Still a no-go for Naia Consortium proposal | Inquirer Business

Still a no-go for Naia Consortium proposal

/ 05:12 AM July 05, 2019

The proposal of a group of tycoons seeking to operate and upgrade Manila’s Ninoy Aquino International Airport (Naia) remains unable to take off.

The National Economic and Development Authority (Neda) returned the P102-billion offer of the Naia Consortium and required another round of revisions, Reuben Reinoso, Undersecretary for planning at the Department of Transportation (DOTr), said on Thursday.

This came two months after Transportation Secretary Arthur Tugade said the proposal was acceptable.


The development spells further delays for the project, which aims to increase capacity and flights to ease worsening congestion in Naia, the Philippines’ busiest air gateway.


Tugade said in May that he was targeting to award the project in 90 days, or by August this year. That goal is now out of reach since the proposal still requires the approval of the Neda Board and a competitive challenge, which takes at least 60 days.

The DOTr recently revealed a new policy requiring unsolicited offers for existing airports to use the Clark International Airport operations and maintenance (O&M) contract as a template for all similar deals.

Tugade said using a template would cut down the negotiation period for unsolicited offers. He added that proposals that would fail to comply would be rejected.

A Naia Consortium spokesperson was unable to immediately comment on Thursday. Lance Gokongwei, CEO of consortium member JG Summit Holdings, told reporters on Monday they were “attempting” to meet these requirements.

The government considers the Clark Airport contract, bagged by a consortium led by JG Summit and Filinvest Development Corp. last December, as a good template due to the risks that were assigned to the private sector.

One of its features was the condition that will trigger compensation for the private concessionaire, otherwise known as a material adverse government action (Maga).


In the Clark Airport contract, the Maga will cover only executive orders and not the impact of any change in future laws. Companies accustomed to doing business in the Philippines deemed this a major risk.

But an industry source said the Clark Airport O&M had a different risk profile. For one, it is a hybrid Public-Private Partnership project where the capacity expansion was bid out separately from the O&M component.

Naia Consortium’s offer, which was first submitted in February 2018, combines a 15-year O&M period and the development of added capacity to alleviate congestion in Naia’s passenger terminals and runways.

Apart from the Naia Consortum, Reinoso said all other unsolicited offers for provincial airports were returned to their proponents as these would also need to conform to the Clark Airport concession.

He said San Miguel Corp.’s Bulacan Airport proposal was not covered by this policy because this was a new facility and not an existing gateway.

Since the start of the Duterte administration, five business groups have made unsolicited bids for nine existing provincial air gateways.

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Naia Consortium’s members include Ayala Corp.,  Aboitiz Equity Ventures,  Alliance Global Group Inc., Asia Emerging Dragon, Filinvest Development, JG Summit and Metro Pacific Investments Corp. Its technical partner is Singapore’s Changi Airports International.

TAGS: NAIA Consortium, Ninoy Aquino International Airport (NAIA), Reuben Reinoso

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