Megawide-led consortium taking over $2-B NAIA rehab

Published July 18, 2020, 10:00 PM

by Emmie V. Abadilla

It’s official. 

The Megawide Construction Corporation (Megawide) consortium, with its operating partner, GMR, has now picked up the rehabilitation of the Ninoy Aquino International Airport (NAIA) after the NAIA Consortium of the country’s seven largest conglomerates abandoned their US$2-billion (P102 billion) proposal to the government last week over fears the project will no longer be viable after the pandemic devastated the aviation industry.

The Manila International Airport Authority last Wednesday  (July 15, 2020) granted Original Proponent Status to GMR Megawide Consortium’s USD$3 billion redevelopment of NAIA.

The Megawide-led consortium is now awaiting the next steps from the Government.  

The consortium submitted its proposal for the rehabilitation of NAIA on March 1, 2018 to redevelop and rehabilitate the airport but the NAIA consortium beat it to the draw.

“The decongestion and rehabilitation of NAIA is vital to sustainably supporting the air traffic needs of our national capital region,” remarked Louie Ferrer, Megawide Managing Director for Transportation.  

“Megawide has always been supportive of our Government’s vision to improve and modernize the airport infrastructure in the Philippines,” he stressed.

Hence, “We are committed to bringing our experience in airport operations and management, and engineering excellence to the country’s main gateway.”

The GMR-Megawide proposal  is anchored on resolving what they perceive as the main issue faced by NAIA: capacity. 

The proposal prioritizes airfield capacity development while simultaneously enhancing terminal comfort and efficiency. 

Their US$3 billion investment includes all airside, terminal, and landside improvements. It is divided into three main phases.

Phase 1a (Year 1-2) will focus on boosting NAIA’s airside capacity and implementing terminal improvements.

Phase 1b (Year 3-4) will take NAIA to world-class efficiency standards by introducing key performance measures.

Phase 1c (Year 5-6) will build future capacity.

Immediately upon takeover, GMR MEGAWIDE will enhance NAIA’s airside infrastructure, which includes building full-length parallel taxiways for both runways, additional Rapid-Exit Taxiways (RETs) for the primary runway, extension of the secondary runway plus provision of the maximum number of aircraft stands.

GMR MEGAWIDE believes these solutions will increase airfield capacity to 950-1000 aircraft movements/day, a 30-35% increase from the current approximate of 730 aircraft movements/day. 

For peak hours, the consortium will increase NAIA’s peak hour aircraft handling capacity by 50%, from 40 to 60.

Within 24 months of taking over operations, the consortium will also rehabilitate and expand the existing terminals, which will roughly double the space and result in over 700,000 sq. m. of terminal area.  

Once completed, both the airside facilities and the terminals shall be able to handle a total annual throughput of 72 million passengers.

Furthermore, GMR MEGAWIDE proposes a shorter concession term of 18 years. “This concession period is unprecedented in airport PPP projects of this size across the world,” Ferrer acknowledged. 

 “Such a concession term will balance two very important objectives: providing flexibility and time for the government to refine multi-airport system strategy while addressing NAIA’s immediate problems.

Within the 18-year concession period, GMR MEGAWIDE proposes to pay the government annual concession fees, which entails a revenue share with a guaranteed minimum revenue component.

In full compliance with the Build Operate Transfer (BOT) Law, the proposal does not entail any subsidy, equity or guarantee from the government or any concerned entity such as the Department of Transportation (DOTr).

At the end of concession term, all assets will be handed over to the government absolutely free of cost.

The consortium of Megawide is the same entity behind the transformation of the multi-awarded Mactan-Cebu International Airport (MCIA), the country’s second largest airport. In 2018, 

Since the handover of operations in November 2014, passenger volume steadily increased from 4.5 million per annum to 12.7 million in 2019.   

 “Our team has transformed MCIA as primarily the country’s top tourism gateway. We aim to contribute our experience in airport development and value engineering to the long-awaited resurgence of NAIA,”  Ferrer pointed out.

 “We believe in the potential of NAIA and we see its vital role in our economy’s recovery and continuing development,” he underscored.

“As our main gateway, it is a symbol of our Philippine identity and its rehabilitation will be a big step towards achieving our vision of a First-World Philippines.”