Gov’t gets P350-B offer for NAIA rehab

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By Arra B. Francia

A CONSORTIUM composed of some of the country’s biggest conglomerates has submitted to the government a P350-billion unsolicited proposal for the rehabilitation, operation and maintenance of the Ninoy Aquino International Airport (NAIA).

Members of the consortium — consisting of Aboitiz Equity Ventures, Inc.s’ (AEV) Aboitiz InfraCapital, Inc.; Ayala Corp.’s AC Infrastructure Holdings Corp.; Filinvest Development Corp. (FDC); JG Summit Holdings, Inc.; Alliance Global Group, Inc.; Metro Pacific Investments Corp. (MPIC) and Asia’s Emerging Dragon Corp. — said in a briefing on Tuesday that they submitted the proposal to the Department of Transportation on Feb. 12.

Members of the consortium — with combined capitalization of P2.2 trillion — on Tuesday signed a memorandum of agreement formalizing their partnership.

Stock prices of AEV, Ayala, FDC and JG Summit ended up 2.71% to P73.95 apiece; 2.0% to P1,020; 0.93% to P7.57 and by 2.60% to P74.90, respectively; while those of Alliance Global and of Metro Pacific retreated by 0.52% to close P15.30 each and by 0.81% to P6.13, respectively.

NAIA accommodated over 39.5 million passengers in 2016, compared to its 30.5 million designed capacity and the consortium said in a statement last December that the country’s premier air gateway “can easily accommodate an additional 11 million passengers annually from the current 39.5M passengers and can increase hourly aircraft movements from 40 movements per hour to 48 movements per hour.”

The first of the project’s two phases will involve improvement and expansion of existing terminals. Around P100 billion will be spent for the initial phase, which would double the airport’s capacity to around 65 million passengers per year, against its current capacity of 30.5 million.

“Many changes can happen within the current terminals. We can improve passenger flow, to improve the passenger experience and… add a significant amount of square meters,” NAIA consortium spokesperson Jose Emmanuel P. Reverente told reporters after a press conference at The Manila Peninsula in Makati City on Tuesday.

Mr. Reverente said the preliminary plan is to add about 250,000 sq.m. A people mover will also be installed to link the upgraded facility to existing mass transport systems.

“We will work with mass transit companies to provide connections to NAIA. It could be to LRT (Light Rail Transit) 1 or MRT (Metro Rail Transit) 3,” said Mr. Reverente, who is also vice-president of Aboitiz InfraCapital.

The consortium will build an additional runway, taxiways, passenger terminals, and associated support infrastructure for the second phase of the project.

“We expect that phase one can be completed in 48 months, while phase 2 will be under consultation with the government as to when capacity upgrades are necessary,” Mr. Reverente said.

Completion of the second phase will further increase capacity to 100 million passengers.

The consortium has tapped airport operator Changi Airports International Pte. Ltd as technical partner for rehabilitation work. “Changi is really the top-notch operator in our region, Changi is rated the number one airport in the world, so it made perfect sense for us to work with them to further enhance and upgrade our country’s premier gateway,” Mr. Reverente said.

The concession period will run for 35 years, after which the consortium will transfer control to the government at no cost. The project is estimated to cost up to P350 billion over the concession period.

With the expansion, Mr. Reverente said there might be an increase in terminal fees in the future. “There will be more terminals, obviously. So there may be a requirement for some increase, but we will work with government to make sure they are affordable,” he said.

Mr. Reverente said the consortium was formed after a meeting of top businessmen with officials headed by Jose Maria A. Concepcion III, acting as presidential adviser for entreperneurship, in the second half of 2017. “Joey Concepcion basically brought the government and private sector together and said, ‘How can we help solve the country’s economic issues’ and the improvement of NAIA came out as one of the top opportunities,” he said.

The structure of the consortium is equally split among the conglomerates, giving each member a one-seventh share in the project. Mr. Reverente noted the funds for the project will be financed through a combination of debt and equity, with equity contribution to be shared equally.

Another group, led by Megawide Construction Corp. and the Social Security System is set to submit a separate unsolicited proposal for NAIA’s rehabilitation. In a statement, the group expressed willingness to push through with the submission of a proposal. “Megawide GMR intends to participate in the development and rehabilitation of Philippine airports and this still includes NAIA. The government and the people now have the choice between a number of airport proposals and which ones offer the best value. This kind of competition is healthy for the infrastructure sector,” Megawide Corporate Information Officer Manuel Louie B. Ferrer said in the statement.

Megawide is also building a new P9.36-billion terminal at Clark International Airport in Pampanga that will double its capacity to 8 million passengers a year.

San Miguel Corp. has submitted an unsolicited proposal to build, operate and maintain a P700-billion four-runway airport in Bulacan with annual capacity for 200 million passengers.