New NAIA super consortium eyeing 25-year concession
MANILA, Philippines — The Manila International Airport Consortium was firm on sticking to its proposal of a 25-year concession with the government, saying this would ensure lower fees and charges.
In a press conference on Monday, the consortium composed of Aboitiz InfraCapital, AC Infrastructure Holdings Corp., Asia's Emerging Dragon Corp., Alliance Global – Infracorp Development, Filinvest Development Corp., JG Summit Infrastructure Holdings Corp. and Global Infrastructure Partners, reiterated their pitch.
Consortium members, such as GIP’s head of transport Philip Iley, explained that the 25-year concession agreement will “unlock the full potential” of the country’s main gateway.
Iley is the former director of Gatwick airport, located in the United Kingdom.
“The shorter concession will result in three things: lower investment, higher charges for Filipino pasessngers, and lower economic benefit to the country and value for the government,” Iley said.
The consortium pitched an unsolicited proposal to the state of P267 billion, which would cover the rehabilitation and development of the Ninoy Aquino International Airport. The amount was higher than their previous pitch of P100 billion, as was stated in previous news reports, but the consortium insisted the proposal was always at this level.
Broken down, the amount comprises of a P57 billion concession payment to be settled upfront to the national government. The consortium indicated that, if the proposal is realized, this is the largest payment offered for a transport public-private partnership project in the country.
The consortium said it will also spend over P211 billion in capital investments, wherein P57 billion of which will be paid over the first five years of the 25-year concession agreement.
That said, the remaining P154 billion will be invested for the rest of the concession period.
“We believe quite strongly that to unlock the full potential of NAIA, and to invest the amount of money we’re talking about and keep charges low, the 25 years is the optimal solution,” Iley added.
Details surrounding the proposal have been sparse, as Cosette Canilao, president and CEO of Aboitiz InfraCapital, said since they submitted their proposal to the Department of Transportation on April 27. This meant that the government is reviewing the unsolicited proposal.
For Kevin Tan, AGI president and CEO, a 15-year concession period will not be enough, citing examples that within a 15 year concession deal, the increase of the passenger service charge could prove “more abrupt” compared to a 25-year agreement.
“A 15-year concession period will not really do much in terms of transforming the airport,” said Tan.
By year-end
This was the not the first time that a proposal to rehabilitate NAIA has been floated publicly. A consortium 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., pitched a similar plan in February 2018. The proposed deal covered a P350 billion concession for 35 years.
The proposal was revised to P102 billion for a 15-year concession deal.
That proposal did not prosper then, after the previous Duterte administration rejected the proposal. This new consortium is keen on peddling this new concession deal to the Marcos Jr. administration, which rolled out 194 infrastructure projects they hope would reinvigorate the Philppine economy.
The consortium faces a Swiss challenge, as the national government is bound by law to open the floor to other bidders.
Despite lack of firmer details on the proposal, Canilao told reporters the consortium is in the process of finalizing the financing agreement.
“If they approve it within the year, we go through the whole process, we’re able to sign the concession agreement by year-end, then will be able to start immediately,” Canilao said.
If approved, proposal will move in three phases, according to the consortium.
The first phase will be implemented in the first two years. This will boost NAIA’s capacity to 54 million passengers per year by 2025 and reduce queuing time.
The second phase will expand NAIA’s terminal floor, as well as add airfield facilities and bolster cross-terminal transport.
The last phase will increase NAIA’s capacity to 70 million passengers yearly by 2048, and expand terminal space and airfield capacity.
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