NAIA bidders seek more time to prepare bids

There’s a mad rush among some of the local and international bidders vying for the modernization of the Ninoy Aquino International Airport (NAIA) because of the tight deadline and some are desperately seeking an extension.

The call for more time isn’t unreasonable. As it is now, some bidders are already jittery and anxious because the privatization of NAIA is moving at a fast pace and it’s happening during the dizzying holiday season.

Normally, that’s OK but for a project as big-ticket as NAIA, some bidders say they need more time to prepare their offers. The Mactan Airport bidding years ago, for instance, took roughly seven months.

For NAIA, the Invitation to Bid was issued last Aug. 23, 2023 and by the first week of December 2023, the government will release the concession agreement.

Deadline for submission of bids is Dec. 27, 2023, according to the Department of Transportation (DOTr), giving bidders only about 20 days, including Christmas, to study the terms and prepare their bids and get all the approvals from their foreign partners and respective boards, among others.

At least six companies have bought bid documents for the airport’s privatization, the DOTr has said. These are GMR, San Miguel Corp., the Manila International Airport Consortium, SPARC 888, Asian Airport Consortium, IGA of Turkey, Cengiz Insaat Sanayi ve Ticaret A.S. and Incheon International Airport.

For some of the eight potential bidders, 20 days is not enough. Thus, they are asking for a one-time 30-day extension.

It seems reasonable, considering that more bidders would make the process more competitive and such competition would translate to the best offer for the government and ultimately, the Filipino people.

Especially anxious are the foreign parties because, as I’m told by industry sources, they are not familiar with the Philippine setting, including the ins and outs of our airport. They need more time to prepare their offers and need to coordinate with Philippine embassies in their countries or their respective embassies here, which may be busy during the holiday season.

If the foreign partners are not able to finish their due diligence, a potentially best bid could be missed.

NAIA nightmare

As I’ve said before, we deserve a better airport yesterday. Our main gateway has been dubbed as the world’s worst airport. Our NAIA nightmare must finally end.

More than the embarrassment though, it’s also the inconvenience we’ve consistently experienced many times before that makes us really long for a better airport.

But while we need to do this fast, we also need to do this properly.

If more than one party is asking for more time, then it seems a fair and valid request.

Foreign partners

Incidentally, foreign partners are also looking at a completely new angle in this project, which is the Public Service Act.

This landmark legislation allows foreigners to own airports, railways, expressways and telecommunications. If handled well, this could be the start of more and bigger foreign investments into big-ticket infrastructure projects in the country.

Personally, I prefer a Filipino team taking the lead, possibly with a foreign partner because who can better understand the intricacies of the Filipino traveler than Filipinos themselves?
But at the end of the day, what is important is to finally have a new, modern and world-class airport for all Filipinos and our guests.

The NAIA project costs around P170 billion and completion is expected in five years.

If successful, we will finally have a better airport which could raise passenger capacity to 62 million per year from 32 million to 40 million now. There would be more landings and takeoffs, which would mean more tourists and investors visiting the country.

Legacy project

The NAIA privatization could be the Marcos administration’s most important project and if Transportation Secretary Jimmy Bautista is able to make it a reality, it would mean an end to what seems like a NAIA curse – decades of failed attempts at privatizing it.

We can see that the DOTr is serious about making this a legacy project of the administration. Sec. Bautista, former president of Philippine Airlines, knows how badly we need a better international gateway.

The government knows, too, that having a private company run the airport may result in a more efficient gateway. We’ve seen world-class airports in other countries operated by private operators.

In the Philippines, government agencies must comply with the very problematic and Jurassic-era Procurement Law or Republic Act 9184. Imagine if you need to acquire a faucet or a light bulb, it would take months before you can actually procure these items.

In contrast, private operators are expected to be more efficient because it’s how they earn. For example, the private sector would not deploy security guards just to wave off cars to go up the ramp toward the terminals, estimated to cost millions of pesos in taxpayers’ money annually. This is not efficient.

Going back to the extension, I heard that some members of the economic team are OK with the extension.

What is the downside of giving an extension of an additional 30 days? I don’t see any. It’s all upside.

We’ve already waited for decades. I’m sure we can wait for another month if it means making the process more competitive by giving participants more time to prepare their offers, especially during this busy holiday season.

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Email: [email protected]. Follow her on Twitter @eyesgonzales. Column archives at EyesWideOpen (Iris Gonzales) on Facebook.