The Department of Transportation (DOTr) on Friday finally awarded the P171 billion contract to rehabilitate, operate and maintain the Ninoy Aquino International Airport (NAIA) to the group of San Miguel Corp. This was announced by the Department of Transportation (DOTr) Secretary Jaime Bautista in a press briefing yesterday.
Bautista said that the DOTr issued the notice of award to the SMC SAP Company Consortium.
The DOTr said the NAIA privatization is three decades and six administrations in the making, starting from the PIATCO-Fraport attempt to put NAIA under a public-private partnership (PPP), which started during the Ramos administration.
This move marks the beginning of a 25-year transformation for one of the Philippines’ busiest airports. Transportation Undersecretary and chairman of the Pre-qualification Bids and Awards Committee (PBAC) John Batan said the NAIA project is expected to generate P900 billion in national government revenues in the course of its entire 25-year concession period, inclusive of the P30 billion upfront payment, P2 billion annual payment and 82 percent government revenue share.
The SMC SAP Group, which is formed by San Miguel Holdings Corp., RMM Asian Logistics, Inc., RLW Aviation Development, Inc. and Incheon International Airport Corp. had offered a highest bid of 82.16 percent revenue share to the government at the opening of financial proposals for NAIA.
In a statement, San Miguel said its proposal is designed not only to elevate NAIA to world-class standard, but also to ensure that the government benefits from the most advantageous revenue-sharing agreement.
The DOTr expects to sign the concession agreement with the winning bidder on March 15, with the turnover of the facility likely in September this year.
It will serve as co-grantors for the project with MIAA, which would have a 15-year concession period and an option for a 10-year extension.
The NAIA project involves capital investment to improve the airport’s facilities to comply with the International Civil Aviation Organization (ICAO) and other internationally accepted standards.This means modernizing the terminals, optimizing and enhancing the capacity of the airport to 62 million passengers a year, enhancing asset quality and passenger experience, improving the information and technology systems infrastructure and ensuring reliable operations over the period of the concession.