After several members of a consortium have backed away from a proposal to upgrade and operate Manila's main airport – the Ninoy Aquino International Airport (NAIA) - the Manila Airport Authority is terminating negotiations and revoking the original proponent status granted to the group. It has also named a new firm to take over the project.
Citing the aviation demand downturn and changes that could impact the viability of the project,. the seven-member group named the NAIA consortium backed away from the project.
“Unfortunately, the government indicated that it is not willing to accept most of the consortium’s proposed options and the consortium can only move forward with the NAIA project under the options it has proposed,” the group said in a statement.
The seven business groups include the Ayala Corporation, JG Summit Holdings, Abolitz, Equity Ventures, Alliance Global Group, Metro Pacific Investments, LT Group, and Filinvest Development.
The termination of the proponent status was confirmed by the Ayala Corporation which issued a statement to the Philippine Stock Exchange.
"Ayala Corporation’s wholly owned subsidiary AC Infrastructure Holdings Corp., received a letter from the Manila International Airport Authority (MIAA) on 10 July 2020, notifying the NAIA Consortium that MIAA is terminating any further negotiations with the Consortium on the NAIA unsolicited proposal and withdraws/revokes the Original Proponent Status and approvals earlier granted," Ayala Corp said.
The group made the initial proposal worth around USD $7 Billion (~PHP 345 Billion) to operate and maintain the airport for 35 years. This proposal was later reduced to a USD $2 Billion (PHP 98 Billion) for a 15-year concession period.
Mactan-Cebu Airport Consortium Named New Original Proponent
Within a few days, the Manila Airport Authority named the consortium currently operating the Mactan-Cebu Airport who would take over the rehabilitation of the Philippines' main air travel hub.
The consortium – Megawide Corporation and India-based GMR – disclosed in a filing to the Philippine Stock Exchange on July 17 it received the original proponent status from the Manila Airport Authority.
“In a letter dated 15 July 2020, the Manila International Airport Authority (MIAA) granted the consortium led by Megawide Construction Corporation with GMR as partner operator, the Original Proponent Status (OPS) for the development of the Ninoy Aquino International Airport,” stated the report.
Megawide-GMR currently operates the Mactan Cebu Airport, the Philippines' second biggest air hub.
The firm's takeover is still subject to regulatory approvals and a Swiss challenge before getting the final go-ahead.