SMC’s killer bid for NAIA

EYES WIDE OPEN - Iris Gonzales - The Philippine Star

His rivals in the airport bidding race should have known that tycoon Ramon S. Ang or RSA would go in for the kill. He isn’t afraid to make big bets, especially when it makes sense for San Miguel Corp. (SMC), the diversified conglomerate that he leads.

As early as December last year, RSA already said that he would “bid to win” for the contract to operate and modernize the country’s main gateway, our chaotic Ninoy Aquino International Airport (NAIA), because it would be in synergy with his plans to operate a new airport in Bulacan.

Indeed, the SMC-led consortium did just that, offering a far superior bid compared to its rivals, promising to share 82.16 percent of the airport revenues with the government if it wins.

On Feb. 8, everyone watched with bated breath the live opening of bids to operate & maintain NAIA, conducted by the Department of Transportation.

Three out of four groups qualified. These are the SMC-led group, the GMR Airports Consortium and the tycoons’ Manila International Airport Consortium.

Based on the financial proposals, the SMC-led consortium emerged as the frontrunner, committing to remit to the government as much as 82.16 percent of revenue from NAIA operations if it bags the contract.

GMR Airports Consortium submitted a proposed share of 33.3 percent, while the Manila International Airport Consortium (MIAC) composed of the country’s tycoons offered 25.91 percent.

Lucio Co/Jeff Cheng’s offer

The other bidder, Asian Airport Consortium of tycoons Lucio Co and Jefferson Cheng, failed to hurdle the technical evaluation of the Pre-Qualification Bids and Awards Committee (PBAC).

As such, their financial bid was no longer opened but sources said they offered a revenue share of more than 40 percent.

Thus counting all four, the SMC-led consortium offered the lion’s share of revenue at 82.16 percent; Cheng’s group gave the second highest offer at more than 40 percent; GMR at third spot with 33.3 percent while the tycoons’ consortium offered the least with 25.19 percent.

There’s no surprise here. In 2013, RSA offered P11 billion to build and operate the NAIA Expressway or NAIAX for 30 years – way above the Pangilinan group’s P305-million bid.

Is SMC’s NAIA bid viable?

Now the question on everyone’s mind is this – is SMC’s offer for the airport really viable?

Rival bidders are pessimistic, saying it’s not financially viable. At that revenue share offer, the group might end up renegotiating the contract later on, sources told me.

I asked the man of the hour, RSA himself, and he said that with efficiency improvements, lower construction cost and the projected higher volume of passengers, their offer is viable. He said they did their homework, tapping local and international airport experts, in preparing that bid.

It’s the same principle they applied in coming up with the NAIA-X offer, Ang said, adding that the company has already been reaping the benefits of that project.

Another airport operator, which is not part of any of the four groups, said that indeed, the 82.16 percent revenue share with the government is possible “if one is not greedy.”


Clearly, RSA’s group submitted a far superior bid over his rivals but he can’t pop the champagne just yet. One rival bidder submitted a 200-page manifestation seeking for the disqualification of the SMC-led consortium, saying that the group’s members have questionable qualifications.

PBAC will have to address these issues before announcing the results next week.

In case the SMC-led consortium gets disqualified, what happens next?

Will the government choose GMR, the second best offer? Or will Lucio Co and Jeff Cheng get a chance if they appeal the results?

If SMC gets disqualified, the contract will not automatically go to MIAC, because they gave the least revenue share offer to the government at 25.19 percent.

In a quick chat after last week’s results, RSA told me that it was a transparent bidding process and everyone had equal opportunity to join and prepare.

Amid the issues raised against them, he simply said they did their part and gave the government the best offer.

“We’re just hoping to help our country and the people, the passengers have a better airport,” RSA said.

I fervently hope to finally see an efficient and world-class NAIA.

Will we finally see that happening? Can RSA really deliver? We’ll have to wait and see.

I’m not surprised he gave a superior bid though. He has to make sure NAIA can operate in a way that would be in synergy with his planned Bulacan airport.

That, plus it’s well known that RSA isn’t afraid to bet big. Matapang ang pera, as they say. He believes in putting skin in the game, well aware that scared money doesn’t make money.

I fervently hope the next airport operator succeeds. Now if this whole bidding process ends in failure once again as what happened in the past, then I don’t know when we will ever have a better NAIA.

I’d suggest butchering some roosters and spreading their thick red blood on the airport runway as a sacrifice to the deities to ward off bad luck, but maybe this has nothing to do with luck.

Maybe, the reason why nothing so good or so great has happened to NAIA – or to our country for that matter – is that, here in our nation of 114 million, we’re simply addicted to chaos.

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Email: [email protected]. Follow her on Twitter @eyesgonzales. Column archives at EyesWideOpen on FB.

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