THE Manila International Airport Consortium (Miac), also tagged by the government as the “mega consortium,” has officially submitted to the Department of Transportation (DOTr) an updated unsolicited proposal for the development of the Ninoy Aquino International Airport (Naia).
The new proposal, called the Naia Masterplan, now costs P267 billion and will be implemented in “three key phases of development.” The price tag is almost double the P141-billion initial cost that it announced earlier this year.
The consortium is seeking a 25-year concession period—it initially propopsed 15 years—saying that this will allow investors to recover their investment.
Miac comprises six of the Philippines’ largest 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.
Global Infrastructure Partners (GIP), an inventor and airport operator, will serve as the technical partner for Miac.
“With the longer concession period, the investors are also able to put in a much larger amount for infrastructure and technology within a shorter time frame, so that we can quickly ramp up the capacity of Naia from its 32 to 62 million capacity,” Filinvest President and Chief Executive Officer Josephine Gotianun-Yap said. “Most important, though, is that a longer concession period will allow the consortium to provide a more comprehensive and extensive rehabilitation.”
Miac intends to implement the proposal in three phases.
The first phase, to be implemented over the first two years, is meant to quickly increase the capacity of the airport to 54 million passengers per annum (MPPA) by 2025 and improve reliability, while reducing queuing times at various bottlenecks throughout Naia.
Phase 2 will increase airport capacity to 62.5 MPPA by 2028 through the expansion and development of the terminal floor area, the addition of airfield facilities and improvements in cross-terminal transportation.
The third phase further increases Naia’s capacity to approximately 70 MPPA by 2048 and consists of long-term expansion and development projects to further expand terminal space and airfield capacity.
“The Manila International Airport Consortium recognizes the immense task of transforming Naia to meet the exponentially growing demands of Mega Manila air travel, not only in the here and now but also in the future,” said Kevin L. Tan, chairman and president of Alliance Global-InfraCorp Development Inc. “It is because of this that the members of the Consortium have pooled together [their] significant resources, technical expertise, and operational experience to put forward a Naia Masterplan.”
GIP Vice Chairman Jim Yong Kim said Miac envisions a Naia serving as an “engine of growth for the Philippines, especially in the tourism and economic sectors as the country aspires to position itself as a regional powerhouse.”
“Human capital, access to financial capital, strong government leadership, and reliable transport infrastructure are key enablers of any regional economic hub. Reliable transport infrastructure is a key challenge for the Philippines and the rehabilitation of Naia for the long-term is essential if Manila is to become the regional economic hub we know it can be,” Kim said.
The group claimed this is the “fastest route to sustainable development,” if the government could award the project this year.
“The Miac unsolicited proposal represents the fastest route to the rehabilitation and modernization that Naia urgently needs,” Aboitiz InfraCapital President Cosette Canilao said. “The unsolicited procurement mode of the Build-Operate-Tranfer Law is a powerful tool of the government to fast track infrastructure development provided the proposal is properly prepared, backed by credible and qualified proponents, and adheres to the rules, policies, and guidelines of the government. Miac’s unsolicited proposal unequivocally meets all those criteria.”
Canilao headed the Public-Private Partnership (PPP) Center during the time of the late President Benigno Aquino III.
Naia’s rehabilitation is “critical for it to capably meet a projected explosion in travel demand,” she said.
By 2028, Naia is projected to welcome 55 million passengers—well above its declared capacity of 31 MPPA. Before the pandemic, Naia had already breached this ceiling with a peak of 47.9 million passengers in 2019.
“We have done the homework: it is a turnkey proposal ready for government evaluation and has the financing to get boots and shovels on the ground,” Canilao said.
Miac’s P267-billion proposal includes P211 billion of capital investments—P57 billion of which will be rolled out over the first five years, with the remaining P154 billion to be invested over the remainder of the proposed 25-year concession period.
The proposal includes a P57-billion concession payment to the government—the largest ever upfront concession payment offered for a transportation PPP project in the country, whether solicited or unsolicited.
“The upfront concession payment can help strengthen the government’s fiscal position and address other critical priorities such as ongoing pandemic recovery efforts; growing consumer demands for safer, more convenient and efficient travel services; and tightening global financial conditions,” said BJ Sebastian, Senior Advisor to JG Summit.
Miac’s planned rehabilitation of Naia is projected to generate P446 billion in gross economic value. This includes—in gross value basis—P100 billion from gross value-add in tourism activities, P152 billion from increased passenger comfort, P60 billion from passenger time savings, P65 billion from aircraft decongestion savings, and P65 billion from new local jobs.
Now, the consortium hopes the government will consider the revisions to its original proposal, including the extension of its proposed concession period.
“A government decision favoring a 25-year concession plan will show its commitment to attract strong foreign and local players for future PPP projects,” LT Group CFO Jose Gabriel D. Olives said. “An effort to ensure meaningful private sector participation in PPPs will benefit other projects in the future, as more private sector players will be enticed to participate.”
Image credits: Bernard Testa