San Miguel Corp-Led Consortium Secures NAIA Privatization Deal

In a landmark move, the San Miguel Corporation (SMC)-led consortium has been awarded the privatization project for the Ninoy Aquino International Airport’s (NAIA) operations and maintenance, marking a significant milestone in Philippine infrastructure development. The announcement was made by Transportation Secretary Jaime Bautista, who identified the SMC-SAP & Company Consortium as the winning bidder for the P170.6-billion NAIA Public-Private Partnership (PPP) project.

The consortium, comprising San Miguel Holdings Corp., RMM Asian Logistics Inc., RLW Aviation Development Inc., and Incheon International Airport Corp., offered the government the highest share of its future revenues from the airport’s operations, at 82.16%. This bid outperformed those of the other qualified contenders, the GMR Airports Consortium and the Manila International Airport Consortium, who proposed revenue shares of 33.30% and 25.9%, respectively.

This PPP initiative is aimed at enhancing the NAIA’s facilities and services, ensuring it meets world-class standards. The Department of Transportation (DOTr) emphasized that the project’s key objective is to significantly improve the operational efficiency, passenger experience, and overall capacity of the country’s main gateway.

Under the agreement, the consortium is obligated to make an upfront payment of P30 billion to the government, followed by annual payments of P2 billion throughout the contract’s duration, in addition to over 82% of its gross revenues. The contract spans 15 years, with an option to extend for another 10 years, encompassing a comprehensive Rehabilitate-Operate-Expand-Transfer concession.

The DOTr anticipates the consortium will invest at least P122.3 billion in capital over the 25-year concession period, averaging about P4.89 billion per year. This investment promises to revitalize NAIA and ensure it becomes a source of national pride, offering “quick gains” such as improved parking availability, reduced waiting times, and enhanced facility reliability within the first year of operation.

The consortium’s takeover also ensures job security for current NAIA employees, who will either be absorbed by the consortium or the Manila International Airport Authority (MIAA), which will continue to serve as the airport’s regulator. However, passengers might expect adjustments in terminal fees and other charges as part of the modernization efforts.

SMC-SAP & Company Consortium’s commitment to transforming NAIA into a world-class airport aligns with the government’s vision of improving the country’s infrastructure and enhancing the overall travel experience for both locals and international visitors. The project is seen as a crucial step towards modernizing the Philippines’ transportation sector and boosting its competitiveness on the global stage.