By Beting Laygo Dolor, Contributing Editor

The multi-billion-peso upgrade of the Ninoy Aquino International Airport (NAIA) has been in limbo after the group of business tycoon Manny V. Pangilinan (MVP) announced last week that it would pull out of the project.

NAIA, also known as the Manila International Airport, is the Philippines’ premiere gateway for international visitors, as well as local air travelers but has fallen behind its peers in the region in terms of facilities and services.

A rehabilitation plan for the country’s first international airport was thrown into disarray after MVP’s Metro Pacific – considered one of the Philippines biggest infrastructure companies – informed the NAIA Consortium of their “intent to withdraw from this project.”

The NAIA Consortium comprised of the country’s taipans had been expected to invest PHP102 billion (approximately US$20 billion) to upgrade the airport, which occupies parts of Pasay City and Paranaque City.

Among the members of the consortium are the Ayala Corp., Aboitiz Equity Ventures, Andrew Tan’s Alliance Global Group, Lucio Tan’s Asia Emerging Dragon Corp., the Gotianun family’s Filinvest Development Corp. and the Gokongwei group’s JG Summit Holdings, Inc.

Technical support for the project comes from Singapore’s Changi Airports International, considered one of the world’s most modern airports.

A member of the consortium who asked for anonymity said the project would most likely push through. He did not say if a new player would replace Metro Pacific or if the existing members would just re-distribute the cost among themselves.

Noticeably absent from the consortium is the SM group of the Sy family. The late Henry Sy was a member of a similar consortium formed during the time of former President Fidel Ramos, which would have handled the NAIA upgrade.

That super consortium fell apart after numerous delays to the project, followed by reported disagreements among the taipans on how the project would be handled.

Analysts believe the pull-out of MVP was related to the tycoon’s anger at President Rodrigo Duterte, who had repeatedly cursed and threatened him over the alleged overpricing of Maynilad, the water concession that controls half of Metro Manila’s supply.

At one point, the President even threatened to slap MVP if they ever met in public.

Two weeks ago, MVP and the President did meet in a public function but there were no fireworks between the two. Instead, the two leaders shook hands and Malacañang said that they would soon meet for a one-on-one chat.

But the President also said that he preferred to relocate the NAIA outside of Metro Manila before his term ends in 2022. While believed to be non-feasible, the seeming lack of support from the chief executive is believed to have put a damper on the mid- to long-term plans of the NAIA Consortium.

Another issue that may have caused MVP to reconsider his group’s participation in the big-ticket project is the high real property taxes to be paid as a result of the upgrade.

Metro Pacific CEO Jose Maria Lim said the expected taxes to be paid would account for more than 50 percent of the expected investment return over the life of the contract.

Lesser but still potentially disruptive issues that made the NAIA upgrade project less attractive to consortium members were safety issues on a proposed NAIA rapid transit system and the salaries to be paid airport employees who would be in limbo during the construction period, which would last several years.

On the plus side, the consortium can expect to earn substantial revenue from the franchises to be granted to the various businesses located within the NAIA, including duty free shops, restaurants, transport and travel companies, and the like.

A hotel can even be built within the airport, similar to Singapore’s Changi.