By Lorenz S. Marasigan and Cai U. Ordinario
NAIA Consortium, a group of conglomerates that proposed to redevelop the Ninoy Aquino International Airport (Naia), said on Tuesday it can only move forward with the project if and when the government accepts the “options” that it proposed.
In separate disclosures to the stock exchange, members of the consortium said they proposed “changes to update the Naia project’s framework to ensure the bankability” of the project.
“Unfortunately, the government indicated that it is not willing to accept most of the consortium’s proposed options and the consortium can only move forward with the Naia project under the options it has proposed,” the statement read.
The consortium had proposed in 2018 to modernize the international airport, main gateway to the Philippines, and then operate it for 35 years.
Initially, the development blueprint had a tab of P350 billion ($7 billion), later reduced to P102 billion ($2 billion) for a 15-year concession.
It said that Covid-19 has created “far-reaching and long-lasting consequences” on airline travel, operations, and passenger traffic. Thus, the project “necessitated a review of the assumptions and the plans to ensure that the Naia project will be viable under the new normal.”
“The consortium remains committed to support the government’s pursuit to implement its strategic infrastructure projects through public-private partnership to jumpstart the recovery of the economy, including the building of an international gateway that will reflect the growing and modernizing economy of the country,” the statement read.
Based on the Build Operate Transfer (BOT) Law Implementing Rules and Regulations (IRR), the agency and the original proponent of an unsolicited proposal have to conclude negotiations within a period of 80 days from receipt of the notice from the agency to commence negotiation.
“Negotiations shall focus on the project scope, implementation arrangements, reasonable ROR (rate of return) and other parameters determined by ICC (Investment Coordinating Committee)/Approving Body, and the terms and conditions of the draft contract for the Unsolicited Proposal, among others,” the BOT IRR stated.
However, the IRR provided that if there are “irreconcilable differences during the negotiation period, the Agency/LGU (Local Government Unit) shall have the option to reject the proposal.”
If this happens, the agency is mandated to advise the original proponent in writing stating the grounds for rejection. Once this is done, the agency may already accept a new unsolicited proposal for the project.
The IRR provides that the agency also has the option to bid out the project as a solicited proposal, or undertake the project on its own.
In February, BusinessMirror reported that the unsolicited proposal, which underwent several changes since it was first submitted a few years back, entailed increasing the capacity of the country’s main gateway to 65 million passengers per year.
Based on an indicative timeline, the P102-billion Naia rehabilitation will be implemented in three phases.
The first phase, which starts in 2021, will involve the reconfiguration of the existing airport terminals to increase their capacity to 47 million passengers annually from 31 million passengers per year currently. This will take a year to complete.
The second phase will see the development of a new passenger terminal building, annexing the second terminal of Naia. It will also expand the third terminal, improve the apron baggage and boarding areas, as well as upgrade the airside facilities through a new taxiway and modernized air-traffic management equipment.
With these improvements, the capacity of Naia by 2023 should be increased to 58 million passengers per year.
The third phase involves the construction of new terminals and the expansion of the existing ones to raise Naia’s capacity to 65 million passengers per year by 2024. It will also involve the development of airside facilities and upgrading works for general utilities, a car park area, passenger connection and miscellaneous facilities corresponding to the increased capacity.
The conglomerates in Naia Consortium are Aboitiz InfraCapital Inc; Alliance Global Group Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings Inc.; and AC AC Infrastructure Holdings Corp.
Image credits: Nonie Reyes
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