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Manila Bulletin devider Philippines devider National devider DOTr: Gov't to earn P900 B from NAIA privatization; improved services expected

DOTr: Gov't to earn P900 B from NAIA privatization; improved services expected

Published Feb 18, 2024 04:06 am

The national government is expected to earn around P900 billion from the privatization of the Ninoy Aquino International Airport (NAIA), the Department of Transportation (DOTr) said on Sunday, Feb. 18.

In a statement, the DOTr said the government’s Public-Private Partnership (PPP) with the SMC-SAP Co. Consortium will bring in P36 billion every year within the 25-year concession agreement.

The figure is way higher than the yearly P1.78 billion remittance of the Manila International Airport Authority (MIAA) for the NAIA operation from 2010 to 2023, according to the DOTr.

On Friday, Feb. 16, DOTr Secretary Jaime J. Bautista announced that a Notice of Award was given to the SMC-SAP Company Consortium after it submitted the highest revenue share at 82.16 percent.

The DOTr started facilitating the NAIA privatization in February last year and began the bidding for the rehabilitation, operation and maintenance six months later.

The privatization has been proposed over the years amid the negative ratings that the NAIA obtains in world rankings of the best airports in the world, which is seen as a major setback amid the country’s push for tourism.

The last major capacity expansion of NAIA was in 2008, when its Terminal 3 was operationalized, leading to its current capacity of 35 million passengers annually.

Bautista said the NAIA privatization is expected to improve passenger experience at the airport, achieve more efficient operations, and expand airport capacity.

“The modernization of the country’s main gateway is expected to pay instant dividends as the concession is expected to bring in P900 billion of earnings for the national government. The NAIA PPP, over the course of its 25-year agreement with the winning concessionaire, will allow the government to earn P36 billion annually and redirect its earnings to other social and infrastructure projects,” the DOTr statement read

“With Friday’s announcement of the winning concessionaire for the NAIA modernization, the government would secure from the SMC-SAP Co. Consortium a guarantee of P30 billion as upfront payment and P2 billion annual payments,” it added.

Improved services, technology advancement

The PPP is also expected to improve the facilities of the NAIA, especially in accommodating more passengers.

Bautista explained that they expect the alliance of the San Miguel Holdings Corp., RMM Asian Logistics, Inc., RLW Aviation Development, Inc. and Incheon International Airport Corp. to do well, noting the experience of the Incheon International Airport Corp. in handling airport operations.

DOTr Secretary Timothy John Batan said there are performance indicators that were specified in the agreement, particularly on the comfort of the passengers—from parking, lining up to the immigration and check-in counters, availability of escalators and elevators and others.

“As ridership goes up, the concessionaire has to adjust. That includes building things for the expansion of terminals, and operating things and putting in technology,” said Batan.

Jobs will be retained

As to the affected employees, Bautista said they expect them to either join the winning bidder or remain with the MIAA as a regulating agency.

“Those who will are involved in the operations will be absorbed by the concessionaire while those involved in regulations will stay with MIAA. We have already identified all of them and it is just a matter of talking to them,” said Bautista.

End-user impact

MIAA General Manager Eric Jose Ines said the impact on the end-users under the new concessionaire was already discussed in the series of consultations and dialogues with various stakeholders.

“When we try to compute it, it’s not really so much. Actually the MIAA has not raised (the fees) since April 2000 so we thought that it’s about time to raise in accordance with what was already computed,” said Ines.

Ines said the increase is expected to raise in terms of the rentals, navigation charges and other fees that are usually charged at the NAIA.

As to the passenger terminal fees, Ines said there will be no changes as far as he knows.

Related Tags

NAIA privatization DOTr
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