SMC-led group wins bid for NAIA privatization

A consortium led by San Miguel Corp. (SMC) together with the operator of South Korea's Incheon airport has bagged a 15-year concession to rehabilitate and run the Ninoy Aquino International Airport (NAIA), in a privatization tack that promises P900 billion in revenue for the government.

- ELIJAH FELICE ROSALES

SMC SAP & Co. Consortium yesterday received the notice of award to upgrade NAIA, marking one of the quickest privatization processes for any government asset in history, with the bidding lasting less than six months.

With the award, the group will manage the airport until 2039 in line with the 15-year concession granted by the Department of Transportation (DOTr).

This can be extended by up to 10 years depending on the performance of the consortium, which would be tasked to invest at least P122.3 billion - or P4.89 billion per year during a 25-year period.

For the first six years of the concession, the consortium would be required to spend a minimum of P88 billion for upgrading the services of the airport.

The consortium won the contract for offering the government the highest revenue share of 82.16 percent, beating rivals that tendered way below its offer.

GMR Airports Consortium was planning a 33.3 percent revenue share for the government, while the Manila International Airport Consortium pitched the lowest at 25.91 percent.

In total, the government expects to raise more than P900 billion in revenue from turning over the operations and maintenance of the country's premier gateway.