NAIA deal signing set in Malacañang on Monday

March 15, 2024 | 12:00am

MANILA, Philippines — Diversified conglomerate San Miguel Corp. (SMC) will get the blessing of no less than President Marcos in its takeover of the Ninoy Aquino International Airport (NAIA) as the Chief Executive is expected to witness the signing of the concession on Monday.

The Department of Transportation (DOTr) is signing the 15-year concession for the rehabilitation of NAIA on March 18, booking the President’s home as the venue for the event.

The DOTr also confirmed that the President will witness the signing of the largest public-private partnership (PPP) project so far under his administration, valued at P122.3 billion.

The SMC SAP & Co. Consortium won the bidding for the contract to operate and maintain NAIA. The group landed one of the most prized PPPs after committing to share 82.16 percent of revenue from NAIA operations with the government.

The signing of the concession agreement means the group complied with all of the post-bidding requirements of the DOTr, and that it can begin the transition program for the airport.

For the DOTr, the goal is to turn over the operations and maintenance of NAIA to the SMC-led group on or before Sept. 11.

Under SMC’s control, NAIA is expected to increase its passenger capacity to at least 62 million per annum, and this would require investments in new equipment and facility expansion.

The concessionaire will be granted a minimum of 15 years to rehabilitate the airport, and will get an extension of 10 years if its performance as operator stands out. The group committed to invest at least P122.3 billion, or P4.89 billion a year, during the 25-year concession.

In return, the government expects to raise more than P900 billion in revenue from the turnover of NAIA to the SMC-led consortium. The government will be paid P30 billion in upfront fee and an annuity cost of P2 billion, on top of its 82 percent share in earnings from NAIA operations.

For SMC, adding NAIA to its portfolio strengthens its aviation business, as it is also building the New Manila International Airport in Bulacan set to open by 2028.

The consortium set to operate and maintain NAIA is owned 33 percent by San Miguel Holdings Corp., 30 percent by RMM Asian Logistics Inc., 27 percent by RLW Aviation Development Inc. and 10 percent by Incheon International Airport Corp., operator of South Korea’s main gateway.