The NAIA endgame

(Conclusion)

MANILA, Philippines —Tycoons are scrambling to get the chance to redevelop the Ninoy Aquino International Airport (NAIA), the country’s main gateway, but none of them has succeeded so far.

With so much interest on NAIA, one would think the congested gateway should have greatly improved by now, meeting its potential to be a world-class gateway, at least until a new alternative is built.

When President Duterte became president, the tycoons thought NAIA’s redevelopment would finally happen.

Super consortium

One fine day in 2017, three of the country’s business tycoons met in one of the private rooms of the sprawling members-only Manila Golf & Country Club in Makati, the playground of the rich and famous, to discuss the bold idea of banding together to redevelop NAIA.

Two of the three tycoons in that meeting are part of an airline business, a sector that would surely benefit from a more developed NAIA. The third tycoon chairs a conglomerate that spans a wide array of businesses including hotels, another industry that would benefit from an efficient gateway.

It was in that meeting where the idea of a super consortium of seven conglomerates was born – Metro Pacific Investments Corp., Aboitiz InfraCapital, Ayala’s AC Infrastructure Holdings Corp., Andrew Tan’s Alliance Global Group Inc., Lucio Tan’s Asia’s Emerging Dragon Corp., Gotianun-led Filinvest Development Corp. and JG Summit Holdings Inc. of the Gokongwei family.

Formally called the NAIA Consortium, the group then submitted in 2018 an unsolicited proposal to upgrade NAIA. It proposed to invest P102 billion for a 15-year concession period to operate and redevelop NAIA, with an option to build a third runway.

It was a powerhouse cast that gathered the richest, most powerful and most business- savvy titans in the country, no doubt a credible group.

They pooled their resources, including brilliant executives, to get ahead of the race.

In fact, to ensure that they would, indeed, be given the original proponent status (OPS), their team flew to the Department of Transportation’s office in Clark, Pampanga using Lucio Tan’s private helicopter to submit their proposal.

It worked, indeed, because they were given the OPS.

Two years later, however, when COVID-19 struck, the group withdrew its proposal.

Members wanted a longer recovery period for their investment in view of the negative impact of COVID-19 on air travel to ensure the bankability of the massive airport infrastructure project.

The consortium was looking for some form of guarantee to help it get bank financing for the project, but the government did not grant its request.

Megawide

When the NAIA Consortium threw in the towel, one of Duterte’s Cabinet members told Megawide to submit its own unsolicited proposal to redevelop NAIA.

In less than a month, Megawide was able to come up with a new proposal for NAIA, and in July last year was granted the OPS. Its proposal did not include a plan to build a new runway, but instead proposed engineering solutions to ease airport congestion.

But Megawide would not be able to pop the champagne bottles as it soon found itself at the receiving end of attacks on its credibility to undertake a massive project like NAIA.

On Dec. 4, the Manila International Airport Authority (MIAA) revoked Megawide’s OPS. Megawide has filed a Motion for Reconsideration, a decision on which remains pending as of this writing.

Jeffrey Cheng

The third in line after the NAIA Consortium and Megawide is Philippine Airport Ground Support Solutions Inc. (PAGSS), led by businessman Jeffrey Cheng, who was also part of the Philippine International Airport Terminal Co. Inc. (PIATCO) consortium that bagged the controversial NAIA Terminal 3 project in 1997.

Government sources said PAGGS proposal is still unopened until the MIAA considers it.

At present, PAGSS has a major footprint in the crucial aviation ground services business. It caters to the country’s major airlines.

Ramon Ang

Days after MIAA revoked Megawide’s OPS, sources told The STAR that Ramon Ang-led San Miguel Corp. (SMC) submitted a proposal to operate and maintain NAIA.

Ang, who is building a P740-billion airport in Bulacan, wanted a 10-year concession to operate NAIA “efficiently and safely for the Filipino people” while his planned Bulacan Airport is not yet in place.

But Ang stressed that it is Cheng’s proposal that will be reviewed next and not his.

“It is Cheng who is next in line, not us,” Ang told The STAR.

He also said SMC simply wants the O&M contract to ensure that NAIA operates better and more efficiently until his Bulacan airport, is completed.

“Our interest in NAIA does not intend to replicate what Megawide had in mind for NAIA,” Ang said.

After the 10-year period, Ang said, it would be best to develop NAIA into a mixed use property similar to Bonifacio Global City in Taguig. He said the government can earn as much as P2 trillion from NAIA when developed for various purposes.

In all, Ang believes that NAIA is already too congested and there is no room to build a third runway. Its surrounding areas are also already too dense and that there is danger for nearby residents to continue living near an airport.

This is not the first time SMC set its eyes on NAIA.  In 2011, SMC said it was willing to participate in the privatization of NAIA Terminal 3 if the government conducts a public bidding.

The MIAA and its parent DOTR have yet to decide on Megawide’s Motion for Reconsideration, Cheng’s proposal and Ang’s O&M plan.

There is another possibility that a fifth proponent, also a tycoon -- who will either form a partnership with a foreign player or a new consortium of local players -- will come into the picture and submit his own offer, industry sources told The STAR.

Attacks against Megawide

Many in the business grapevine are wondering who among the other potential proponents of NAIA was behind the attacks against Megawide.

Days after Megawide’s OPS was revoked, one of the tycoons interested in NAIA, invited Megawide chairman Edgar Saavedra and managing director for transport Louie Ferrer to his office.

On a long table and in between makeshift plastic barriers to prevent the spread of COVID-19, the tycoon, on one side of the table and Saavedra and Ferrer, on the other, discussed the NAIA project.  The tycoon, in a seemingly gesture of good faith, clarified he was not behind the issues raised against the construction company.

Vested interests

The controversies surrounding every NAIA upgrade proposals show that there are always vested interests that get in the way.

The process is certainly long and far from simple and unless the Duterte government moves faster, sources said the window to jumpstart any upgrade on NAIA under this administration -- which only has until 2022, is closing fast.

One aviation expert observed:  “Any administration has the power to make a change or to build and leave a legacy. It only has a limited time, so it should not waste this opportunity. People in government need to think of the future generations of Filipinos not just their own interests.”

Masterfully designed by National Artist for Architecture Leandro Locsin, NAIA has the potential to be one of the world’s best airports, but in recent years, travelers lumped it as among the world’s worst airports.

Since taking over in 2016, MIAA general manager Ed Monreal has put in place measures to improve efficiency. Airport workers, for instance, are equipped with body cameras and many areas are now monitored through CCTV to prevent incidents of theft.

But the government, with its limited resources, can only do so much. In its present form, NAIA is still congested and decrepit. NAIA, which traces its history to as early as 1948, was built to handle 30 million passengers, but is currently handling 40 million to 50 million passengers.

And yet, no airport development has succeeded due to a combination of factors including vested interests of people in power and business, corruption, bureaucratic cobwebs, legal issues etc. etc.

Politicized

The whole process is also very politicized. For one, unsolicited proposals have always been vulnerable to corruption and patronage politics, government and industry sources told The STAR.

From one administration to another, different individuals in government favor one proponent over the other.

“The palakasan system is still very much prevalent,” a source said.

There are also tycoons who just want the project for themselves, so they will try to stop one company from pursuing its bid, another industry source said.

In the end, the goal to have a better and world-class airport is buried in the chaos, obscured in the fog of war.

Legacy and big money

Tycoons want NAIA because of prestige, power and the money that comes with it. Individually, they’re also frustrated with the congestion, because even in their sleek private jets, they have to wait in line to fly out and fly in through NAIA.

In 2018, MIAA raked in P14.11 billion in revenue, up nine percent from 2017. Of the amount, P1.7 billion went to the national government.

NAIA has the potential to churn in more money than it is generating now when it is run more efficiently and more passengers are able to use it.

Filipinos deserve an efficient airport

And this is what many of the characters in this unending Game of Thrones are forgetting -- the main character in the NAIA story is really the Filipino people.

Filipinos truly deserve a world-class and efficient airport,but  this will only happen when a sincere, competent and efficient proponent -- whether it’s the government or the private sector -- will really keep this in mind and take it to heart.

Until then, expect to see more twists and turns in this highly-politicized NAIA saga. There will be more slayings and betrayals, more magic and sleights of hands, more lobbying and horse-trading, and it will all be in the name of winning the NAIA throne.