By Lorenz S. Marasigan & Bernadette D. Nicolas
THE Naia Consortium lost the original proponent status for the unsolicited proposal to redevelop the Ninoy Aquino International Airport (Naia), and the government is now considering two other proponents for the said project.
Department of Transportation (DOTr) Undersecretary Reuben Reinoso said the Manila International Airport Authority (Miaa) has “withdrawn the original proponent status from the consortium.”
This development came a day after the consortium issued a statement that it can only move forward with the project if the government will agree to the terms that it has set, given the effect of Covid-19 on air travel.
Finance Secretary Carlos Dominguez noted that two other groups are similarly willing to undertake the project.
While Dominguez did not name the two proponents, he said these two have expressed interest with the project at the terms that the government has indicated.
“Apparently, these two other proponents are willing to get into agreement with the government, very similar to the terms of the agreements between the project proponents in Clark Airport and the BCDA,” he said, referring to the Bases Conversion and Development Authority. So, he added, “we are not worried about it. We believe these other two proponents are ready to step up to the plate here.”
The DOF chief said he got a copy of the letter of the Naia consortium, “saying that the current economic situation is such that they are not confident that they can finance the project. They cannot push it together, push through with it. However, let me say that I understand that the DOTr [Department of Transportation] under Secretary Tugade as well as Vince Dizon, who heads the infrastructure projects, are in conversation with two more potential proponents for the Naia project.” Dominguez made the revelations in a virtual press conference after the pre-State of the Nation Address forum of the Economic Development Cluster and Infrastructure Cluster on Wednesday.
The consortium had proposed in 2018 to modernize the international airport, main gateway to the Philippines, and then operate it for 35 years.
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 Infrastructure Holdings Corp.
However, the consortium said this week 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.”
Asked pointblank whether the government is now willing to set aside the Naia consortium’s proposal in favor of two other proponents, Dominguez said: “Well, we’re not setting aside the Naia Consortium. They’re the ones who set it aside, not us. But I’m telling you there are at least two more that are interested in the project at the terms that we have indicated.”
As for the other public-private partnership (PPP) projects, Dominguez said they have not yet heard from the proponents, but he said the Bulacan project will proceed as originally planned.
Despite the development with the Naia project, the country’s finance chief said the government will still push through with the Build, Build, Build program — the government’s massive infrastructure program — considering that this is the “better way to revive the economy” compared to giving dole outs amid the crisis.
“The Build, Build, Build program is the program that will help lift us up and help lift us out of this problem that we have. It will give people jobs, it will put money in their pockets. It will allow them to work. It will allow them to buy things to increase demand and other companies will benefit out of it. This is a better way to revive the economy, then to give handouts, at this point in time. So we will not slack down on the Build, Build, Build program,” he said.
In February, BusinessMirror reported that the unsolicited proposal for Naia rehabilitation, 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.
Clark airport
The Clark Airport template, meanwhile, provides for several government safeguards, including provisions for material adverse government action, and taxation, among others.
Reinoso, when sought for comment, said he is not aware of the two proponents mentioned by Dominguez. Assistant Secretary Goddess Hope Libiran, however, said her group “will identify after we have done the formalities of notice.”
Tuesday saw Naia Consortium issuing a statement that explained its position on the proposal. The members said they have submitted several options for the government to make the project bankable and economically viable.
BOT law
Under the implementing rules and regulations of the build-operate-and-transfer law, an implementing agency may reject an unsolicited proposal during the negotiation period, should the proponent and the agency have “irreconcilable differences.”
A letter of rejection, which should state the reason for the decision, should be forwarded to the proponent. Once done, the agency may accept a new unsolicited proposal for the similar project.
To recall, Megawide Construction Corp. and its partner GMR Infrastructure Ltd. also submitted a similar project to the transportation department in 2018.
Under its unsolicited proposal, the group proposed to spend $3 billion to redevelop and expand Naia.
The multibillion-dollar proposal is divided into several phases, of which the first six years of the operations would focus on the expansion of the existing terminals, the optimization of the current runways and the capacity expansion of the whole airport complex.
Immediately upon takeover, the group proposes to construct full-length parallel taxiways for both runways, an additional rapid-exit taxiway for the primary runway, the extension of a second runway and the provision of maximum aircraft stands.
These solutions will increase airfield capacity to 950 to 1,000 aircraft movements per day, a 35-percent increase from the current 730 aircraft movements daily.
Within the first two years, the group will rehabilitate and expand the existing terminals, which will roughly double the space and result in over 700,000 square meters of terminal area.
By that time, the airport will be able to handle as many as 72 million passengers annually, a huge jump from the current 30 million annual passenger capacity.
The old proposal carries a concession period of 18 years.
Image credits: Nonie Reyes