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NAIA expansion project not yet awarded, says DOTr

  • Ninoy Aquino International Airport expansion project still being evaluated
  • Issues on financial capacity and joint liability needs to be addressed, DOTr earlier said
  • Megawide and GMR’s unsolicited proposal to decongest and rehabilitate NAIA will cost US$3 billion

NAIA Terminal 3

The Ninoy Aquino International Airport (NAIA) expansion project has not yet been awarded as the unsolicited proposal is still being evaluated, the Department of Transportation (DOTr) said in a statement.

“Allow us to set the record straight, once and for all, that there is no contract awarded yet, or any agreement decided upon, on the NAIA expansion project,” DOTr undersecretary for planning Ruben Reinoso, Jr. stressed in a statement issued to clarify “circulating misinformed reports” about the project.

Reinoso said the proposal is still for evaluation and approval by the National Economic and Development Authority (NEDA) Investment Coordination Committee (ICC) and the NEDA Board.

The ICC, chaired by the finance secretary, evaluates the fiscal, monetary and balance of payments implications of major national projects, and submits a recommendation to the NEDA Board, chaired by the President.

Last July, the consortium of Megawide Construction Corp. and India’s GMR Infrastructure Ltd. was granted original proponent status (OPS) to develop NAIA. This came after the government terminated negotiations with NAIA Consortium, which had proposed to rehabilitate the country’s main gateway.

Negotiations with NAIA Consortium bogged down after it wanted a revision of the project’s terms and conditions as approved by the NEDA-ICC and NEDA Board. The consortium said it would be difficult to find financing for the project under those terms.

For its part, Megawide and GMR had submitted in 2018 an unsolicited proposal to decongest and rehabilitate NAIA at an estimated cost of US$3 billion (about P156 billion).

Last August, however, DOTr said the consortium still needed to address issues such as on its financial capacity and joint liability in order for the project to proceed.

READ: NAIA project pending Megawide-GMR compliance with BOT Law

NEDA-ICC “noted a number of pending compliance with certain requirements of the BOT [Build-Operate-Transfer] Law so we have conveyed that to the proponent and we asked them to comply,” Reinoso said earlier.

The Manila International Airport Authority (MIAA) will be the primary grantor of the unsolicited proposal and the contracting party for the concession agreement should the deal get approved by the ICC and the NEDA Board, Reinoso noted. DOTr, as MIAA’s mother agency, only endorsed the proposal to the ICC, as protocols required.

Reinoso said MIAA will start negotiations with the proponent only when the terms have been defined and approved by the NEDA Board.

After NEDA Board’s approval, the unsolicited proposal will still undergo a Swiss challenge wherein other interested parties can make counter proposals, which the consortium, as the original proponent, can then match.

The consortium’s proposal has a concession term of 18 years and includes investment in all airside, terminal, and landside improvements. The project 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 is “taking NAIA to world-class efficiency standards by introducing key performance measures.” Phase 1c involves building future capacity.

If the proposal is approved, the consortium earlier said it would, immediately after takeover, 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.

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

The tandem of Megawide-GMR, through GMR-Megawide Cebu Airport Corporation, in 2014 won a 25-year concession to manage and develop Mactan-Cebu International Airport. The tandem in 2017 also won the contract to engineer, procure, and construct the Clark International Airport expansion project.

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