My first trip out of the country in the late 1970s was out of the old Manila International Airport, which sat at the site currently occupied by what is now known as NAIA Terminal 2. My second trip in the early 1980s was out of what is now known as NAIA Terminal 1. Since then, succeeding international trips were out of either NAIA Terminals 1, 2, or 3.
My travels in the last 45 years have allowed me to witness first-hand the many changes and developments in air travel locally and abroad. But I am, by no means, an expert on airline and airport operations. However, I would like to believe that as a frequent traveler, I am in some position to rate whether an airport is efficient, comfortable, safe, and convenient. NAIA, despite all the government’s efforts to date, is far from being such.
This is unsurprising considering that NAIA’s Runway 06/24 and taxiways are 69 years old, while its Terminal 1 is 42 years old. The control tower is also around 60 years old. Terminal 3, the newest terminal, was opened 15 years ago. Runway 13/31 is even older than 06/24, having been part of Nichols Airfield since World War II.
The original airport started operations in 1935 in Grace Park in Caloocan. In 1937, Nielson Airport opened in Makati, with what is now Ayala Avenue and Paseo De Roxas as parts of its runways. Nielson was closed in 1948, after the war, and airport operations were moved to a site adjacent to Nichols Air Base (now Villamor) and made use of the base runway (13/31).
A longer international runway (06/24) was built in 1954, while the construction of a control tower and international terminal did not start until 1956. The international terminal was opened in 1961 but was closed after a fire in 1972. A smaller terminal was built beside it, and this was used until Terminal 1 was opened in 1981. Terminal 2 was built in the 1990s.
So, when Terminal 3 partially opened 15 years ago, I deemed it a welcome relief. With three international terminals in operation, the experience of flying in and out of NAIA improved significantly. That was in 2008, when the airport was running relatively smoothly and flights delays were minimized.
Nowadays, the airport terminals have become congested and uncomfortable once more. Lots of flight delays have also been reported, in part due to aircraft maintenance issues, also the fact that NAIA has only two runways, leading to long lines of aircraft waiting to take off or land. The airport had suffered power and communication outages as well.
It is obvious that NAIA is operating beyond capacity and is in desperate need of expansion and modernization. I used to think that rehabilitation would do little to improve capacity unless new runways were added. But I have been recently made to believe that even with just two runways, NAIA can still be made efficient and comfortable with some changes.
The thing is, NAIA’s planned rehabilitation appears to have been in limbo for the last five years. Five years have gone by — with the COVID-19 pandemic happening in between — and NAIA continues to degrade as it waits for the government to implement a much-needed upgrade. A timeline prepared by CNN Philippines showed that a modernization proposal was first submitted in 2018.
In a report, CNN Philippines noted that in 2018 a consortium formally submitted to the Department of Transportation an “unsolicited” proposal to rehabilitate NAIA. The consortium was 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.
Around the same time, interest in the rehabilitation project was also expressed by San Miguel Corp., which has since been given the go-ahead to build a new international airport in Bulacan; and the pair of Megawide Construction Corp. and India-based GMR Infrastructure (Megawide-GMR), which undertook the rehabilitation of the Clark International Airport and the Mactan-Cebu International Airport.
In late 2019, the National Economic and Development Authority (NEDA) Board approved the NAIA rehabilitation plan, but scaled down the project from P350 billion with a 35-year concession period, to P102 billion under a 15-year deal. In 2020, San Miguel Corp. and Philippine Airport Ground Support Solutions, Inc. also reportedly offered to undertake the NAIA project.
To date, four years since the NEDA Board approval, the Department of Transportation is still to implement NAIA’s rehabilitation plan. In June, the “new” Manila International Airport Consortium (MIAC) officially submitted to Transport officials an updated unsolicited proposal for NAIA’s redevelopment. It offered to invest P267 billion over a 25-year concession period.
MIAC is composed of Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corp., Asia’s Emerging Dragon Corp., Alliance Global-Infracorp Development, Inc., Filinvest Development Corp., and JG Summit Infrastructure Holdings Corp. From the original group of seven in 2018, Metro Pacific Investments Corp. opted out. Meantime, Global Infrastructure Partners (GIP), an airport operator in the UK, came in as MIAC’s technical partner.
In June, MIAC went all-out in publicly announcing their offer to the government to upgrade NAIA. It proposed to increase NAIA’s capacity to 54 million passengers per annum by 2025, from 32 million at present, and to address queuing and bottlenecks. Capacity will be raised to 62.5 million passengers by 2028 by increasing terminal floor area, adding airfield facilities, and improving cross-terminal transportation.
Passenger capacity will be further raised to 70 million passengers by 2048 by further expanding terminal space and airfield capacity. Over 25 years, MIAC will make P211 billion in capital investments, with P57 billion to be invested in the first five years of the proposed 25-year concession period. There will also be a P57-billion concession fee to paid upfront to the government.
I guess MIAC thought that by publicly announcing its unsolicited offer, it could gain wider public support for its proposal. And that maybe Transport officials could be swayed by public opinion to quickly act on the matter. I do not blame MIAC for being zealous. After all, it has been offering to fix NAIA since 2018, and the airport urgently needs upgrading, but nothing has been happening.
Round 2 for MIAC does not look any better than Round 1. Two months have passed since it submitted its unsolicited proposal, and Transport officials have been relatively quiet on the proposal’s prospects. One issue is the concession period, with MIAC asking for 25 years vs the government offer of 15 years. Moreover, the government appears to now prefer to bid out the project.
MIAC’s proposal was “unsolicited” and was not sought by the government. And while MIAC can always resubmit its proposal as a solicited bid, to date it does not seem like the Transport department has published a call for bids. In short, the government is still to start the official process of soliciting bids for the NAIA project.
In this line, MIAC may have shown its cards too early by making public its revised unsolicited proposal in June. It may have revealed too much to other prospective bidders for the project. On the other hand, what is more important are the terms of reference for the bidding. MIAC’s proposal may have to substantially change anyway to comply with the government’s terms. Anything made public to date may just be immaterial.
Unfortunately for the suffering public, a pushback is expected. With the solicitation route, it will maybe take another 12 to 24 months before the project gets awarded, and then perhaps an additional 12 to 24 months before any work starts. In short, improved service may not be expected until 2028, at the earliest. Five years have gone by since 2018, and we are back at square one.
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council