Philippines picks San Miguel-led group to upgrade NAIA

February 16, 2024 - 11:27 AM
An undated picture of the Ninoy Aquino International Airport Terminal 1. (Photo from Philippine News Agency)

(Updated 1:12 p.m.)

  • San Miguel-led group beats two other rivals
  • San-Miguel-led group offered government highest revenue share
  • Deal will nearly double airport capacity to 60 million passengers

 The Philippines‘ main international gateway will finally get a much-needed facelift after the government successfully bid out a $3 billion contract to modernise the airport, ranked as among the worst in the world.

The transportation ministry selected on Friday a consortium led by conglomerate San Miguel Corp SMC.PS as its preferred bidder to upgrade and operate the Ninoy Aquino International Airport (NAIA) in the capital Manila.

San Miguel’s group, which include South Korea’s Incheon International Airport Corp, prevailed over India’s GMR Airports Consortium and Manila International Airport Consortium after it offered the government the biggest share in airport revenues at 82%.

“Thanks to DOTR (transportation ministry) for choosing the best deal for our country,” San Miguel President Ramon Ang said ahead of the announcement.

Previous attempts to upgrade the airport, notorious for a regular occurrence of flight backlogs, and more recently power outages, have failed or abandoned because of disputes between airport authorities and contractors.

Modernizing the airport is among dozens of big-ticket projects the government is pursuing to overhaul and modernize its infrastructure. It is banking on private capital to fund many of these projects which include railways, ports, bridges.

“Thirty years in the making, we will (finally) be able to privatize the operations and maintenance of the Manila international airport,” Transportation Secretary Jaime Bautista told a media briefing.

Bautista said the 15-year concession agreement, which could be extended by another 10 years, would be signed with San Miguel within the next 30-days.

Under the deal, the winning bidder is required to nearly double the airport’s capacity to at least 60 million passengers annually from 32 million, and increase air traffic movements to 48 per hour from 30 to 40.

In 2019, the 600-hectare (6 sq km) NAIA handled a record 48 million passengers. Last year, it was hit by a massive power outage that jolted its air traffic control and disrupted 300 flights.

Airports are also being built in provinces surrounding Manila to relieve pressure, including in Cavite, and in Bulacan, which is also being constructed by San Miguel with construction firms that built Singapore’s Changi airport.

— Reporting by Neil Jerome Morales; Editing by Ed Davies and Stephen Coates