The Manila International Airport Consortium (MIAC)'s multi-phased P267 billion Unsolicited Proposal (USP) for the rehabilitation and development of the Ninoy Aquino International Airport (NAIA), which is expected to have over P805 billion of value through a 25-year concession period, MIAC announced in its Monday, June 19, press briefing.

MIAC’s P267 billion proposal includes P 211 billion of capital investments, P57 billion of which will be rolled out over the first five years with the remaining P154 billion to be invested over the remainder of the proposed 25-year concession period.

The proposal also includes a P57 billion concession payment to the government—the largest ever upfront concession payment offered for a transportation PPP project in the country, whether solicited or unsolicited.

Beyond the P267 billion of upfront payment and capital investments, the government is also projected to receive an additional P280 billion over the course of the concession period from revenue sharing and taxes.

Apart from this, MIAC’s planned rehabilitation of NAIA is projected to generate P446 billion in gross economic value. This includes, in gross value basis, P100 billion from gross value-add in tourism activities, P152 billion from increased passenger comfort, P60 billion from passenger time savings, P65 billion from aircraft decongestion savings, and P65 billion from new local jobs.

MIAC members include six of the Philippines’ largest conglomerates - Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corporation, Asia's Emerging Dragon Corporation, Alliance Global - Infracorp Development Inc., Filinvest Development Corporation, and JG Summit Infrastructure Holdings Corporation.

The consortium's NAIA Masterplan (Masterplan), will more than double the declared capacity of the airport, from 31 million passengers per annum (MPPA) to about 70 MPPA in the long term.

The Masterplan has 3 key phases. Phase 1 will be implemented over the first two years and is intended to increase the capacity of the airport to 54 MPPA by 2025 and improve reliability, while reducing queuing times at various bottlenecks throughout NAIA.

Phase 2 will increase the capacity of the airport to 62.5 MPPA by 2028 through expansion and development of the terminal floor area, addition of airfield facilities and improvements in cross-terminal transportation.

Phase 3 will further increase NAIA’s capacity to approximately 70 MPPA by 2048, and consists of long-term expansion and development projects to further expand terminal space and airfield capacity.

“The Manila International Airport Consortium recognizes the immense task of transforming NAIA to meet the growing demands of Mega Manila air travel, not only in the here and now but also in the future,” says Kevin L. Tan, Chairman and President of Alliance Global - InfraCorp Development, Inc.

The Manila International Airport Consortium has submitted this Masterplan to DOTr and MIAA as part of its USP under the Public-Private Partnership (PPP) framework to introduce technological, structural and operational changes to the NAIA under a 25-year Concession Agreement.

The rehabilitation of NAIA is critical to meet a projected explosion in travel demand.

By 2028, it is projected that NAIA will welcome 55 million passengers—well above its declared capacity of 31 MPPA. Before the pandemic, NAIA had already breached this ceiling when it registered a peak of 47.9 million passengers in 2019.

Given that the MIAC USP has already completed its technical, economic, financial, value-for-money and ESG studies, the concession could be awarded this year by the Philippine government and the Masterplan can be implemented immediately and improvements being realized shortly thereafter.

“The MIAC USP represents the fastest route to the rehabilitation and modernization that NAIA urgently needs,” says Cosette Canilao, President and CEO of Aboitiz InfraCapital, Inc.

“NAIA’s importance and economic impact cannot be overstated, especially since it has an ecosystem of supporting infrastructure that would take decades for greenfield airport developments to replicate,” says L. Josephine Gotianun-Yap, President and CEO, Filinvest Development Corporation. “It is necessary for NAIA’s comprehensive modernization to happen in parallel with the development of greenfield airports.”

Also, “A government decision favoring a 25-year concession plan will show its commitment to attract strong foreign and local players for future PPP projects,” noted Jose Gabriel D. Olives, Chief Financial Officer, LT Group, Inc.

“An effort to ensure meaningful private sector participation in PPPs will benefit other projects in the future, as more private sector players will be enticed to participate.”

“The upfront concession payment can help strengthen the government’s fiscal position and address other critical priorities such as ongoing pandemic recovery efforts; growing consumer demands for safer, more convenient and efficient travel services; and tightening global financial conditions,” says BJ Sebastian, Senior Advisor, JG Summit Holdings, Inc. and Treasurer, JG Summit Infrastructure Holdings Corporation