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San Miguel leads tender for Manila airport rehabilitation
Consortium offers highest bid of 82.16% revenue share to the government
Patricia Chiu 15 Feb 2024

A consortium led by Philippine conglomerate San Miguel Corporation has emerged as the front-runner in the government auction to rehabilitate the country’s ageing international gateway, the Ninoy Aquino International Airport (NAIA).

During the opening and review of the financial proposals of the bidders for the airport rehabilitation project, a deal worth 170.6 billion pesos (US$3.046 billion), SAP Company Consortium offered the highest bid of 82.16% in revenue share to the government. 

The SAP Company Consortium is composed of San Miguel Holdings, RMM Asian Logistics, RLW Aviation Development and Incheon International Airport Corp. 

The two other qualified bidders are GMR Airports Consortium, made up of India-based GMR Airports International, Cavitex Holdings and House of Investments, which offered the government a 33.3% revenue share, and the Manila International Airport Consortium (MIAC), composed of Aboitiz InfraCapital, Ayala’s AC Infrastructure Holdings, Alliance Global-Infracorp, Filinvest and JG Summit Holdings, which put forth a 25.91% profit share proposition. 

The Department of Transportation, the agency in charge of the project, is set to issue a notice of award within the week, with the signing of the concession agreement slated for March 15. 

15-year deal

The ambitious project, which hopes to increase NAIA’s annual passenger capacity from 35 million to 62 million, will have a 15-year concession agreement with the winning bidder, a term that is extendable to another 10 years. 

In addition to the revenue share that the government will get from the project, the winning bidder will also be required to pay a fixed upfront fee of 30 billion pesos and annual fee of 2 billion pesos, both payable to the government.

Under the terms of reference, the percentage revenue share to the government is the main bid parameter for the auction, which implies that the SAP consortium is ahead.

In a statement following the public examination of the three respective bids, San Miguel president and vice-chairman Ramon Ang says his group is ready to take on the project to refurbish the Philippines’ main international airport. 

“Our aim is to elevate NAIA to world-class standard, ensuring an exceptional experience for all travellers with first-rate services and facilities. Our commitment is to ensure this project brings significant value and advantages to our nation, our government, and our kababayans [countrymen],” says Ang.

PPP project

The project will be the first major public-private partnership under the the administration of President Ferdinand Marcos Jr, after projects under the build-operate-transfer law stalled under his predecessor, Rodrigo Duterte.

The NAIA rehabilitation project started its life as an unsolicited proposal from the Aboitiz-led MIAC. While the proposal was evaluated by the Philippine government, the Marcos administration said in July 2023 that it would no longer entertain unsolicited proposals for the upgrade of the airport. Instead, the government said then that it would conduct a competitive bidding, effectively seeking solicited bids for the project. 

Other than the three qualified bidders, a fourth bidder, Asian Airport Consortium, was disqualified by the pre-qualifications, bids and awards committee because it failed to comply with the technical proposals for NAIA, according to the Department of Transportation.

Asian Airport Consortium is composed of Asian Infrastructure and Management Corp, Cosco Capital, Philippine Skylanders and PT Angkasa Pura II.

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