A glance at government's windfall from SMC’s NAIA takeover

MANILA, Philippines — The winning bid of the San Miguel Corp.-led consortium for the Ninoy Aquino International Airport (NAIA) translates to a government revenue share of P911.1 billion over a 25-year period, significantly higher than the other bidders’ revenue share offer of between P342.1 billion and P416.9 billion over the same period.

This means the government gained roughly P494 billion to P569 billion from the SMC SAP & Co. Consortium’s offer over the 25-year period, according to a comparison of the bid submissions obtained by The STAR.

The P911.1 billion revenue from SMC SAP & Co. comprises P831.1 billion representing 82.16 percent share to the government plus upfront of P30 billion and fixed annuities of P50 billion.

The revenue to be shared with the government excludes passenger service charges (PSC) or terminal fees which are bound to increase when the private sector takes over.

Last Feb. 16, the Department of Transportation (DOTr) awarded the contract to operate and rehabilitate NAIA to the SMC SAP & Co. for a concession period of 15 years, extendable by 10 years depending on the performance of the group.

The SMC-led consortium, meanwhile, could generate as much as P450.3 billion in revenue from PSC for a period of 25 years. This is excluded from revenue that would be shared with the government, documents also showed.

On the other hand, revenues subject to government revenue’s share total P1 trillion over the 25-year period, of which P662 billion will come from aeronautical charges and P349.6 billion from non-aeronautical charges.

Aeronautical charges cover landing and take-off fees (P449.4 billion); check-in counter revenue (P46 billion); aerobridge fees (P34.5 billion); aircraft parking (P28 billion); and other aeronautical revenues (P104 billion) for a total amount of P662 billion.

On the other hand, non-aeronautical charges over the 25-year period cover commercial space rental (P252.7 billion); car parking (P27.9 billion); duty free revenue (P25.4 billion); and other non-aeronautical revenue P(43.6 billion) for a total of P349.6 billion.

This sums up to P1 trillion, which at 82.16 percent translates to a revenue share for the government of P831.1 billion.

Further comparison of NAIA proposals also showed that SMC SAP & Co. Consortium’s total project cost stood at P123 billion over a 25-year period, lower than the other bidders’ P262 billion to P275 billion total project cost over the same period.

All three bidders committed to increase terminal capacity to 62 million passengers from 32 million at present and a guaranteed aircraft terminal movements (ATM) per hour to 48 from 40.