PRESIDENT Rodrigo R. Duterte is seeking assurances that San Miguel Corp. (SMC) has the capacity to finance and build the Bulacan International Airport, after the government approved the unsolicited proposal.
The National Economic and Development Authority (NEDA) Board, chaired by Mr. Duterte, approved the P753.63-billion airport proposal on April 25 but required another approval round for the concession agreement.
“This project is a P735-billion project and we must make sure the proponent has the financial and technical capability to carry it out. And a partnership is obviously allowed for that,” Finance Secretary Carlos G. Dominguez III told reporters late Thursday.
“That was what was passed in the minutes and I suppose the Swiss challenge has to go to another review. That is what the ICC (Investment Coordination Committee) recommended and that is what the NEDA Board approved, and they added that… the final concession agreement has to be again approved by the NEDA Board,” he added.
Concerns over the project’s viability arose when the project was still being deliberated under the ICC. Socioeconomic Planning Secretary Ernesto M. Pernia has said that the airport “barely” passed the hurdle rate, which is the rate of return required to exceed the cost of capital.
The project involves the construction, operation, and maintenance of a 2,500-hectare airport in Bulakan, Bulacan, that features an 8.4-kilometer airport toll road that could accommodate 100 million passengers per year.
Since the project is an unsolicited proposal, the bid is subject to a Swiss challenge, under which other firms can submit counter-offers while the original proponent will be given the right to match them.
The Department of Transportation granted original proponent status to SMC in October.
The new airport is intended as an alternative international gateway to the Ninoy Aquino International Airport, as well as the Clark International Airport.
Although the NEDA Board did not provide a timeline for the review of the concession agreement, Mr. Dominguez said that the government hopes to implement the project as soon as possible.
“The President wants all infrastructure projects to be done quickly; he doesn’t discriminate whether it’s this or that, he just wants all the infrastructure to be done quickly because he believes that one of the reasons he was elected, is to make life easier for people and this requires precisely better infrastructure development,” Mr. Dominguez said. — Elijah Joseph C. Tubayan