House OKs franchise for San Miguel's Bulacan airport project on 2nd reading

The House of Representatives on Tuesday approved the measure seeking to grant San Miguel Aerocity Inc., a subsidiary of San Miguel Holdings Corp., a franchise for the construction of its P735-billion New Manila International Airport (NMIA) project in Bulacan.

In a vote of ayes and nays, the chamber approved House Bill 7507, sponsored by Bulacan Representative Jonathan Sy-Alvarado, which also grants San Miguel Aerocity Inc. the franchise to construct, develop, establish, operate and maintain an adjacent airport city.

The franchise to be granted to San Miguel Aerocity Inc. is valid for 50 years, and requires it to construct the airport within one year from the effectivity of the act, complete its construction for 10 years, and commence operations within one year from the approval of the operating permit from the Civil Aviation Authority of the Philippines.

At the same time, the franchise also requires San Miguel Aerocity Inc. to remit to the national government any amount in excess of the 12% Internal Rate of Return of the Airport City.

Under this profit-sharing agreement in the franchise, above a 12% profit margin, San Miguel Aerocity Inc. will share half of its profits to the government, and all profits above 14%.

Albay Representative Joey Salceda, who chairs the House Committee on Ways and Means that approved the tax provisions of the measure, is expecting that the NMIA project will earn a lot.

"This is probably the biggest single-item investment in the country’s history. San Miguel is a Filipino company that has kept nearly all of its money here, to develop this country. They are doubling down on their commitment to Philippine development with this investment," he said.

"I want the airport to happen on fair and equitable terms. That is why I worked with the leadership and my colleagues to come up with fairer tax provisions for the franchise," he added.

The planned NMIA is expected to help to decongest the Ninoy Aquino International Airport, which has now reached overcapacity.

The project involves the construction, operation, and maintenance of a 2,500-hectare airport in Bulacan. The development includes a passenger terminal building with airside and landside facilities, an airport toll road, and four runways.

It includes an 8.4-kilometer tollway connecting the airport to the North Luzon Expressway in Marilao, Bulacan. —LDF, GMA News