DOTr still in talks with NAIA Consortium over airport rehab terms

Chrisee Dela Paz
DOTr still in talks with NAIA Consortium over airport rehab terms


The Department of Transportation says there are still 'many conditionalities' to be discussed, including payment to the government

MANILA, Philippines – A consortium made up of 7 of the country’s top conglomerates is expected to bag the original proponent status for the rehabilitation, development, operations, and maintenance of the Ninoy Aquino International Airport (NAIA) in two weeks’ time.

After the NAIA Consortium brought down the concession period to 15 years and the project cost to about P105 billion, Transportation Secretary Arthur Tugade said on Thursday, May 24, that he is still negotiating with the consortium.

“There are so many conditionalities, which we will discuss. How much do you pay the government for NAIA terminals 1, 2, 3, and 4? NAIA is cashflow positive. You are businessmen. [We had] positive cashflow last year – P7 billion,” Tugade told reporters on the sidelines of the Asia CEO Forum in Pasay City.

Once the Department of Transportation (DOTr) formally grants the original proponent status, the NAIA rehabilitation proposal will be up for approval of the National Economic and Development Authority (NEDA) Board.

Following NEDA Board approval, the proposal must then undergo a Swiss challenge. Based on government regulations, other private investors can submit competing offers under a Swiss challenge, while the original proponent will be given the right to match them. 

“In other words, what am I trying to say? I know [NAIA’s] cashflow can support development. So if you want to develop, make sure you have payments to make after,” Tugade said.

The NAIA Consortium originally proposed to rehabilitate, develop, operate, and maintain NAIA for 35 years and for P350 billion. But after its initial discussion with the DOTr, the group decided to significantly reduce the cost and period.

“They changed it from 35 years to 15 years. Is that acceptable? We are discussing it. We are having negotiations, that is why we cannot say it for now. It depends on what will happen,” Tugade said in Filipino.

The 7 partners are Aboitiz InfraCapital Incorporated, AC Infrastructure Holdings Corporation, Alliance Global Group Incorporated, Asia’s Emerging Dragon Corporation, Filinvest Development Corporation, JG Summit Holdings Incorporated, and Metro Pacific Investments Corporation.

The proposal of the NAIA Consortium is being challenged by listed Megawide Construction Corporation and its Bangalore-based partner GMR Infrastructure Limited, which is proposing to rehabilitate NAIA for P155.9 billion and 18 years.

Under the implementing rules and regulations of the Build-Operate-Transfer (BOT) Law, the first complete proposal should be evaluated and decided upon. The second complete proposal will only be entertained if the first one is rejected. 

In this case, the NAIA Consortium submitted an airport proposal earlier than the Megawide-GMR group. (READ: EXPLAINER: Not all projects are eligible for a Swiss challenge) –

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