P30 Billion Upfront: What the Government Wants From the Winning Bidder of the NAIA Rehab Project

Whoever wins the bid to rehabilitate the aging Ninoy Aquino International Airport will need to shell out as much as P30 billion as upfront payment to the government, the Department of Transportation (DOTr) said on Tuesday (July 25). 

DOTr Secretary Jaime Bautista the premium payment was triggered by the demand for the project and is normal for public-private partnership (PPP) deals.

“Investors have a huge opportunity to invest in the Manila airport, given that other countries have already upgraded their airports. With the volume of passengers, the Manila airport would be a good deal for them,” Bautista said.

ALSO READ

5 Things You Need to Know About the 'Superconsortium's' P267 Billion Bid to Rehabilitate NAIA

Here We Go Again: 'Superconsortium' Submits New Proposal to Rehabilitate Aging NAIA

The amount is not yet final, although Bautista mentioned that the unsolicited proposal submitted by the so-called “superconsortium” made up of some of the country’s biggest conglomerates included an upfront payment worth P55 billion.

The Manila International Airport Consortium (MIAC) is composed of six of the Philippines’ largest conglomerates: Aboitiz InfraCapital Incorporated, Ayala-led AC Infrastructure Holdings Corporation, Andrew Tan-owned Alliance Global Group Incorporated, Lucio Tan’s Asia's Emerging Dragon Corporation, Filinvest Development Corporation of the Gotianun family, and Gokongwei-led JG Summit Holdings. 

MIAC first submitted its P267-billion proposal involving a 25-year concession period to the government last April 27, 2023. It was, however, rejected after the National Economic and Development Authority (NEDA) approved the P170-billion NAIA Rehabilitation Project under a solicited scheme.

Besides the upfront payment, Bautista noted that the government plans to add an “investment component” in the terms of reference for the project.

“There is a commitment to spend a certain amount of money for infrastructure,” the secretary said. “We have a mandatory infrastructure that should be implemented within the next five years, which could reach P100 million to P130 million in the next three to five years.”

The DOTr intends to release the terms of reference for the deal published by August and will accepting bids as early as the end of October. Bautista had earlier said the MIAC was free to submit its own bid for the project.

Following this timeline, Bautista expects the project to have been awarded by the end of the year, and that financial closing to be done a few months later.

“This is one project for the airport that we think will be implemented soon,” he said. “This will result in increased capacity of the Manila International Airport, considering that the airport is already congested with a capacity of 32 million passengers per year, but is now handling more than 40 million.”

Bautista revealed that the government has already received feelers from prospective bidders both here and from other markets after conducting a market-sounding activity, although he declined to name any of them. 

Meanwhile, following the government’s rejection of their unsolicited proposal, the conglomerates behind MIAC have not yet indicated whether they would join the auction for the solicited project.

This is not the first time that the “superconsortium” submitted an unsolicited proposal to rehabilitate NAIA. But the group said they were encouraged to try again with the entry of a new government led by President Ferdinand “Bongbong” Marcos Jr.