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Tuesday, March 5, 2024

Winning bidder for NAIA operation to enjoy tax incentives

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The government will provide tax incentives to the winning bidder of the P170.6-billion deal to rehabilitate, optimize and maintain the Ninoy Aquino International Airport, documents show.

Based on the Project Information Memorandum for NAIA, the government offers key incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, which include income tax holiday for its four years of operation and thereafter five years of availment of enhanced deductions.

The winning bidder would also be exempted from customs duties for importing capital equipment, raw materials, spare parts and accessories made by registered business enterprises.

The project may also be entitled to non-tax incentives such as unrestricted use of consigned equipment, employment of foreign nationals in supervisory, technical or advisory positions for a period of not exceeding five years from its registration, extendible for limited periods and access to bonded manufacturing/trading system.

The winning bidder, however, will be required to pay an upfront payment of P30 billion to the government and a fixed annuity payment of P2 billion annually.  The government will also have a share of the gross revenue, excluding the passenger service charge (PSC) revenues, based on the percentage share bid by the concessionaire.

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Officials of the Department of Transportation said that as of Sept. 13, the project received interest from at least five potential bidders including San Miguel Corp., India’s GMR Group, Manila International Airport Consortium,  Spark 888 Management Inc. and Asian Airport Consortium.

The agency set the pre-bid conference on Sept. 22 and the bid submission on Dec. 27, 2023.

The DOTr and the Manila International Airport Authority (MIAA) serve as co-grantors for the project, which would have a 15-year concession and an option for a 10-year extension.  The agencies expect to award the contract by end-2023.

The NAIA project involves capital investment to improve the airport’s facilities in order to comply with International Civil Aviation Organization and other internationally accepted standards.

This means modernizing the terminals, optimizing and enhancing the capacity of the airport to 62 million passengers per annum, enhancing asset quality and passenger experience, improving the information and technology systems infrastructure and ensuring reliable operations over the period of the concession.

The concessionaire will be responsible for both landside and airside operations of the NAIA. It will be required to undertake works to enhance the compliance, safety and security of the airport, optimize and boost airport capacity to cater to the increasing air traffic, in accordance with objective parameters to be provided in detail in the concession agreement.

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