Coronavirus poses fresh roadblock to NAIA upgrade
MANILA, Philippines — A planned upgrade of the aging Ninoy Aquino International Airport (NAIA) faced a fresh setback on Tuesday after the government refused proposed tweaks offered by builders to make the project viable in a post-pandemic scenario.
Expecting a “lasting” impact on travel from the coronavirus outbreak, the six-member NAIA Consortium submitted revised plans on how to refurbish Manila’s main gateway, but the Duterte administration rejected the changes.
The group did not provide details of the changes, but said the revised plan was meant “to ensure that the NAIA Project will be viable” under a scenario where resumption of travel remained uncertain and tourism is likely to lag behind.
“The far-reaching and long lasting consequences of the coronavirus pandemic on airline travel, airline operations and airport passenger traffic necessitated a review of the assumptions…,” the consortium said.
The financial set-up of the NAIA Project is unclear, but typically in an airport project, the private concessionaire secures all or part of revenues from operating an airport. These earnings come from various sources such as rental fees from establishments and even passenger fees from using the airport.
Before the pandemic struck, the original plan for NAIA was clear. The consortium proposed a P102-billion reform plan that will transform the infamous airport into a regional hub like Singapore’s Changi Airport, primarily by increasing its passenger capacity. But COVID-19 changed that with travel restrictions likely to stay for the time being, and now financial changes are needed “to ensure the bankability of the NAIA Project.”
“Unfortunately, the government indicated that it is not willing to accept most of the consortium's proposed options and the consortium can only move forward with the NAIA Project under the options it has proposed,” the group said.
Sought for comment, the Department of Transportation said proposals were submitted to the National Economic and Development Authority (NEDA), not to its office. Acting NEDA chief Karl Kendrick Chua has not responded to request for comment as of this posting.
Either way, Transport Undersecretary Ruben Reinoso said both NEDA and DOTr do not have the power to reconfigure the project.
“Consortium wrote to NEDA and not to DOTr to change terms of agreement already approved by ICC (investment coordinating committee) and NEDA Board,” Reinoso said in a message relayed by Transport Assistant Secretary Goddes Hope Libiran.
“DOTr and MIAA cannot just change what was approved by ICC & NEDA Board as approving body under the law,” he added. The NEDA Board is a Cabinet-level body chaired by President Rodrigo Duterte.
The NAIA project is an unsolicited proposal from six local conglomerates that formed an alliance to fix the country’s dilapidated airport. The plan was submitted in February 2018 and secured the approval of the NEDA Board chaired last November.
The gap period between submission and approval marked numerous delays for the project, including real property tax treatment as well as potential layoffs faced by current airport employees once the consortium takes over.
Since Pangilinan-led Metro Pacific Investments Corp. backed out from the consortium, the remaining six members have pushed forward with the plan. They are Aboitiz InfraCapital, AC Infrastructure Holdings Corp., Alliance Global Group Inc., Asia’s Emerging Dragon Corp., Gotianun-owned Filinvest Development Corp., and Gokongwei-led JG Summit Holdings Inc.
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