The government will require the winning bidder for the multibillion-peso Ninoy Aquino International Airport (Naia) redevelopment deal to make an upfront payment — initially pegged at P30 billion.
Department of Transportation (DOTr) Secretary Jaime Bautista said this premium payment, which is typical for public-private partnership (PPP) deals even during the past two administrations, was triggered by the demand for the project.
“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,” he said.
Bautista noted that the government is still studying how much upfront payment will be required from the bidders, but initial discussions point to P30 billion.
“Part of the terms of reference is a so-called upfront payment. We are still finalizing the amount, but we are initially looking at P30 billion,” he said.
He defended this provisional requirement by saying that the proponent of the unsolicited proposal called Naia Masterplan even offered as much as P55 billion just to snag the deal.
Manila International Airport Consortium (Miac) is composed of six of the Philippines’ largest conglomerates, namely Aboitiz InfraCapital Inc., AC Infrastructure Holdings Corp., Asia’s Emerging Dragon Corp., Alliance Global – Infracorp Development Inc., Filinvest Development Corp., and JG Summit Infrastructure Holdings Corp.
Its P267-billion, 25-year-concession proposal was placed in the back burner after the National Economic and Development Authority (Neda) approved the P170-billion Naia Rehabilitation Project under a solicited scheme.
Bautista noted that aside from the upfront payment, the government will be adding an “investment component” in the terms of reference for the Naia Redevelopment Project.
“There is a commitment to spend a certain amount of money for infrastructure. We have a mandatory infrastructure that should be implemented within the next five years, which could reach P100 million to P130 million the investment in the next three to five years,” Bautista said.
Bautista aims to have the terms of reference for the deal published by August and accept bids as early as end-October.
By the end of the year, the transportation chief expects to have the project awarded, and financial closing should be done “a few months later.”
“This is one project for the airport that we think will be implemented soon. 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,” he said.
Bautista said the government has conducted a market-sounding activity already and has received feelers from prospective bidders both here and from other markets.
He did not name any of them.
Miac has yet to decide whether it will join the auction for the solicited project but has indicated that it stands by the more comprehensive offer that it submitted last month.