Foreign business groups eye NAIA 3 opening

International airlines serving the Philippines, the community of foreign businessmen in the country and the Philippine Association of Travel Agencies, said the $440 million loan for the new international airport will expedite the completion of the project, adding that the opening of NAIA 3 would further enhance tourism and foreign investments in the country.

Sources said collateral benefits derived from the project would include dollar inflow from foreign investors and lenders of the $440 million loan. They said that during commercial operations, additional foreign exchange inflows will be generated from approximately 6,500,000 passengers who would spend $650 million at an average of $100 per arriving passenger.

At the same time, local investors are eyeing the development of the project as a channel for complementary development of the site itself as well as adjacent areas, geared towards providing a broader range of amenities for international travelers and the general public such as hotels, offices, rental facilities and conference facilities.

At present, the employment opportunities that will be generated from this project are estimated to be 10,000 (direct labor, 6,000; indirect labor, 4,000) during construction and up to 12,500 persons (direct labor, 2,500; indirect labor, 10,000) during operations.

Although the project is still in the construction stage, the concessionaire Philippine International Air Terminal Co. Inc. (Piatco) has complied with its obligation to pay the government the annual guaranteed payment of P300 million for pre-operating years one and two amounting to P600 million. These guaranteed payments will escalate to P510 million on its first and second year of operations, P610 million on the third and fourth year, and P710 million annually from the fifth to the 25th year of the agreement. In addition, the government is assured of its share in the gross revenues from receipts of the concessionaire which will be five percent for the five years of operation, 7.5 percent from the sixth to the 15th year and will level off at 10 percent from the 16th to the 25th year of operations.

Critics had charged that the financial analysis shows that the government will not only get a disadvantageous share but would stand to lose under the concession agreement. However, a Piatco official belied this claim stating that, "the share of the government in the terminal revenues for out-bound international passengers, which is 36 percent similar to what it received when NAIA was being operated by MIAA, which gets 64 percent was reinstated in agreement with Piatco." The aforesaid share of the government is ably protected against depreciation of the peso against the dollar. Considering the fact that the peso has depreciated against the dollar since the onset of the Asian crisis in 1997.

The construction of the new international airport with an estimated cost of $500 million is headed by a consortium of Philippine companies (Piatco), that has a 60-percent stake in the project. Flughafen/Main AG, (Frankfurt Airport Services Worldwide) owns 30 percent while the remaining 10 percent is held by Nissho lwai Corp. of Japan.

NAIA 3 is the biggest project for the German company, outside of Germany and is the single largest infrastructure project in Asia to date.

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