Is NAIA worth saving?

A partnership of six of the country’s biggest conglomerates, together with a globally-recognized airport operator, is saying that the Ninoy Aquino International Airport (NAIA) is worth saving to support tourism and economic growth.

As such, the group, calling itself the Manila International Airport Consortium (MIAC), submitted an unsolicited proposal to the Department of Transportation (DOTr) worth P267 billion to be spent over the 25-year life of a proposed build-operate-transfer (BOT) agreement.

The NAIA complex, consisting of three airport systems (NAIA-1, NAIA-2, and NAIA-3) is still the main gateway of the Philippines for domestic and international travel, although a new airport facility by a San Miguel Corp. affiliate located in Bulacan is expected to challenge this in a few years time.

In case there’s doubt in the wisdom of this new pitch to save NAIA, know that the consortium members are represented by the Aboitizes (Aboitiz InfraCapital), Ayalas (AC Infrastructure), Gokongweis (JG Summit Infrastructure), Andrew Tan’s Alliance Global-Infracorp), Filinvest, and Asia’s Emerging Dragon Corp.

For its technical partner representative, Global Infrastructure Partners (GIP) was included. The company reportedly brings with it remarkable experiences in the improved operations of the London Gatwick Airport, Sydney Airport, and Edinburgh Airport.

GIP’s assessment is that there is hope for NAIA, at least for the short-term term until ongoing developments of other nearby airports, including Clark and Subic, are completed, to ease the anticipated pressure of an expected travel explosion in the coming two to five years.

Open to challenge

Like previous earlier bids to rehabilitate NAIA, the MIAC proposal will be subjected to challenge by other interested private partnerships. Given the history of so many other companies who had in the past failed to have their proposals approved, don’t expect a hearty challenge to emerge.

Among it past challengers, San Miguel is now well on its way to building the New Manila International Airport with its 50-years BOT deal signed and sealed. The Megawide-GMR tandem, responsible for the successful Cebu International Airport upgrade, is also busy with other projects.

We can, however, give a grade of A for effort to the current MIAC consortium for resurrecting its 2018 bid, which was then submitted under NAIA Consortium minus Manny Pangilinan’s Metro Pacific and the technical assistance of Singapore’s Changi Airport.

The P350-billion unsolicited bid, after encountering so many problems and several challenges, had to be put on hold in 2020 after the pandemic lockdowns were declared. To be fair, even the challengers had to pull out their proposals too.

MIAC’s latest bid intentions had been refloated several months ago, but given the fatigue that has set in on other companies that submitted bids in the past, not many would want to dare raise even a squeak now.

The biggest hurdle, though, could be in the DOTr’s initial position that a 15-year BOT contract should suffice, one that could affect the economics that prompted the once-again gelling partnership of the six companies. The National Economic Development Authority had already approved the15-year BOT timeframe, so this might pose more delays.

Let’s not count out, though, a sweetener.

MAIC has generously dangled an upfront “incentive” payment of P57 billion to the national government, which their various spokespersons described as something that has never happened in the country’s PPP history, and which should be a great help in shoring up the state coffer’s struggling conditions.

The other condition that could merit a positive outcome to the consortium’s bid would be its closer ties to the powers. But that’s a topic that’s best fit for corridor talk.

Investment commitment

MAIC is committed to spend some P57 billion during the first five  years to boost NAIA’s current 31-million passenger capacity to 54 million per year, with the first visible gains expected to happen after two years.

About P154 billion will be spent during the next 20 years that will increase passenger capacity to 62.5 million a year by 2028, and 70 million yearly starting 2048. Most of the initial capital expenses will go for the development of the terminal floor area and the remaining to establishing air field facilities and improving cross-terminal operations.

GIP is of the opinion that NAIA’s current declared runway peak capacity of 41 air traffic movements (ATMs) can still be increased, banking on what it did at the Gatwick Airport where it was able to optimize just one runway to operate on 60 ATMs an hour from 55.

Let’s hope that new airport management knowledge can indeed do the trick. NAIA’s two runways have been subjected to numerous studies by different international funding agencies in the past, and one of the major conclusions was the need to build new airports outside of Pasay City where NAIA is currently situated because NAIA is beyond redemption.

Memories

For many Filipinos belonging to past generations, NAIA brooks many memories. It saw the first Filipino overseas job seekers off to countries they had only read about. It opened dreams of travel abroad for children who accompanied their proud parents off for a pleasure trip to exotic sounding countries.

Of course, NAIA also climbed the ranks of basher lists for its notoriously earned qualities, like when NAIA-1 was tagged in 2013 as the world’s worst airport. Or in 1983 as the site where Benigno Aquino Jr., the most known opposition leader of the current Philippine President’s father, was gunned down.

For close to more than nine decades, NAIA has grown to be an icon in Filipinos’ lives, and even if it loses its importance for future generations as new and better airports emerge, it will still have a special place in many others’ hearts.

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