Finance Secretary Ralph Recto. | PHOTO: Bibo Nueva España/Senate PRIB
“We are hitting two birds with one stone on this project.”
Thus said Finance Secretary Ralph Recto of the Ninoy Aquino International Airport (Naia) Public-Private Partnership (PPP) deal awarded by the government to San Miguel Corp.-led New Naia Infra Corp. (NNIC).
“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,” Recto said in a statement on Tuesday.
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The Department of Finance (DOF) said that the P30-billion upfront payment by NNIC would boost the government’s nontax revenue.
The project is expected to generate P900 billion in revenue for the government over the 15-year concession period, which is extendable by another 10 years.
Concession begins
Last week, the NNIC took over the operation and maintenance of the Naia as the San Miguel-led group started its modernization efforts.
With an estimated project cost of P170.6 billion, the proposal to rehabilitate Naia is the largest PPP project under the Marcos administration. It is also expected to create at least 58,000 jobs for Filipinos.
Better gateway awaited
“The project aims to address the long-standing challenges of undercapacity, congestion and underinvestment in the country’s main gateway,” the DOF said.
Passenger volume at Naia reached 45.3 million in 2023, up by 47 percent from the previous year, making it the country’s busiest airport.
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Congestion at airports has been identified as the main cause of various issues, including flight delays, neglected facilities, inefficiency, mismanagement and even corruption.
The rehabilitation project 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,” DOF said.
NNIC secured the contract for the project by offering to allocate 82.1 percent of Naia’s revenues to the government. This proposal outpaced those of two other bidders, which proposed a respective revenue share of only 33.3 percent and 25.9 percent. INQ