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NAIA rehab revised concession agreement expected this week

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Ninoy Aquino International Airport (NAIA)

THE Department of Transportation (DoTr) expects to receive this week the revised concession terms for the proposal to rehabilitate the Ninoy Aquino International Airport (NAIA) from the consortium of seven conglomerates.

Transportation Secretary Arthur P. Tugade said the group committed to be ready with its revised concession terms in the next few days after the project received conditional approval from the Investment Coordination Committee (ICC) of the National Economic and Development Authority (NEDA) on Sept. 27.

“Basically there was an agreement on MAGA (material adverse government action), on who shall do the price determination, rate determination. And also, we agreed on what kind of improvements they will introduce into the proposal. Such introduction shall be contained in the draft of the concession agreement, which they agreed to submit early next week,” Mr. Tugade told reporters last week.

The NAIA consortium is composed of Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc.; and Metro Pacific Investments Corp.

Transportation Undersecretary for Planning Ruben S. Reinoso, Jr. said the NEDA-ICC wanted adjustments to the concession terms pertaining to MAGA and increasing the passenger service charge.

MAGA ensures government will compensate the private sector in case of untoward incidents in the course of the project. Mr. Reinoso said the NEDA-ICC wanted MAGA to be limited to actions of the executive branch; meaning if there are future policies or actions initiated by the local government, judiciary and legislature that would affect NAIA, the burden would not be carried by the government.




Another issue is the commitment to increase the passenger service charge at the airport, also called the terminal fee, once the proponent has completed the first phase of the project. Mr. Reinoso said the NEDA-ICC questioned this provision and wanted the consortium to be allowed to file applications with the airport regulator to increase any fees.

“It’s in the concession agreement that they will only implement the subsequent phase (of the project) after the approval of increase (in terminal fee). In effect, it’s a guarantee on the part of the government. We said we do not want any guarantee,” Mr. Reinoso said in a mix of English and Filipino.

If the consortium succeeds in submitting the new concession terms this week, and the DoTr finds it compliant with the requirements of the NEDA-ICC, the project may then be elevated to the NEDA Board chaired by President Rodrigo R. Duterte for final approval before starting the Swiss challenge.

The Swiss challenge is the competitive process where companies are invited to submit counterproposals to a project which the original proponent may match. If the consortium wins the Swiss challenge, it will automatically be awarded the project.

“We are thinking of having it approved with finality before the end of the year including Swiss challenge,” Mr. Tugade said.

The consortium is investing P102 billion to take over the operations of NAIA for a 15-year period and expand its capacity to handle 47 million passengers a year in the first two years and 65 million after four years.

The Manila gateway has long been operating beyond its 30.5-million passenger capacity, recording 45.3 million passengers last year, 42 million in 2017 and 39.5 million in 2016. — Denise A. Valdez

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