units (TEUs). Last year, the port handled 224,539 TEUs, up from the previous year’s 214,746 TEUs.


Not the least, and perhaps in what could be the most significant investment in terms of impacting the growth of the regional economy in the near future, the National Economic and Development Authority (NEDA) is now preparing the guidelines for the bidding for the PhP 14.62-billion ($334.21 million) Public Private Partnership Project for the Laguindingan Airport Operations and Maintenance (O&M) Project.

PPP O&M for Laguindingan Airport

The project involves the O&M of the Laguindingan Airport along with the development of associated infrastructure and facilities, and the installation of all required equipment to meet applicable international standards.


With the large South Korean presence in Cagayan de Oro, the regional Department of Tourism is eyeing flight routes from Busan to Cagayan de Oro via Singapore or a direct route from Busan to Cagayan de Oro to further bolster the tourism industry in the region. The airport is also expected to accommodate night landings finishing the installation of instrument landing systems and other equipments by December 2014


Ayala Land Inc. (ALI) which originally owned 183 of 417 hectares of the land acquired by the government to develop the airport complex, plans to develop an aerotropolis around the airport. This is part of the pre-conditions granted by Civil Aviation Authority of the Philippines for expropriating the lands the government bought from the corporation. Ayala Corporation, the parent company of ALI, has previously indicated its intent to bid for the O&M and expansion PPP project for Laguindingan Airport.




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