THE measure granting a 50-year franchise for the San Miguel Aerocity, Inc. to construct and operate the Bulacan airport and “airport city” has been approved on second reading at the Senate.
The chamber on Monday evening approved the franchise bill, which adopted House Bill No. 7507, for the operation of a new domestic and international airport, seen to decongest the Ninoy Aquino International Airport.
The passage was pushed to allow the chamber to have it passed on third reading by next week ahead of the Oct. 17-Nov. 15 session suspension.
“Let’s get this off the plate already, this San Miguel Aerocity because this is time bound,” Senate Majority Leader Juan Miguel F. Zubiri said in Monday’s session.
“We would like to be able to finish this before the session ends next week and if we don’t pass it this week, obviously the third reading would be difficult by next week.”
The proposed P1.5-trillion Bulacan airport and a so-called airport city are expected to accommodate 100 million passengers annually. San Miguel Aerocity will also build an expressway that will link it to North Luzon Expressway and a rail link through Metro Rail Transit-7.
The 50-year franchise is inclusive of a 10-year maximum period for the design, planning and construction of the airport and airport city. It will also exempt the grantee from direct and indirect taxes during the 10-year construction period.
The Action for Economic Reforms, however, opposed the tax exemption, arguing that it will set a precedent for other companies to ask for the same exemptions as well as undermine the incentives pushed under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.
The grantee will also be entitled to a revenue share worth 12% of the internal rate of return (IRR) annually, upon determination by a competent authority that San Miguel Aerocity has recovered the investment cost. Amount in excess of the 12% IRR will be remitted to the government.
Senator Grace S. Poe-Llamanzares described the franchise as a “unique agreement,” noting the incentives granted were considered based on the risks of such an investment.
“This is a very unique agreement. If there’s anybody who’s willing to put out the same amount of risks or even more, then it is upon us to grant the same agreement or incentives, if not better,” Ms. Llamanzares said.
Further, the bill provided the franchise may be revoked should San Miguel Aerocity fail to start construction within one year or start operation within one year after securing a permit from the Civil Aviation Authority of the Philippines.
Other conditions for revocation are the failure to start operating within 12 years from the enactment and the failure to continuously operate for two years. — Charmaine A. Tadalan
