The national government on Monday officially signed the concession agreement with San Miguel Corp. for the improvement of Ninoy Aquino International Airport (NAIA).
This agreement grants the New NAIA Infra Corp. a 25-year concession to rehabilitate and enhance the airport’s functionality, with the aim of improving its overall services and infrastructure, increasing its passenger capacity from 35 million to 62 million annually, and lifting tourism arrivals.
The government is expected to generate approximately P36 billion per year in revenue from the privatization of NAIA over the 25-year concession. This amount includes the San Miguel Group’s upfront payment of P30 billion, annual fixed annuity payment of P2 billion, and 82.16% government share.
Manila International Airport Authority General Manager Eric Jose Ines stated that rehabilitating NAIA, which is currently considered one of the worst airports in the world, requires a massive budget that the MIAA doesn’t have.
He explained that their budget is insufficient as they remit a certain percentage of their revenue to the National Treasury.
Ines expects increased rates for NAIA concessionaires, which are still being finalized. He also revealed that discussions with the SMC-led group are still ongoing, including the decision on whether an airline plans to introduce a flight via NAIA.
According to Ramon Ang, the SMC top honcho, their vision for NAIA goes beyond mere rehabilitation. Together with their partner, Incheon, they have assembled a team of experts focused on implementing immediate improvements to help them achieve their long-term goal for NAIA.
Transport Secretary Jaime Bautista mentioned that the NAIA Public-Private Partnership Project (PPP) sends a strong signal to the international business community of the viability of government infrastructure projects.
However, he also emphasized that this radical transformation comes at no small price, and substantial investments in infrastructure and technology will necessitate collaborations with local and foreign partners.
