NAIA REHABILITATION. President Ferdinand R. Marcos Jr. (center, back row), House Speaker Martin G. Romualdez (left), and Executive Secretary Lucas Bersamin (right) witness the signing of the concession agreement between the government and SMC SAP & Co. Consortium for the rehabilitation and modernization of the Ninoy Aquino International Airport in a cermemony in Malacañang on Monday (March 18, 2024). Signing the agreement were (front row, from left) San Miguel Corporation President and CEO Ramon Ang, Transportation Secretary Jaime Bautista, and Manila International Airport Authority General Manager Eric Jose Ines. (Photo courtesy of Speaker Romualdez’s office)
MANILA – President Ferdinand R. Marcos Jr. on Monday lauded the signing of the PHP170.6-billion public-private partnership (PPP) modernization agreement for the rehabilitation of the Ninoy Aquino International Airport (NAIA), and called it "an investment in our future."
“This undertaking is not just about revenues that will be remitted to treasury alone, but resources invested in the airport and in many ways, it is an investment in our future,'' Marcos said after witnessing the signing ceremony in Malacañang for the largest solicited PPP project under his administration.
The President also noted that the modernization of NAIA will not only lead to additional revenue for the government but will also provide convenience to passengers by increasing the facility's current passenger capacity from 35 million a year to 62 million annually.
He also called on the consortium to “fulfill its commitment to this PPP project.”
The agreement, signed by Department of Transportation (DOTr) Secretary Jaime Bautista, Manila International Airport Authority General Manager Eric Ines, and San Miguel Corporation (SMC) President and Chief Executive Officer Ramon Ang, initially covers 15 years and could be extended by 10 years.
The consortium is composed of San Miguel Holdings Corp., RMM Asian Logistics, Inc., RLW Aviation Development, Inc., and Incheon International Airport Corp.
It bagged the contract to rehabilitate, operate, and maintain the country’s main gateway by offering the biggest revenue share of 82.16 percent to the government.
According to the DOTr, once the NAIA modernization is complete, its runway capacity will increase by at least 48 air traffic movements at the peak hourly rate.
Additionally, the project is expected to generate PHP900 billion of earnings for the national government or about PHP36 billion annually throughout its full 25-year concession period.
Much-needed improvement
Meanwhile, the Manila International Airport Authority (MIAA) said that privatizing the country's main gateway is indeed vital for its much-needed improvement.
NAIA is currently being managed by the Manila International Airport Authority (MIAA). The airport's operations and maintenance are expected to be handed over to the SMC-SAP & Co. Consortium, comprised of San Miguel Holdings Corp, RMM Asian Logistics Inc., RLW Aviation Development Inc., and Incheon International Airport Corp., in September.
"It's privatization is welcome, as there are many things that need to be improved -- old buildings, terminals, taxiways, runways, equipment. I thank President Ferdinand Marcos Jr. for prioritizing this project," MIAA Acting General Manager Eric Jose Ines told the Philippine News Agency in an interview over the weekend.
Ines said fixing the NAIA requires massive budget, which the MIAA doesn't have. "Our budget is not enough since we remit to the National Treasury a certain percentage of our revenue," he explained.
Ines said the rates for all NAIA concessionaires would increase, and still being finalized.
"We have informed our concessionaires about it last January. We consulted the ADB (Asian Development Bank) regarding this," he said, adding that the increase in rates is not immediate.
Ines also admitted some things are yet to be discussed with the SMC-led group including the decision if an airline wants to introduce a flight via NAIA.
Earlier, he also said that MIAA is in charge of the pest control and janitorial firm's contracts, but there are no talks yet regarding the process if the new operator would want to add or prefer different firms, for instance.
Economic benefits
Speaker Martin Romualdez said the signing of the landmark PPP agreement “demonstrate the unwavering commitment of the administration of President Marcos to fostering sustainable growth and innovation in our transportation infrastructure."
He underscored the potential of the project to elevate NAIA to world-class standards, enhancing its competitiveness and positioning it as a premier gateway to the Philippines.
“The revitalization of NAIA also promises broader economic benefits for our country and our people, including job creation, increased tourism, and greater connectivity with global markets,” Romualdez said.
He reiterated the government's dedication to fostering an environment conducive to private sector investment and collaboration, emphasizing the pivotal role of PPPs in driving infrastructure development across the country.
He also vowed the support of the House to ensure the successful implementation of the transformative project.
“We remain committed to working closely with all stakeholders to overcome challenges, uphold transparency, and deliver tangible benefits to the Filipino people,” he said.
Senator Grace Poe, for her part, lauded the signing of the concession agreement and described it as a “step in the right direction."
Poe, who chairs the Committee on Public Services, said the pact serves as a signal to the international community that the Philippines is ramping up its infrastructure development to welcome investments.
"As our gateway to the rest of the world, nothing showcases the potential of our country better than a well-maintained and operated international airport," Poe said in a statement.
"We are very hopeful that a reputable company like San Miguel in partnership with industry leaders from Korea will deliver the world-class airport our people deserve," she added. (With a report from Ma. Cristina C. Arayata/Jose Cielito Reganit/ Wilnard Barcelonia/ PNA)
