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Consumer group seeks to invalidate provisions in NAIA takeover deal


Consumer group seeks to invalidate provisions in NAIA takeover deal

ConsumerUnion-Philippines Inc. on Wednesday filed a petition seeking to declare invalid certain provisions of the concession agreement implementing the Ninoy Aquino International Airport (NAIA) Public-Private Partnership Project, which transferred the operations and maintenance of the country’s main gateway to a San Miguel-led consortium.

The petition for declaratory relief was filed before the Regional Trial Court of Manila.

ConsumerUnion, in particular, sought the Manila court to declare the following:

  • That Section 1.1 of the Concession Agreement and Sections 4.2, 4.2.1, and 5.4 of the 2024 Revised MIAA AO are invalid, void, and illegal for being contrary to law and jurisprudence, insofar as they violate the PPP Code and the rule on delegation of powers;
  • That Section 3.1 of the 2024 Revised MIAA AO is void and illegal for being arbitrary and discriminatory; and
  • That Sections 24.3.2, 24.5, 24.5.1, 27.1.3, and 31 of the Concession Agreement are void and illegal for being against public policy.

The Department of Transportation, Manila International Airport Authority, New Naia Infra Corp. (NNIC), and the Office of the Solicitor General are named as respondents in the petition.

“We have not received a copy of the petition and it would be premature for us to comment at this time but while we respect their right to avail of judicial remedies and reliefs, we maintain that the entire process leading to the Concession Agreement including the AO1 rates, has been transparent and in accordance with law,” MIAA spokesperson Chris Bendijo said.

GMA News Online also reached out to NNIC for comment, but no response yet has been received as of posting.

The group argued that the provisions on Regulated and Non-Regulated Fees and Charges of the Concession Agreement and of the 2024 MIAA Revised AO “are void and illegal for being contrary to law and jurisprudence, arbitrary and discriminatory.”

The petitioner said the PPP Code “never empowered Implementing agencies, such as DOTr and MIAA, to grant their private partners an unbridled power to fix any kind or category of rate or charge.”

However, the group said that pertinent clauses in the Concession Agreement and 2024 MIAA Revised AO proclaim certain fees and charges at NAIA as “Non-Regulated Fees and Charges,” thereby allowing the NNIC to impose and collect the same without any government regulation whatsoever

The petitioner also argued that the rates imposed by the 2024 MIAA Revised AO are void for being “unjust and unreasonable.”

“The winning bidder, is prepared to deliver back to MIAA 82.16% of its gross revenues from its operation of NAIA is prima facie indication of the reason why draft rates that were eventually adopted in the 2024 MIAA Revised AO were too high, unreasonable, detrimental to the public and against public policy,” the group said.

ConsumerUnion added that the provisions on deficit payment of the Concession Agreement are “void and illegal for being against public policy.”

“It is against public policy and, therefore, illegal and void for DOTr and MIAA to agree, commit or guarantee, in a concession contract, that fees and charges for a public service facility (such as an airport), will be at a certain rate, and that the regulatory approvals for those fees and charges will be forthcoming and that failure to give the necessary approvals will result in liability on the part of DOTr and MIAA to NNIC,” it said.

“The provisions are not only grossly disadvantageous to the government but also a manifest violation of the Constitution,” it added.

NNIC, formerly SMC SAP & Co. Consortium, formally took over the operations of NAIA in September.

The San Miguel-led group emerged as the winner in the government-initiated bidding for the privatization of NAIA’s operations after it committed 82.16% of its gross revenues in operating the airport to the national government.

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

Among the expected improvements in NAIA are the 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.

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. — BM, GMA Integrated News