The Department of Transportation announced on Sunday that the NAIA modernization, under a 25-year agreement with the winning concessionaire, will enable the government to earn P36 billion annually, which can be redirected towards various social and infrastructure projects.

“The modernization of the country’s main gateway is expected to pay instant dividends as the concession agreement for the Ninoy Aquino International Airport (NAIA) Public-Private Partnership (PPP) is expected to bring in P900 billion of earnings for the national government,” DoTr said in a statement.

The government awarded on Friday a P170.6 billion ($3 billion) contract to upgrade and operate the aging Ninoy Aquino International Airport (NAIA), the country’s main international gateway, to a consortium led by billionaire Ramon Ang’s San Miguel Corporation.

The group, which includes South Korea’s Incheon International Airport Corporation, gave the government an 82.2% stake of NAIA income, far above the 33.3% portion given by India’s GMR Airports International, House of Investments, and Cavitex Holdings. The Manila International Airport Consortium, which includes Aboitiz Equity Ventures, billionaire Andrew Tan’s Alliance Global Group, Ayala Corp, Filinvest Development Corp, JG Summit Holdings Inc., and tobacco tycoon Lucio Tan’s Asia’s Emerging Dragon Corp, tendered a 25.9% stake.

Government turning to private sector for NAIA rehab

To reduce the government’s fiscal burden, the Philippines is turning to the private sector to rehabilitate NAIA, which has been named the world’s worst airport several times by the travel website Sleeping In Airports.

The contract, secured by a San Miguel-led consortium, calls for the NAIA to be rehabilitated and operated for 25 years, with the government receiving an astounding 82 percent of the proceeds.

“We are committed to collaborating closely with the government and our various stakeholders, harnessing every resource available to us, to transform NAIA into a modern international gateway that Filipinos will be proud of,” the consortium, in which San Miguel holds a 33% stake, said in a statement.

“Di naman siguro” – Sec. Bautista on losing bidders

“We need to improve NAIA,” Bautista said. “It’s a very congested airport.”

The Department of Transportation (DoTr) anticipates no difficulties in awarding the San Miguel Corp. consortium, the privatization contract for the NAIA.

When asked if the NAIA project would be blocked by losing bidders, Transportation Secretary Jimmy Bautista said: “Di naman siguro.”

“Before we made the award we notified the two other bidders who qualified and we informed them that we will award it today (February 16) to the winning bidder.” Bautista said in a press conference on Friday.

“Mukhang ok naman acceptance nila when I talked to them,” the transportation secretary stressed.

The successful bidder will be expected to pay the government an upfront fee of thirty billion pesos, and the transaction is expected to be completed within three to six months, according to Bautista. The government anticipates signing a concession agreement with the consortium within thirty days.

NAIA rehab not in conflict with Bulacan-based project

Prior to the epidemic, NAIA handled 48 million passengers in 2019, much beyond its 33.2 million capacity, and has struggled to keep up with the increased demand. In January 2023, a power outage forced the cancelation of almost 300 flights, stranding more than 65,000 people.

The project is for a 15-year concession deal with a 10-year option to extend it, as well as nearly increasing the airport’s yearly passenger capacity to 62 million.

Meanwhile, in Bulakan, Bulacan, around 44 kilometers north of NAIA, San Miguel is also constructing the 740 billion peso New Manila International Airport. According to Bautista, the nation needs as many airports as possible to accommodate the growing amount of air traffic in the country.

“The estimate is that by 2050, we will need an airport with the capacity of almost 100 million. So we really need another airport,” Bautista said. “I don’t think the operations of Manila International Airport will conflict with the Bulacan Airport.”