Gov’t strips off original proponent status of NAIA Consortium for airport rehab

Negotiations for the proposal of the country’s biggest conglomerates to rehabilitate, modernize and operate the Ninoy Aquino International Airport have collapsed after the government stripped off the original proponent status (OPS) it granted to the so-called NAIA Consortium.

This was confirmed to GMA News Online by Transportation Undersecretary for Planning and Project Development Ruben Reinoso on Wednesday.

Reinoso answered in the affirmative when asked if the Manila International Airport Authority (MIAA) has already withdrawn the OPS from the consortium.

This, after the NAIA Consortium, composed of AC Infrastructure Holdings Corp., Alliance Global Group Inc., Asia’s Emerging Dragon Corp., Filinvest Development Corp., and JG Summit Holdings Inc., announced in separate disclosures on Tuesday that the government scrapped proposed changes that would "ensure the bankability of the NAIA project."

Pangilinan-led Metro Pacific Investments Corp. was also part of the consortium until it pulled out in March.

The rejection of the proposed changes of the consortium is seen as a dead end for the proposed project, which had already undergone several modifications to comply with the government’s requirements.

“Unfortunately, the government indicated that it is not willing to accept most of the Consortium's proposed options and the Consortium can only move forward with the NAIA Project under the options it has proposed," the disclosures read.

"The far-reaching and long-lasting consequences of the coronavirus pandemic on airline travel, airline operations and airport passenger traffic necessitated a review of the assumptions and plans to ensure that the NAIA Project will be viable in the 'new normal'," the consortium said.

"The consortium proposed changes to update the NAIA Project's framework to ensure the bankability of the NAIA Project," it added.

The project has undergone several negotiations for its concession terms, including issues on sovereign guarantee.

The DOTr had asked the consortium to follow the Clark International Airport’s operations and maintenance (O&M) template, which covers provisions for “material adverse government action.”

The clause entitles project proponents to receive compensation from the government in cases of additional costs or revenue loss under a material adverse government action (MAGA) in the course of operations and maintenance.

In a separate text message, Transportation  Secretary Arthur Tugade confirmed that the NAIA consortium has also withdrawn its proposal —two years since it submitted an unsolicited bid.

The NAIA Consortium received the original proponent status (OPS) for the project in September 2018.

The group submitted an unsolicited proposal on Feb. 12, 2018, with the project cost initially pegged at P350 billion. It has since modified its submission and reduced the cost to P105 billion with a 15-year concession period.

Phase one of the project entails improving and expanding the terminals to increase the airport’s capacity to 65 million passengers. The project is expected to be completed in 48 months.

The second phase involves the development of additional runway, taxiways, passenger terminals, and associated support infrastructure.

In February, the DOTr said two issues still have to be clarified before the project could proceed— the planned bus rapid transit (BRT) and the supposed layoffs of the personnel of the Manila International Airport Authority (MIAA).

The announcement of removing NAIA Consortium’s OPS also came in time after Finance Secretary Carlos Dominguez III that the Transportation Secretary Arthur Tugade and Bases Conversion and Development Authority president Vince Dizon are in talks with “two more potential proponents for the NAIA project.”

“Apparently, these two other proponents are willing to get into agreement with the government which are very similar to the terms of the agreements between the project proponents in Clark Airport and BCDA,” Dominguez said.

While he did not identify the two companies, Megawide Construction Corp. and its consortium partner Bangalore-based GMR Infrastructure Ltd. have submitted a $3-billion unsolicited proposal for the rehabilitation and decongestion of NAIA in March 2018.

GMR-Megawide is the consortium that bagged the maintenance, operation, and rehabilitation of the Mactan-Cebu International Airport.

GMR-Megawide submitted the proposal weeks after the NAIA consortium filed its proposal and tapped the assistance of Singapore's Changi airport.

The DOTr has set aside the companies’ proposal in favor of the NAIA consortium. -MDM/LDF, GMA News