ADB recommends to extend NAIA privatization bids submission deadline to Jan. 2024

The Asian Development Bank (ADB) recommended extending the deadline for interested parties to submit bids to take over the operations and maintenance of the Ninoy Aquino International Airport (NAIA) by another month.

The government, through the Department of Transportation (DOTr), has set a December 27 deadline for the submission of bids for the NAIA Public-Private Partnership Project, with the evaluation scheduled in the first quarter of 2024.
 

The financial closing is expected to take place in the second quarter of next year.
 

However, in an internal communication made available to the media, the ADB recommended the extension of bid submission to January 29, 2024 “to give bidders more time to prepare and submit bids, thus resulting in more competition and a better financial outcome for the Philippine government.”
 

The ADB serves as the DOTr’s transaction advisor for the NAIA privatization initiative.
 

The are at least eight possible bidders , who bought bid documents, for the NAIA privatization namely the Asian Airport Consortium, Cengiz Insaat Sanayi ve Ticaret A.S, GMR Airports International, Manila International Airport Consortium, San Miguel Holdings Corp., Spark 888 Management, South Korea’s Incheon International Airport Corp., and Turkey’s Limak Group.
 

The ADB said extending the bid submission deadline, “would also provide concrete evidence of the government’s commitment to encourage new players, and foreign investment in Philippine public-private partnerships, without causing undue delay to NAIA’s modernization and the PPP program.”
 

The multilateral lender added that six prospective bidders “have requested an extension.”

“They have asked for more time to request and analyze additional information from MIAA and DOTr, and to secure their internal corporate approvals, which will take longer in light of the upcoming holiday season,” the bank said.

Sought for comment, the DOTr confirmed that there are prospective bidders who requested for extension of the bid submission date. 

“However, the Pre-qualifications, Bids, and Award Committee (PBAC) for the project already issued a Bid Bulletin indicating that the Bid Submission Date remains to be December 27, 2023,” the agency said.

The ADB, meanwhile, said that if the December 27, 2023 deadline is retained, only two prospective bidders backed by large local corporations are expected to submit bids.
 

“They have both submitted unsolicited proposals for NAIA in the past and are thus significantly more familiar with NAIA than the other four prospective bidders,” the bank said.

“We strongly believe that extending the bid submission date would attract more bids, thus resulting in greater competition and a better financial outcome for the government,” the ADB said.
 

The DOTr earlier said the bidder that offers the biggest share of their revenue from managing NAIA would win the project, with the concession agreement indicating a filed P2-billion annuity payment.
 

The National Economic and Development Authority (NEDA) Board, chaired by President Ferdinand “Bongbong” Marcos Jr., in August opted to push through with plans to privatize NAIA through a solicited bid with the upfront payment cost now being studied and initially estimated at P30 billion.

This came after the Department of Transportation (DOTr) and the Manila International Airport Authority (MIAA) in June submitted a joint proposal to the NEDA Board seeking a private concession to invest and improve the NAIA for 15 years.

The NEDA Board approved the 15-year concession period, with the option to renew for another 10 years based on a performance review, and should two new airports — the New Manila International Airport in Bulacan and the Sangley International Airport in Cavite — be delayed.
 

Prior to this, the Manila International Airport Consortium (MIAC) in April submitted an unsolicited proposal to take over NAIA, but this was deemed “de facto closed” when the government opted for a solicited bid.—RF, GMA Integrated News