The Department of Finance (DOF) said Tuesday the remittance of a P30-billion upfront payment from San Miguel Corp.-led New NAIA Infra Corp. (NNIC) for the Ninoy Aquino International Airport (NAIA) public-private partnership (PPP) project will contribute to the government’s non-tax revenue, eliminating the need for additional tax burden on the people.
“We are hitting two birds with one stone on this project. This will not only transform NAIA into a world-class airport but also guarantees the government a healthy income stream from the private sector operator,” Finance Secretary Ralph Recto said.
“The P30 billion is just the upfront payment from the private sector partner. As the project finally takes off, the government is expected to generate roughly P900 billion in revenues from this deal over the entire term, which is a 15-year concession period, extendable by another 10 years. This will be equivalent to a revenue source of more or less 36 billion pesos annually to fund more projects in education, public health, and infrastructure,” he said.
The remittance from the Manila International Airport Authority (MIAA) cleared with the Bureau of the Treasury (BTr) on Sept. 16, 2024, following the official turnover of the NAIA’s operations and maintenance (O&M) to NNIC on Sept. 14, 2024.
The proposal to rehabilitate NAIA, with an estimated project cost of P70.6 billion, is the largest PPP project under President Ferdinand R. Marcos Jr.
The project aims to address the longstanding challenges of undercapacity, congestion, and underinvestment in the country’s main gateway.
Led by the Department of Transportation (DOTr) and the MIAA as co-grantors of the solicited PPP, the NAIA rehabilitation is expected to increase airport capacity from 35 million passengers annually to 62 million and expand air traffic movements per hour from 40 to 48.
The project improves service by applying internationally benchmarked Minimum Performance Standards and Specifications and utilizes private sector expertise for modernization and capacity expansion.
The NAIA project was approved by the NEDA Board, chaired by President Marcos, on July 19, 2023. It was evaluated within a record-breaking six weeks––the fastest approved PPP proposal in Philippine history.
The Department of Finance’s (DOF) Privatization and Partnerships Group (PPG) is responsible for evaluating solicited and unsolicited PPP proposals, which undergo a rigorous screening process before they are submitted to the Investment Coordination Committee (ICC) and NEDA Board.
The MIAA board awarded the contract to the SMC-led consortium on Feb. 16, 2024, which submitted the highest bid parameter.
The proponent is providing a P30-billion upfront payment, a fixed P2-billion annual payment and 82.16 percent national government revenue share, excluding passenger service charges.
The concession agreement for the project was signed by the Department of Transportation (DOTr), the MIAA and the SMC-led consortium on March 18, 2024.
