NAIA consortium pushes bid for 25-year concession

MANILA, Philippines — The Manila International Airport Consortium (MIAC) is pushing for a 25-year concession period for the rehabilitation of the Ninoy Aquino International Airport, saying this is the optimal period to unlock the NAIA’s full potential while keeping passenger charges low.

In a press conference yesterday, the MIAC emphasized that 25 years would be the optimal period for the rehabilitation of the country’s main international gateway.

The Department of Transportation (DOTr) has a proposal for a solicited bidding to upgrade NAIA under a shorter concession period of 15 years.

MIAC is  composed of conglomerates 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., and infrastructure investor Global Infrastructure Partners (GIP).

Philip Iley, partner and head of transport of GIP, said a long-term investment would be needed to make NAIA a safe, efficient and high-performing airport.

“The shorter the concession, that is going to result in three things. It’s going to result in lower investment, it is going to result in higher charges for Filipino passengers and lower benefits to the country and lower value to the government,” he said.

“So we believe quite strongly that to unlock the full potential of NAIA and to invest the amount of money we are talking about and keep charges low, 25 years is the optimal solution,” he said further.

Alliance Global-InfraCorp Development Inc. chairman and president Kevin Tan said that under a 15-year concession period, the passenger service charge increase would be more abrupt compared to a longer concession period of 25 years.

“I think that a 15-year concession period will not really do much in terms of transforming the airport. We’ve already studied that before… That’s why the proposal is 25 years,” he said.

Filinvest Development Corp. president and CEO Josephine Gotianun-Yap said the longer concession period takes into account the air traffic demand forecast and provides for a smooth transition for a multi-airport strategy.

“A longer concession period will allow the consortium to provide a more comprehensive and extensive rehabilitation,” she said.

Aboitiz InfraCapital Inc. president and CEO Cosette Canilao said the proposal submitted to the DOTr last April by the MIAC for the NAIA upgrade has a project cost of P267 billion.

MIAC said last April, the unsolicited proposal was valued at over P100 billion.

Under the proposal, there are three key phases of development, with phase 1 to be implemented over the first two years.  Phase 1 is aimed at increasing the capacity of the airport to 54 million passengers per annum by 2025.

Phase 2, on the other hand, will involve increasing airport capacity to 62.5 million passengers per year by 2028 through expansion and development of the terminal floor area, addition of airfield facilities and improvements in cross-terminal transportation.

The final phase or phase 3 will further increase NAIA’s capacity to 70 million passengers per annum by 2048, and cover long-term expansion and development projects to further expand terminal space and airfield capacity.

Beyond the P267 billion upfront payment and capital investments for the project, the government is projected to receive an additional P280 billion over the course of the concession period from revenue sharing and taxes.

MIAC’s planned rehabilitation of NAIA is also projected to generate P446 billion in gross economic value.