Megawide-GMR alliance submits P156B proposal to upgrade NAIA

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The consortium of Philippine-based Megawide Construction Corporation and India’s GMR Infrastructure Ltd. has submitted its unsolicited proposal on the decongestion and rehabilitation of Ninoy Aquino International Airport (NAIA), the project estimated to cost US$3 billion (about P156 billion).

The proposal submitted on March 1 to the Department of Transportation (DOTr) is aligned with the government’s strategy to develop a sustainable multi-airport system in the Philippines, consortium representatives said in a statement.

Apart from the GMR-Megawide proposal, a consortium of seven of the country’s biggest conglomerates has also submitted a P350-billion unsolicited proposal to rehabilitate NAIA.

“As an experienced private operator, we have a deep understanding of the problem experienced by NAIA and we would like to offer our take on the solution,” Louie Ferrer, one of the GMR-Megawide’s representatives, said.

“Our team has transformed Delhi International Airport, previously one of the world’s worst airports, into one that is consistently named among the top five best airports of the world,” Ferrer added.

“We have also transformed Mactan-Cebu International Airport, one of the Philippines’ previously overlooked airports, into the 2016 Best Regional Airport in Asia Pacific. We hope to contribute our knowledge from these projects to the development of our country’s main gateway.”

“It is vital to immediately decongest NAIA and maximize its potential in order to sustainably support the air traffic needs of the greater capital region,” he further explained. “A solution is urgently needed, which we in the private sector are willing to support and provide.”

The consortium said GMR-Megawide’s proposal is anchored on resolving NAIA’s limited airside capacity.

“NAIA’s most critical constraint is the limited airfield capacity, which limits its capability to accommodate more flights. It also has a reduced ability to control delays related to aircraft movement, thereby worsening terminal congestion,” Ferrer said.

The consortium said its proposal prioritizes airfield capacity development while simultaneously enhancing terminal comfort and efficiency.

“This is a technically responsive proposal. We have evaluated multiple options to enhance NAIA’s capacity and efficiency while reducing airside and landside congestion,” Ferrer said.

3-stage masterplan
“Our detailed masterplan takes into account all possible constraints in transforming a fully operational brownfield airport. It aims to maintain the high service levels expected of a world-class airport for the next 18 years,” Andrew Harrison, another consortium representative, explained.

The $3-billion proposal includes investment in all airside, terminal, and landside improvements, and is divided into three main phases: Phase 1a (year 1-2), Phase 1b (year 3-4), and Phase 1c (year 5-6).

Phase 1a includes improving NAIA’s airside capacity and implementing terminal improvements, while Phase 1b will introduce “key performance measures.”

Phase 1c involves building future capacity.

If the proposal is approved, the consortium said that, immediately upon takeover, it will enhance the capacity of the airside infrastructure by constructing full-length parallel taxiways for both runways; constructing additional rapid-exit taxiways (RETs) for the primary runway; extending the secondary runway; and providing the maximum number of aircraft stands.

Boosting capacity
GMR-Megawide believes these solutions will increase airfield capacity to 950 to 1,000 aircraft movements a day, a 30% to 35% increase from about 730 aircraft movements daily at present.
For peak hours, the consortium will increase NAIA’s peak-hour aircraft-handling capacity by 50%, or from 40 airplanes to 60.

Within 24 months of taking over operations, the consortium will also rehabilitate and expand the existing terminals, resulting in a doubling of the space to over 700,000 square meters of terminal area.

“At this stage of the proposal, our focus is to further improve passenger experience,” Harrison explained.

“We want to deliver an optimum level of service that adheres to standards set by the International Air Transport Association (IATA). These are the standards maintained at most world-class airports,” he added.

Once completed, both airside facilities and terminals will be able to handle a total annual throughput of 72 million passengers.

GMR-Megawide proposes a shorter concession term of 18 years, which it noted is “unprecedented in airport PPP (public-private partnership) projects of this size across the world.”

“However, we believe that such a concession term will balance two very important objectives: providing flexibility and time for the government to refine multi-airport system strategy while addressing NAIA’s immediate problems,” Ferrer said.

During the 18-year concession period, the consortium proposes to pay the government annual concession fees, which entails a revenue share with a guaranteed minimum revenue component. In full compliance with the Build-Operate-Transfer (BOT) Law, the proposal does not entail any subsidy, equity, or guarantee from the government or any concerned entity such as DOTr.
At the end of concession term, all assets will be handed over to the government absolutely free of cost, the consortium said.

The representatives also disclosed that they did consider the option of adding a third runway but Harrison said that after assessment, “the operational challenges associated with having an additional runway make this solution unviable.”

“It is our belief that the key to unlocking NAIA’s full potential is to optimize the efficiency of the existing airside infrastructure, which will add up to 50% more movements for NAIA,” he added.
The consortium has tapped the services of MITRE Corporation, an American authority on research and development, whose work supports the American Federal Aviation Administration.

“MITRE has decades of experience in studying and maximizing aircraft handling capacities at cross runway airports, which are common in the United States and similar to NAIA,” Harrison stated.