Tugade to NAIA Consortium: Talks over if deal not reached by April 30

Aika Rey
Tugade to NAIA Consortium: Talks over if deal not reached by April 30
The NAIA Consortium, which is proposing to rehabilitate and operate the Ninoy Aquino International Airport, says it will comply with the deadline of Transportation Secretary Arthur Tugade

MANILA, Philippines – Transportation Secretary Arthur Tugade set an April 30 deadline for discussions on the proposal to rehabilitate the Ninoy Aquino International Airport (NAIA), saying the talks would be scrapped if no deal is reached by then.

In a briefing with reporters, Tugade said talks with the NAIA Consortium, made up of 7 of the country’s top conglomerates, have been dragging on.

“By April 30, ‘pag hindi pa tayo nagkasundo-sundo, eh gagawin na namin itong mga proyekto. [Department of Transportation] ang i-assign at gagawin na namin iyon,” he said.

(By April 30, if we haven’t reached an agreement, we will be the one to do this project. The Department of Transportation will be assigned and we will do it.)

Tugade said they have the option to tap into the DOTr’s budget to fund the rehabilitation of NAIA instead.

I will stop talking with them kung walang mangyari (if nothing happens). The option is available for government to do it,” he added.

The transportation chief also said that the NAIA Consortium’s proposal to set up a small-scale transit system that would connect terminals – called an automated people mover – is among the reasons why there have been lengthy discussions.

“They should speed up submitting their proposal on [the automated people mover],” Tugade said in Filipino, without elaborating on the rest of their talks.

Asked for comment, NAIA Consortium spokesperson Jimbo Reverente told reporters, “We will comply with the stated deadline of Secretary Tugade.”

In September 2018, the DOTr awarded the original proponent status to the NAIA Consortium for the rehabilitation, development, operations, and maintenance of the country’s main airport.

The consortium originally proposed a concession period of 35 years, with a total project cost of P350 billion. This has since been brought down to a P102-billion project spanning 15 years.

If approved by the DOTr and then the National Economic and Development Authority Board, the unsolicited proposal would undergo a Swiss challenge. With this procedure, the government invites private groups to make competing offers, while giving the original proponent the right to match them.

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

Asked whether the DOTr will entertain Megawide’s proposal instead, Tugade said, “We will cross the bridge when I get there.”

But Tugade noted that the DOTr has the prerogative to choose another proposal if talks with the NAIA Consortium collapse.

The 7 partners in the NAIA Consortium 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.

NAIA, designed to handle only 31 million passengers, is expected to accommodate 47 million in 2019. It accommodated a total of 42 million passengers in 2017, according to the Manila International Airport Authority. – Rappler.com

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.