DOF receives P30b payment from SMC-led group which assumed operations, maintenance of NAIA
The Department of Finance received the P30 billion upfront payment from San Miguel Corporation-led New NAIA Infra Corp. (NNIC) after it formally assumed the operations and maintenance of Ninoy Aquino International Airport (NAIA) over the weekend.
Finance Secretary Ralph Recto confirmed the remittance of the upfront payment which is expected to "boost the government’s non-tax revenue stream without the need to impose new taxes on the people."
As part of the Public-Private Partnership (PPP) deal, the NNIC will also have to pay P2 billion annually, and 82.16 percent national government revenue share, excluding passenger service charges.
“We are hitting two birds with one stone on this project. This will not only transform NAIA into a world-class airport but also guarantees the government a healthy income stream from the private sector operator,” said Recto.
“The 30 billion pesos is just the upfront payment from the private sector partner. As the project finally takes off, the government is expected to generate roughly 900 billion pesos in revenues from this deal over the entire term, which is a 15-year concession period, extendable by another 10 years. This will be equivalent to a revenue source of more or less 36 billion pesos annually to fund more projects in education, public health, and infrastructure,” he added.
The Department of Finance said the NAIA rehabilitation aims to address the longstanding challenges of undercapacity, congestion, and underinvestment in the country’s main gateway is the largest PPP project under present administration with an estimated project cost of P 170.6 billion.
It noted that "the NAIA rehabilitation is expected to increase airport capacity from 35 million passengers annually to 62 million and expand air traffic movements per hour from 40 to 48."
It can be recalled that the NAIA rehabilitation project which was approved by the NEDA Board, chaired by President Ferdinand Marcos, Jr., on July 19, 2023 was the fastest approved PPP proposal in Philippine history.
The MIAA board awarded the contract for the project to the SMC-led consortium, which submitted the highest bid parameter on February 16, 2024. Robina Asido/DMS
