Home » Aviation, Breaking News » Bulacan airport franchise gets Senate final nod

The Senate has approved on third and final reading a bill granting San Miguel Aerocity Inc. the authority to build, develop, and operate the New Manila International Airport in Bulakan, Bulacan.

With 22 affirmative votes and no negative vote, the Senate on October 12 approved the Lower House version, House Bill (HB) No. 7507, which grants a 50-year license as well as tax privileges to the subsidiary of San Miguel Corporation (SMC) for the construction, development, operation and maintenance of a domestic and international airport and an “airport city” in the municipality of Bulakan.

HB 7507 was approved on third and final reading by the Lower House on September 7.

READ: House clears franchise for San Miguel Bulacan airport

The bill also grants San Miguel Aerocity the right to construct, acquire, lease, operate or manage properties to implement the project, including toll roads, railroads, mass transit systems, hotels, warehouses, and other facilities.

It likewise exempts San Miguel Aerocity from paying all direct and indirect taxes and fees during the 10-year construction period, which is included in the 50-year franchise period. This exemption includes payment of income taxes, value-added taxes, percentage taxes, excise taxes, documentary stamp taxes, customs duties and tariffs; taxes on real estate, buildings and personal property, business and franchise; and supervision fees.

After the construction period and during the franchise term, the San Miguel Aerocity project will remain exempt from income tax and taxes on real estate, buildings and property.

The tax exemptions, however, will expire “as soon as it is determined by a competent authority that the grantee has fully recovered its investment cost.”

The Department of Transportation (DOTr) and San Miguel Aerocity in September 2019 signed the concession agreement for the project. This came after the notice of award was handed to SMC in August 2019 when its unsolicited proposal went uncontested.

Under the deal, San Miguel will finance, design, construct, supply, complete, test, commission, and operate and maintain the new international gateway.

The 50 year-concession period will start after construction of the project’s initial phase is completed. The project has a total cost of P735.63 billion under a build-operate-transfer arrangement.

The airport, to be built on a 2,500-hectare area in Bulakan, will have a passenger terminal building with a design capacity of 100 million to 200 million passengers per year, four parallel runways that are upgradable to six, and eight taxiways.

Construction of the unsolicited project was targeted to start by December 2019, but DOTr last July said SMC would start construction by October 2020.

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