By Beting Laygo Dolor, Contributing Editor
The government has chosen Megawide Construction Corp. and its partner, India-based GMR Infrastructure, to take over the proposed US$2-billion upgrade of the Ninoy Aquino International Airport (NAIA), replacing the super consortium which last week gave up on the project.
If Megawide/GMR is able to finalize the deal, it will be the second airport project of the partnership after the Cebu International Airport. The partnership is also presently building a portion of the Clark International Airport terminal.
Megawide/GMR will, however, reportedly up the ante by increasing the cost of re-development to US$3 billion, or 50 percent higher than the original project proposal submitted two years ago but was abandoned earlier this month.
Megawide/GMR takes over as project proponent from the NAIA Consortium, comprised of seven of the country’s largest conglomerates, mostly owned and/or controlled by the Philippines’ top taipan families.
The contract with NAIA Consortium fell through after Finance Sec. Carlos Dominguez rejected proposed changes to the deal, which the super consortium said was necessary in light of the global Covid-19 pandemic that seriously affected the travel and tourism industry.
Megawide/GMR was one of two builders considered to take over the project, which itself had already been downgraded from the original contract price of PHP350 billion (US$7 billion) for a 35-year concession period, to the present PHP102 billion (US$2 billion), 15-year pact.
Once the Megawide/GMR proposal is finalized, however, it will still be subject to a “Swiss challenge,” from other contractors to undertake the same project at a lower cost or more favorable terms.
Since there are few companies that have the financial, as well as the expertise to complete such a project, it is believed that a Swiss challenge is unlikely for the NAIA upgrade.
As a publicly-listed company, Megawide disclosed to the Philippine Stock Exchange last week that it had been officially granted original proponent status.
According to Megawide managing Director for Transportation Louie Ferrer, “The decongestion and rehabilitation of NAIA is vital to sustainably supporting the air traffic needs of our national capital region.”
The Megawide/GMR proposal addresses the main problem facing the country’s premier airport — capacity. As such, the partnership’s proposal aims to prioritize air field capacity development.
They also seek to enhance terminal efficiency as well as comfort for travelers.
Ferrer also told local media that his company “has always been supportive of the government’s vision to improve and modernize the airport infrastructure in the Philippines.”
Megawide/GMR’s proposal includes all airside, terminal, and landside improvements, and is divided into three phases.
The first phase focuses on boosting the NAIA’s airside capacity and improving the terminal, while the second phase will take the airport to world-class efficiency standards by introducing key performance measures. The third phase will build future capacity.
Under their plan, airfield capacity is seen to improve by 30 to 35 percent per day, or from 730 aircraft to between 950 to 1,000 aircraft per day.
Once completed, the upgraded NAIA will be able to handle up to 72 million passengers per year.
Ferrer said, “We believe the potential of NAIA and we see its vital role in our economy’s recovery and continuing development.”
The planned upgrade of the NAIA has had a troubled history, going back as far as the time of former President Fidel Ramos.
The original project proponent was Asia’s Emerging Dragon Corp., which eventually joined the super consortium and submitted a new bid for the project two years ago. That organization’s proposal was based on the continued growth of air travel in the country, which was thrown into disarray by the ongoing global Covid-19 pandemic.