MANILA, Philippines — Conglomerate San Miguel Corp. has submitted a revised concession agreement for its unsolicited proposal to build a new international airport in Bulacan, with the government hopeful to award the contract to the proponent toward the end of the year.
“SMC submitted a revised concession agreement yesterday, it is now under review and is set for another negotiation on Monday. Hopefully the proponent will be available to discuss the terms and details of the proposal,” Transportation Undersecretary for planning Ruben Reinoso said yesterday.
“Most of the issues that were discussed were provisions on what constitute material adverse government action, what constitute change in law to warrant compensation by the government to the private sector, and determination of payment in case of default of either party. Those were the three major issues that we discussed and based on certain agreements in principle during that meeting, they have submitted their revised proposal yesterday,” he said.
Reinoso said the concession agreement submitted by San Miguel would take several days to read due to its volume, with “every comma and period mattering a lot in the contract.”
“We wanted more specific, we wanted more details because if the language is broad, sometimes it becomes subject to dispute in the future. We want it to be clear,” he said.
Nonetheless, Reinoso said the Department of Transportation is keen on moving forward with what he called as “the very advanced proposal” for the Bulacan airport.
“It’s in advanced stage. We’re negotiating already on the detailed terms and conditions of the concession agreement and we are preparing already for the competitive challenge. As long as we are able to agree on the terms and conditions of the concession agreement, the same document will be submitted to the NEDA ICC for confirmation. Simultaneously, we are now preparing for Swiss challenge. We are drafting the terms of reference, bid parameters, risk allocation matrix,” he said.
“We hope to complete this before the year ends so that hopefully, if everything is agreed upon, the proponent will be granted final approval and award of the contract by early next year or hopefully towards the end of the year,” Reinoso said.
The P735 billion New Manila International Airport project in Bulacan province was granted approval by the National Economic and Development Authority.
The project involves the construction of a world-class, major international gateway with four to six parallel runways, modern terminals, a sea port, an industrial zone, and necessary infrastructure such as expressways.
The agreed concession period is 50 years.
The development of the project is part of the DOTr’s multi-airport strategy seen to decongest the Ninoy Aquino International Airport in Manila which serves as the country’s main international gateway.
Meanwhile, the terms and conditions of the proposed redevelopment of the Ninoy Aquino International Airport (NAIA) are now being ironed out between the government and the super consortium of seven conglomerates following the grant of original proponent status (OPS) to the group, according to the DOTr.
Reinoso said the unsolicited proposal for the NAIA rehabilitation is progressing toward a possible clearing of all hurdles within the year.
The NAIA Consortium, which is composed of Aboitiz InfraCapital Inc., AC Infrastructure Holdings Corp., Alliance Global Group Inc., Asia’s Emerging Dragon Corp., Filinvest Development Corp., JG Summit Holdings Inc. and Metro Pacific Investments Corp., has been granted with the OPS for its plan to rehabilitate the country’s main international gateway by the board of the Manila International Airport Authority (MIAA) last Aug. 6.
“The management of MIAA is now negotiating with super consortium on the terms and conditions of the unsolicited proposal and as soon as they are able to agree on the terms and conditions, the MIAA will submit to the NEDA ICC the unsolicited proposal for its consideration and we hope this can all happen within the year,” Reinoso said.
The grant of OPS to the NAIA Consortium gives the group the right to match offers from other parties when a Swiss Challenge is conducted for the project.
Under its proposal, the consortium intends to pour in P102 billion to rehabilitate, upgrade, expand, operate and maintain the aging NAIA for 15 years.
The unsolicited proposal, which was submitted to the DOTr and to the MIAA last Feb. 12, aims to transform NAIA into a regional airport hub and will expand its capacity to meet the anticipated growth in passenger traffic from the strong economies of the Philippines and the region.