Delays bloat cost of SMC’s Bulacan airport

MANILA, Philippines — The New Manila International Airport (NMIA), set to be the largest gateway in the Philippines, will cost San Miguel Corp. (SMC) additional spending in hundreds of millions of dollars to pay for construction delays resulting from sand shortage.

SMC chairman and CEO Ramon Ang told reporters his conglomerate would spend hundreds of millions of dollars more on top of the original cost of P735.63 billion to build NMIA.

Ang conceded that SMC can no longer complete NMIA by 2027 as initially planned, as contractors are forced to slow down land development due to the shortage in raw materials.

In particular, Ang said SMC was hit by the presidential order in 2023 to suspend all reclamation projects in Manila Bay. The directive prevented SMC from purchasing fill sand that can be used to set up the land where the airport and its facilities will be built.

“When President Marcos ordered the suspension of Manila Bay reclamation, he also stopped the purchase of sand used for landfill. We are one of those affected, as we lost supply of sand,” Ang said.

Despite this, Ang said SMC is negotiating with the government to acquire sand supply, raising its concern of accumulating extra costs if the airport is further delayed.

SMC is hoping it can source construction sand as soon as possible to be able to catch up with civil works and get NMIA ready before President Marcos ends his term in 2028.

“So far, we think that if we can get the sand today, we can start construction and make the airport ready to run by the first quarter of 2028,” Ang said.

SMC has also secured approval from the Department of Transportation to adjust the timetable for NMIA and move completion to 2028. As of June, the largest conglomerate in the Philippines has finished 84.61 percent of the land development for the airport.

San Miguel Aerocity Inc., a unit of San Miguel Holdings Corp., is tasked to build what would be the largest gateway in the Philippines. The first phase of NMIA can facilitate roughly 35 million passengers a year and its development is expected to create one million jobs in Central Luzon.

Apart from developing NMIA, SMC leads the concessionaire set to take over the operations and maintenance of the Ninoy Aquino International Airport (NAIA).

The New NAIA Infrastructure Corp., led by SMC, bagged the concession for the P170.6 billion upgrade of the airport and is scheduled to begin its rehabilitation on Sept. 14.