Neda Board OKS Naia rehab plan
P102-B proposal to double congested airport’s annual passenger capacity to 65M
Further improvements at the Ninoy Aquino International Airport (Naia) are a step closer after the National Economic and Development Authority (Neda) Board on Friday greenlighted the unsolicited offer of seven tycoons to rehabilitate the country’s main gateway tagged in the past as among the world’s worst airports.
Finance Secretary Carlos G. Dominguez III confirmed the approval of the P102-billion proposal of the so-called Naia Consortium, which, in partnership with a unit of Singapore’s Changi Airport Group, sought to modernize, expand and operate the country’s busiest airport under a 15-year concession period.
Naia Consortium groups Aboitiz Equity Ventures, Alliance Global Group Inc. of tycoon Andrew Tan, Asia Emerging Dragon of taipan Lucio Tan, Ayala Corp., Filinvest Development of the Gotianuns, JG Summit of the Gokongweis and Metro Pacific Investments Corp. of businessman Manuel V. Pangilinan.
The rehabilitation proposal included doubling Naia’s annual passenger design capacity to 65 million as well as jacking up aircraft movements to 52 an hour.
The unsolicited public-private partnership (PPP) proposal would undergo a Swiss challenge—other companies can bid for the project and then the original proponent that submitted the unsolicited proposal will be allowed to match or submit a better bid before the project is awarded.
It took some time before the government approved the Naia rehabilitation project as the economic team wanted it to adopt the Clark International Airport operations and maintenance (O&M) contract as a template.
Given congestion at Naia, the government allowed new airport proposals in Bulacan and Cavite on top of the Clark airport in Pampanga.
Just this month, the economic team included the rehabilitation of Naia among the Duterte administration’s 100 flagship projects under the updated “Build, Build, Build” pipeline.
A number of big-ticket airport projects were also in the new “Build, Build, Build” list such as San Miguel Holdings Corp.’s P735.6-billion New Manila International Airport in Bulacan; Aboitiz Infracapital Inc.’s P25.5-billion upgrade, expansion and O&M of New Bohol (Panglao) International Airport; Mega 7 Construction’s P3.8-billion O&M and facility upgrade of Kalibo International Airport; Chelsea Logistics Holdings Corp.’s P48.9-billion development and O&M of Davao International Airport, and Aboitiz Infracapital’s P45.8-billion upgrade, expansion and O&M of Laguindingan Airport, among others.
All of these airport projects were unsolicited PPPS, showing the Duterte administration’s openness to tap tycoons’ deep pockets to help build massive infrastructure.
Socioeconomic Planning Secretary and Neda chief Ernesto M. Pernia had said that the government would appraise unsolicited PPP projects “in accord with the overall infrastructure plan, appropriateness and feasibility.”
In the updated “Build, Build, Build,” unsolicited PPP projects in the transport and mobility sector amounted to a combined P1.39 trillion or nearly a third of the total project cost of the 100 “flagship” projects worth at least P4.3 trillion.
In contrast, the previous Benigno Aquino III administration mostly solicited private participation for the PPPS in its pipeline.
There could be a lack of competition in unsolicited proposals as other parties would take time to prepare competing bids against and match those of the proponents who had the headway in terms of feasibility studies and crafting their actual proposal.
But last year, the PPP Center’s governing board issued a resolution guiding the management of unsolicited proposals to address problems encountered in the past such as the absence of proposed minimum performance specifications and standards, contracts lacking provisions required by law, incomplete feasibility studies, lack of clarity on the roles of agencies and lack of clarity on what constitutes government undertakings, among other issues.
At the start of the Duterte administration, its economic team shunned the PPP mode of implementing projects as they had lamented the process from project approval to implementation was slow during the previous administration.
To invite private sector participation in infrastructure development, Duterte’s economic managers nonetheless pushed for “hybrid” PPP under which the national government builds the projects, then bids out O&M to private firms.
It also encouraged pure PPP proposals to be pitched before local government units (LGUS) to support developments of provinces, cities, municipalities and barangay.
But with “Build, Build, Build” implementation deemed slower than expected, the government changed its tune and was now more open to PPP proposals.
Presidential adviser for flagship programs and projects Vivencio Dizon had said the inclusion of more projects involving the private sector was a “testament that the government is not against PPPS as long as contacts are advantageous to the government.”
“The policy is now very clear about us wanting to ensure that PPPS [public-private partnership projects] do not have what we feel are disadvantageous provisions in the past like a lot of contingent liability exposure on the part of the government, a lot of automatic increases in user fees—those are things that we don’t want,” according to Dizon, who is also president and chief executive of the state-run Bases Conversion and Development Authority (BCDA).