Government ends airport rehab talks with NAIA Consortium

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NAIA Terminal 3
NAIA Terminal 3

The Manila International Airport Authority (MIAA) has terminated its negotiation with the NAIA Consortium to rehabilitate Ninoy Aquino International Airport (NAIA).

Upon recommendation of the NAIA Government Negotiating Panel, MIAA on July 7 also withdrew/revoked NAIA Consortium’s original proponent status (OPS) for the project, the Department of Transportation (DOTr) said in a statement.

The termination of negotiations was recommended after the Consortium, in a letter sent to the National Economic and Development Authority (NEDA) on July 6, 2020, expressed difficulty obtaining project financing under the terms approved by the Investment Coordination Committee (ICC) and the NEDA Board unless such terms are revised in accordance with their proposal contained in a letter dated June 5, 2020.

In a press statement on July 7, NAIA Consortium members said their proposal to update the project’s framework ensures “bankability of the NAIA Project.”

“The far-reaching and long lasting consequences of the coronavirus pandemic on airline travel, airline operations and airport passenger traffic necessitated a review of the assumptions and plans to ensure that the NAIA Project will be viable in the ‘new normal’,” the Consortium said.

“Unfortunately, the government indicated that it is not willing to accept most of the Consortium’s proposed options and the Consortium can only move forward with the NAIA Project under the options it has proposed,” it added.

The Consortium said it “remains committed to support the government’s pursuit to implement its strategic infrastructure projects through public-private partnership to jumpstart the recovery of the economy, including the building of an international gateway that will reflect the growing and modernizing economy of the country.”

The NAIA Consortium—composed of Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corp., Alliance Global Group, Inc., Asia’s Emerging Dragon Corp., Filinvest Development Corp., JG Summit Holdings, Inc., and Metro Pacific Investments Corporation (MPIC)—submitted an unsolicited proposal in 2018 to rehabilitate, upgrade, expand, operate, and maintain the country’s main air hub for 15 years.

MPIC last March, however, pulled out of the project due to unresolved issues related to the proposal, including on the matter of real property tax.

READ: Pangilinan’s Metro Pacific exits P102B NAIA rehab plan

The NAIA Consortium was granted original proponent status in August 2018 after it submitted its proposal in February 2018. In July 2019, however, the proposal was returned for revision following a decision to require all proponents of unsolicited airport projects to pattern their concession agreements after the operation and maintenance contract of Clark International Airport.

The unsolicited proposal was approved by the NEDA Board in November 2019.

READ: NAIA, Panglao airports among NEDA Board-approved transport projects

Aside from NAIA Consortium, another consortium, that of Megawide Construction Corp and India’s GMR Infrastructure Ltd., has also submitted an unsolicited proposal to decongest and rehabilitate NAIA for an estimated project cost of US$3 billion (about P156 billion).