ADB pushes one-month extension for NAIA bids

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ADB pushes one-month extension for NAIA bids
NAIA Terminal 3. PortCalls photo.
  • The Asian Development Bank recommends extending by one month the bid deadline for the Ninoy Aquino International Airport rehabilitation project
  • Four out of six active bidders are seeking the extension, according to ADB
  • The extension would give bidders more time to prepare
  • Sticking to the December 27 deadline may limit submissions to only two bidders, the bank said
  • The new proposed deadline is January 29, 2024

The Asian Development Bank (ADB) is pushing for a one-month extension in the submission of bids for the Ninoy Aquino International Airport (NAIA) rehabilitation project.

In an internal communication, ADB proposed the extension to January 29, 2024 from December 27, 2023 to allow potential bidders more time to prepare, resulting in increased competition and a better financial outcome for the Philippine government.

Serving as the transaction advisor for the NAIA project, ADB emphasized that the extension aligns with the government’s commitment to encourage new players and foreign investment in Philippine public-private partnerships. The move is aimed at fostering competition without causing undue delays to NAIA’s modernization and the overall public-private partnership program.

Four out of the six active prospective bidders have formally requested the extension.

“They have asked for more time to request and analyze additional information from MIAA [Manila International Airport Authority] and DOTr [Department of Transportation], and to secure their internal corporate approvals, which will take longer in light of the upcoming holiday season,” ADB said.

Eight firms earlier bought bid documents for the project: Asian Airport Consortium, Turkish firm Cengiz Insaat Sanayi ve Ticaret A.S., South Korea’s Incheon International Airport Corp., India’s GMR Group, Turkish conglomerate Limak Holding A.S., Manila International Airport Consortium, San Miguel Corp., and Spark 888 Management Inc.

ADB said that if the December 27 deadline is kept, only two prospective bidders who have submitted unsolicited proposals for NAIA’s rehabilitation are likely to meet the timeline.

“We strongly believe that extending the bid submission date would attract more bids, thus resulting in greater competition and a better financial outcome for the government,” ADB said.

“It would also send a strong statement that the government is committed to ensuring a level playing field for all investors, now that recent reforms allow local and foreign investors to compete for NAIA on the same terms, without foreign ownership restrictions,” the bank added.

On August 23, the DOTr and MIAA began the bidding process for the contract involving the rehabilitation, expansion, and operation of NAIA. The project aims to address long-standing capacity issues, intending to increase the airport’s annual capacity to at least 62 million passengers from 35 million. The contract falls under a rehabilitate-operate-expand-transfer arrangement, as per Republic Act No. 6957, amended by Republic Act No. 7718.

The winning bidder will have 15 years to rehabilitate the airport’s passenger terminals and airside facilities, develop commercial assets and utility systems, and provide surface access facilities, among other responsibilities. The concession agreement also allows for a possible 10-year extension.

The concession agreement requires an upfront payment of P30 billion post-awarding of contract, fixed annuity payment of P2 billion annually, and a government share of gross revenue, excluding passenger service charge revenue, based on the percentage share bid by the concessionaire.

A pre-bid conference occurred on September 22, with the final bid bulletin and concession agreement expected to be issued on December 4 and the bid submission date scheduled for December 27, according to the DOTr Pre-Qualification, Bids and Awards Committee.