Duterte okays NAIA rehab project

Published November 29, 2019, 12:00 AM

by manilabulletin_admin

By Chino S.Leyco

President Rodrigo R. Duterte has given the green light to the unsolicited proposal from a consortium of big private businesses to modernize the aging Ninoy Aquino International Airport (NAIA), the Department of Finance (DOF) announced yesterday.

Overview of NAIA
Overview of NAIA

Finance Secretary Carlos G. Dominguez III said the ₱102-billion NAIA rehabilitation project was approved during the National Economic and Development Authority (NEDA) Board meeting chaired by President Duterte yesterday.

The unsolicited proposal was submitted by Ayala Corp., Aboitiz Equity Ventures, Alliance Global Group, Inc., Asia Emerging Dragon, Filinvest Development, JG Summit and Metro Pacific Investments Corp. that sought the operation and upgrade of Metro Manila’s main air gateway.

Just last month, the Duterte administration included the NAIA rehabilitation plan in its upgraded list of flagship infrastructure projects along with the ₱735-billion New Manila International Airport by the San Miguel Corp.

Under the proposal, the so-called “super consortium” will transform NAIA into a regional airport hub and expand its capacity to meet the anticipated growth in passenger traffic.

But before the NAIA rehabilitation plan received President’s approval, the project suffered delays after the government returned the consortium’s proposed concession agreement.

The private proponent needed to adjust its draft concession agreement submitted to the Department of Transportation to conform with the government’s new standard for unsolicited projects.

President Duterte has standardized and patterned all draft agreements on unsolicited proposals to the operation and maintenance contract of Clark International Airport which covers provisions for MAGA or material adverse government action.

Under the MAGA clause, proponents will only be compensated for adverse government action from the executive branch and not for any change in future laws.

If MAGA occurs during the operation and maintenance period, the project proponent is entitled to compensation equal to the additional costs incurred and/or loss of revenue.