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Manila International Airport Consortium seeks 25-year concession period

The Manila International Airport Consortium (MIAC) is seeking a 25-year concession period for its unsolicited proposal to rehabilitate and develop the Ninoy Aquino International Airport (NAIA), as the time period would be the optimal solution to unlock the full potential of the country’s main gateway.

The proposal comes as the government — through the Department of Transportation (DOTr) and the Manila International Airport Authority (MIAA) — is looking at a solicited P141-billion, 15-year proposal to rehabilitate NAIA.

In its proposal, however, the MIAC is seeking a longer period which it said would enable investors to put in a bigger amount and provide a sufficient timetable for the private concessionaire to recoup such outlays.

The MIAC is composed of Aboitiz InfraCapital Inc., AC Infrastructure Holdings Corp., Asia’s Emerging Dragon Corp., Alliance Global-Infracorp Development Inc., Filinvest Development Corp., JG Summit Infrastructure Holdings Corp., and US-based Global Infrastructure Partners (GIP).

“With the longer concession period, the investors are also able to put in a much larger amount for infrastructure and technology within a shorter time frame, so that we can quickly ramp up the capacity of NAIA from its 32 to 62 million capacity,” Filinvest President and Chief Executive Officer Josephine Gotianun-Yap said in a press briefing in Makati City.

“Most important, though, is that a longer concession period will allow the consortium to provide a more comprehensive and extensive rehabilitation,” she added.

The MIAC officially submitted its P267-billion unsolicited proposal to rehabilitate NAIA on April 27, 2023, but it has yet to be fully reviewed by the DOTr.

Under its proposal, the MIAC seeks to boost the capacity of the NAIA to 54 million passengers per annum (MPPA) by 2025, to 62.5 MPPA by 2028, and to 70 MPPA by 2048 through long-term expansion and development projects.

“The amount that the consortium will be investing will only work with a 25-year concession period so that we can have an airport that we can be proud of,” Gotianun-Yap said.

“We would like to note that the unsolicited proposal provides the government the option and flexibility to choose a 15-year no fault termination at its option,” she added.

The proposed amount includes P211 billion of capitals investments — P57 billion to be rolled out over the first five years, and P154 billion to be invested over the proposed 25-year concession period.

It also includes a P57-billion concession payment to the government, said to be the largest upfront concession payment offered for a transportation private-public partnership (PPP) in the country, whether solicited or unsolicited.

“The upfront concession payment can help strengthen the government’s fiscal position and address other critical priorities such as ongoing pandemic recovery efforts; growing consumer demands for safer, more convenient, and efficient travel services; and tightening financial conditions,” JG Summit senior advisor Bach Johann Sebastian said.

The MIAC said the project is expected to generate P446 in gross economic value, including P100 billion from gross value-add in tourism activities, P152 billion from increased passenger comfort, P60 billion from passenger time savings, P65 billion from aircraft decongestion savings, and P65 billion from new local jobs.

“The Manila International Airport Consortium recognizes the immense task of transforming NAIA to meet the exponentially growing demands of Mega Manila air travel, not only in the here and now but also in the future,” Alliance Global Chairman and President Kevin Tan said.

“It is because of this that the members of the consortium have pooled together its significant resources, technical expertise and operational experience to put forward a NAIA masterplan,” he added.

The NAIA recently experienced several power outages, with the Labor Day outage affecting some 9,000 passengers, while the New Year’s Day outage affected 56,000 passengers. — DVM, GMA Integrated News