CONGLOMERATE San Miguel Corp. (SMC) on Wednesday said it has a solid track record in delivering large-scale infrastructure projects along with a sizable war chest to build the world-class airport in Bulacan province.
Ramon S. Ang, SMC president and COO, said the company has—over a short period of time—proved it has the muscle to carry out the infrastructure project, building mostly expressways and bridges, such as the Ninoy Aquino International Airport (Naia) Expressway and the Tarlac-Pangansinan-La Union Expressway.
“We believe our years of experience in building and operating major infrastructure projects are a key advantage when it comes to executing on this vital, ambitious project,” Ang said. “SMC has already undertaken a lot of major projects and have delivered on a number of them so the expertise, know-how and innovativeness are there. We also work with the best experts and contractors so when the time comes to start construction on the airport, we expect to hit the ground running,” he said.
SMC’s previous projects, which included the Boracay Airport runway expansion, Skyway improvement and its connector road linking South Luzon Expressway to its northern counterpart, were worth more than P700 billion.
Ang said they were able to raise such fund over the years and they can raise it again to fund a single project.
San Miguel Holdings Corp., the infrastructure arm of SMC, manages the country’s largest infrastructure network. Its ongoing projects include the MRT 7 project, Skyway Stage 3, and the South East Metro Manila Expressway and Slex Toll Road 4 projects. It also operates the Skyway system, the South Luzon Expressway and the Star Tollway.
In terms of financial capability, Ang said parent company SMC is backing SMHC for the airport project. The company concurred with a Department of Finance position that both companies sign a joint liability agreement. The project, estimated at close to $15 billion or about P800 billion, will be undertaken over a period of five to seven years to full completion. On average, spending spread is about P100 billion, at the level of the company’s cash from operating activities, on a simple annualized basis.
There is a substantial debt space to supplement cash requirements for SMC’s priority projects and those of its various business units. Its net debt to Ebitda ratio is also way below the company’s debt covenant of 5.5 times. Ang promises an airport with four parallel runways, expandable up to six, and modern, world-class facilities.
“Its impact to the national economy, even to the local economy of Bulacan and nearby cities and provinces, will be significant,” Ang said. It is expected to create one million jobs once construction starts.
Ang said the company also needs to expand roads or build new ones if necessary, a flood control project creating a spillway of the dams so that water from the nearby dams will flow directly to the Manila Bay and not flood the airport.