Race to NAIA: Game of Thrones, Philippines tycoons edition

(First of three parts)

MANILA, Philippines — The plot is just as thick, intriguing and twisted as the famed Game of Thrones television series. There are dark tones and magic, there’s fire and ice. There are dragons and dragon-slayers disguised in business suits and signature ties, and barong Tagalog, too.

The race really is all about who gets to rehabilitate and redevelop, or operate and maintain the sprawling 646-hectare Ninoy Aquino International Airport (NAIA), the country’s main gateway in Parañaque. The main characters in this story are the country’s tycoons, but there are other characters, too – some with cameo appearances, some just behind the scenes – government officials, syndicate of airport workers, airport stakeholders, etc. etc.

It is, indeed, a continuing saga, with a lot of twists and turns. There are long pauses, too, as some of the characters needed to regroup. Old plots are resurrected as new chapters unfold.

Some of the characters in this story come and go. Some had to wait for years to make their comeback, choosing the right time and right connections to revive their ambitions.

How this decades-long saga will end is still anyone’s guess.

Why NAIA?

Why are tycoons scrambling to get NAIA?

NAIA, being the country’s main gateway, is a prestigious asset, touted as a crown jewel. Anyone who gets the task to redevelop, redesign and rehabilitate NAIA will have the honor and prestige of leaving a lasting legacy to the Filipino people and to this nation of 107 million.

“NAIA is the country’s main gateway. It’s the prestige because it’s the main entry and exit point of the country and it’s a city airport. People would still prefer NAIA over Bulacan, Sangley or Clark especially if it is run well,” Megawide’s managing director for transport Louie Ferrer told The STAR in a recent interview.

He said that their group wanted to replicate their success with the Mactan-Cebu International Airport (MCIA), which they took charge of in 2014 and which is now a multi-awarded airport.

Megawide

In the ongoing race to NAIA, Megawide is the latest to vie for the coveted airport project.

Armed with its experience in running the MCIA, Megawide found the confidence to pursue the NAIA deal.

Aside from experience, Ferrer and Megawide chairman Edgar Saavedra, both engineers, are young businessmen. Being younger than the other proponents who are in their late 50s, 60s or 70s, they believe they have the energy and drive to sustain the project for the long term as they proposed a 25-year concession period.

“NAIA needs to be competitive. It has to bring back its charm and beauty. We can do in NAIA what we did in Cebu and growth will be significant. NAIA is the main partner of the Department of Tourism in bringing tourists to the country. Like in Cebu, we are more than just an operator. We are also the DOT’s partner,” Ferrer said.

Espousing the Filipino heritage, Megawide proposed a Banawe Rice Terraces-inspired design for NAIA. It also proposed to address the congestion by providing engineering solutions instead of building a new runway.

But dragons and dragon-slayers are not letting the listed construction and engineering conglomerate have its way.

Soon after Megawide announced that it was given the original proponent status to redevelop NAIA – after the so-called super consortium of seven conglomerates, which was the first to get the OPS, threw in the towel on the deal because of restricting government conditions – the company found itself at the receiving end of vicious public attacks on its credibility to take on a project as big as NAIA.

Lawmakers questioned their financial capability. Puwersa ng Bayang Atleta party-list Rep. Jericho Nograles raised doubts on the capability of Megawide to fund the required equity for its proposed P107-billion project.

But Megawide explained they could raise the money to finance the project, as required by the Build Operate Transfer (BOT) Law.

The BOT’s guidelines state the “prospective project proponent must have adequate capability to sustain the financing requirements for the detailed engineering design, construction and/or operation and maintenance phases of the project.”

“We have no doubt that we will be able to sustain future expansion without issue despite qualification requirements having been based on initial development phases only,” Saavedra said in a recent interview.

After this issue was clarified, Megawide then found itself facing an Anti-Dummy Law complaint filed by the National Bureau of Investigation with the Department of Justice.  Megawide denied that the Mactan-Cebu airport is run by foreigners.

The timing of the filing of the Anti-Dummy charges was impeccable, sources observed. It was six years late, obviously just a ploy to have Megawide’s OPS revoked. Any company facing charges cannot participate in a government project even if it is an unsolicited bid.

The Manila International Airport Authority (MIAA), not surprisingly, revoked the OPS of Megawide, but the listed company filed a Motion for Reconsideration, which the government agency has yet to decide on as of this writing.

Duterte legacy

The Duterte administration has vowed to usher in the so-called golden age of infrastructure in the country with the development of new roads, bridges and airports with the help of the private sector.

The NAIA redevelopment could have been the face of the administration’s so-called Build Build Build program.

But in reality, there seems to be a disconnect between the policy pronouncements of the government to have a better gateway with what is happening on the ground.

Transportation Secretary Arthur Tugade said he favors a multi-airport strategy including the redevelopment of NAIA.

And yet, industry sources observed, it seems that every proposal to redevelop NAIA gets entangled in bureaucratic cobwebs.

The naia saga

It is important to note, however, that the NAIA story didn’t just start under the Duterte administration. It started way back in 1989 under the administration of the late former president Corazon Aquino, when the Department of Transportation and Communications commissioned Aeroports de Paris to do a feasibility study to expand NAIA’s capacity.

The recommendation was to build two new terminals.

Back then, tycoons were already interested in upgrading NAIA. In 1993, Asia’s Emerging Dragon Corp. was born. The country’s taipans John Gokongwei Jr., Andrew Gotianun, Henry Sy Sr, George Ty, Alfonso Yuchengco and Lucio Tan – formed AEDC to submit an unsolicited proposal for the construction of a third terminal at NAIA.

Five of the six taipans have already died, leaving Tan as the lone survivor. Their plan did not push through. AEDC lost to the Philippine International Air Transport Corp. (Piatco).

In 1998, Terminal 2 was completed. In 1997, the government approved the construction of Terminal 3, which was originally scheduled to be completed in 2002. But legal issues got in the way and it only became operational in 2014.

Fast forward to 2020. Today, the dream to transform NAIA into a world-class gateway remains as just that -- a dream.

To be continued.