San Miguel-led NNIC settles P30B upfront payment after NAIA takeover

San Miguel-led New NAIA Infra Corp. (NNIC) has settled its P30-billion upfront payment to the government for its takeover of the Ninoy Aquino International Airport (NAIA), the Department of Finance (DOF) said Tuesday.

In a statement, the DOF said NNIC’s payment was remitted by the Manila International Airport Authority (MIAA) to the Bureau of the Treasury (BTr) and was subsequently cleared on September 16—two days after the operations and maintenance of the country’s premiere gateway were officially turned over to the private sector group.

Apart from the upfront payment, NNIC—formerly SMC SAP & Co. Consortium—has committed to provide a fixed P2 billion annual payment on top of the 82.16% national government share to revenues from operating NAIA, excluding passenger service charge.

Finance Secretary Ralph Recto welcomed the remittance of the upfront payment, which he said “will boost the government’s non-tax revenue stream without the need to impose new taxes on the people.”

“We are hitting two birds with one stone on this project. This will not only transform NAIA into a world-class airport but also guarantee the government a healthy income stream from the private sector operator,” said Recto.

“The P30 billion is just the upfront payment from the private sector partner. As the project finally takes off, the government is expected to generate roughly P900 billion in revenues from this deal over the entire term, which is a 15-year concession period, extendable by another 10 years,” he added.

“This will be equivalent to a revenue source of more or less P36 billion annually to fund more projects in education, public health, and infrastructure.''

The government signed the landmark concession agreement for the NAIA Public-Private Partnership (PPP) project on March 18.

Among the expected improvements in NAIA that the traveling public and other stakeholders can expect include expansion of the Passenger Terminal Buildings (PTBs), additional aircraft parking bays, an increase in vehicular parking slots, the installation of world-class systems and technology, more food and beverage (F&B) and retail options, and more convenient land transport connectivity, among others.

Flight delays and cancellations due to issues with airport facilities are also expected to be significantly reduced.

NNIC is investing approximately P144 billion to manage and improve NAIA.

The project aims to address the longstanding challenges of undercapacity, congestion, and underinvestment in the country’s main gateway.

NNIC’s NAIA rehabilitation project is expected to increase airport capacity from 35 million passengers annually to 62 million and expand air traffic movements per hour from 40 to 48.

NAIA has been plagued by commuter woes over the years, from faulty air conditioning to parking lot fires to complaints of bed bugs and rats.

In February, the NAIA was ranked "fourth worst airport in Asia," based on a survey done by a United Kingdom-based website. — VBL, GMA Integrated News