New NAIA terminal seen at Nayon site
By Nidz Godino
“The nation has unfortunately paid heavy price for that indecision,” President Ferdinand Marcos Jr.said new passenger terminal will rise at Ninoy Aquino International Airport (NAIA) in three years, as part of project of the new concessionaire led by San Miguel Corp. (SMC) to expand country’s premier gateway to accommodate growing demand for air travel.
SMC president and CEO Ramon Ang said project would enable Filipinos to feel benefits of privatizing NAIA as early as possible.
New NAIA Infrastructure Corp., headed by SMC, will put up new building near Terminals 1 and 2.
Ang said new terminal would be built on the site of abandoned Philippine Village Hotel within Nayong Pilipino complex. Terminal would have at least 50 concourses, after completion, would significantly push up capacity of airport in handling flights and passengers.
Ang said concessionaire has to secure approval of Department of Transportation and Manila International Airport Authority (MIAA) before it can proceed with the construction.
Concessionaire will also put up multipurpose building to serve as relocation site for airport regulators housed inside terminals.
By moving them to another location, Ang hopes to clear up to 30 percent of space at Terminals 1, 2 and 3 that can be used to accommodate passengers.
Building would also have parking spaces for as many as 9,000 vehicles.
Ang said concessionaire would resolve vehicle congestion at NAIA by as early as next year.
Operator will develop direct access road from NAIA Expressway (NAIA-X) to Terminal 3 to improve traffic flow within and around airport.
Goal is to enable motorists to go in and out of NAIA within 10-minute timeframe. SMC holds concession for Skyway System and NAIA-X, both linked to NAIA.
Ang also bared plans to employ digital system similar to the one being used in India, where travelers can scan their faces at home to speed up their pre-departure transactions at the airport.
Although tasked to change NAIA for better, Ang said concessionaire would preserve some elements at the airport. He also stressed he has no intention of renaming NAIA back to Manila International Airport, as proposed by some quarters, saying focus of privatization is on rehabilitation, not politics.
Financially, Ang said concessionaire is backed by at least five banks, mainly BDO Unibank Inc., largest in the Philippines in its P122.3-billion initiative to modernize NAIA. He shot down worries that group may suffer financial meltdown in the future.
New NAIA Infrastructure Corp., formerly SMC SAP & Co. Consortium, will remit to government 82.16 percent of revenue from airport operations as committed during bidding. This raised eyebrows of credit researchers like CreditSights, SMC’s finances might be hurt in the process.
In total, government will rake in as much as P900 billion from privatization of NAIA, comprising P30 billion up front, P2 billion in annuity cost and 82 percent revenue share.
Concessionaire, for its part, is tasked to handle NAIA for minimum of 15 years, extendable by 10 years, and is authorized to collect passenger service charges and other airport fees.
Over 25-year period, New NAIA Infrastructure Corp. will spend as much as P122.3 billion in rehabilitation and upgrade of airport.
At Malacañang, President Marcos witnessed ceremonial signing of NAIA-Public Private Partnership project concession agreement with SMC-led consortium.
In his remarks, FMJ said is happy to see airport modernization project “taking off” after more than 30 years of delay.
Signing agreement on P170.6-billion NAIA rehabilitation project were Transportation Secretary Jaime Bautista, MIAA general manager Eric Jose Ines and SMC’s Ang.
FMJ blamed delay in airport’s rehabilitation on “bureaucratic inertia, political turbulence and legal wranglings.”
“Reputation of this airport has been shredded, and let us be frank about it, not by bad press, but by its actual poor state… gateway that should be red carpet to our country has become dirty rug unfairly defines visitor’s first impression, main cause of Manila International Airport’s woes is no secret, it’s been operating beyond capacity for many years now, almost decade” Marcos said.
Restoration of NAIA should go beyond its physical design and structure, the President stressed.
“It requires major overhaul such as rehabilitation of passenger terminals, airside facilities, development of commercial assets and utility systems, provision of inter-modal and inter-terminal transport facilities,” he said.
Marcos called on SMC-led consortium to fulfill its commitments to the project, which he described as “investment in our future.”
NAIA rehabilitation project is expected to increase annual passenger capacity from 35 million to 62 million passengers, but we’ve seen it before, we’ve seen it in other airports…can really be done…and so, we can take lessons from all other experiences and best practices of other airports ,the President said.
Hourly air traffic movements would be increased from 40 to 42 per hour to 48 movements per hour, Marcos added.
However, he said smoother traffic should not happen on tarmac alone, but also along roads leading to airport.
“This time … time it takes to pick up passenger at curb or to find parking spot should be shorter than flight itself,” he said, noting that the country hopes to use Singapore’s model where passengers both of domestic and international flights “whiz out of the airport within 20 minutes…and so, this is… evolution we are trying to achieve… fast flow of passengers, arriving and departing, must be guaranteed inside terminal that is clean and comfortable,” he said.
Marcos also defended fast approval of NAIA rehabilitation project, saying it was “open, transparent and competitive.”
“For the record, this PPP project was evaluated within record-breaking seven weeks, making it fastest PPP proposal to be approved in history…but we did not sacrifice scrutiny for speed… fast, but it was also fastidiously examined every step of the way,” Marcos said.
Project will mobilize approximately P88 billion in capital investments within its first six years of operation, more than eight times disbursed capital investments for NAIA since 2010, the President noted.
Department of Transportation intends to turn over operations and maintenance of NAIA to SMC-led group on or before Sept. 11.
Members of the consortium, aside from San Miguel Holdings Corp. has 33 percent stake, are RMM Asian Logistics Inc. with 30 percent interest, RLW Aviation Development Inc. with 27 percent and Incheon International Airport Corp. of South Korea with 10 percent.
Also present at signing were Sen. Grace Poe, who chairs Senate committee on public services, Speaker Martin Romualdez and South Korean Ambassador Lee Sang-hwa.
Romualdez said NAIA rehabilitation project would be “boon” to country’s tourism and economy.
“Rehabilitation and operation of NAIA under this PPP framework demonstrate unwavering commitment of administration of President Marcos Jr. to fostering sustainable growth and innovation in our transportation infrastructure, this momentous occasion signals new era of progress and efficiency for NAIA,” he added.
He also said project would address “longstanding challenges and bottlenecks” hampered airport’s capacity to meet increasing demands of domestic and international travelers.
Department of Tourism also lauded coming rehabilitation of NAIA. “As the tourism sector continues to play pivotal role in the Philippines’ economic growth and development, modernization of NAIA reinforces this administration’s commitment to fostering conducive environment for tourism prosperity,” the DOT said.
It added project is aligned with National Tourism Development Plan for 2023 to 2028, aiming to elevate overall passenger experience and boost tourism.
Meanwhile, Senate unanimously passed on third and final reading measure creating Bulacan Airport City Special Economic Zone and Freeport, the original version vetoed by President Marcos on his first full day in office in 2022.
With 22 affirmative votes, zero negative and zero abstention, senators approved Senate Bill 2572 as sponsored by Poe.
“With this measure, Bulakenyos and rest of the country can now expect world-class economic zone that we can truly be proud of,” Poe said.
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