Thank you, RSA
Sharp Edges

Thank you, RSA

/ 05:20 AM February 20, 2024

At last, the perennial and seemingly unsolvable problems of our main international gateway, NAIA, will be handled professionally. For decades, flights have been hounded by delays, very poor services and numerous airport scandals and anomalies. Past presidents approved multiple renovations on NAIA but due to its limited space and single runway, it is known as one of the most congested airports in Asia. Designed for only 30 million passengers, it is processing as much as 40 million a year causing frequent flight delays both domestic and international.  Philippine Airlines and Cebu Pacific have shameful on-time records among all airlines because of this “NAIA taxiway overcrowding”. The single runway can only accommodate 42 takeoffs and landings per hour.

A few days ago, SMC-SAP and Company Consortium won NAIA’s O&M bidding with its offer of P30-B investment upfront and P2-B every year. This is on top of the 82.16 percent future government share of air-transport related revenues (duty free, ads, commercial space etc.) for a total project cost of P175-B for an initial 15-year concession. This translates to government getting up to a whopping P900-B in revenues over the initial 15 years and more, if extended for another 10 years.

Lost bidders, GMR Airports Consortium (Cavitex Holdings and House of Investments) made a very, very low 33.30 percent offer while Manila International Airport Consortium (Aboitiz, Ayala, Alliance, JG summit and Filinvest) submitted the lowest 25.91 percent.

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DOTr undersecretary Timothy Batan said this was the fastest solicited bidding in the country’s PPP history-from the project development process which began on Feb 2, 2023, until its approval on Feb 15 this year or just 12 months. Compare this to the previous record holder Muntinlupa-Cavite Expressway (MCX-PPP) project which took 18 months to consummate.

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Also, for the first time in government bidding, the DOTr and the Department of Finance (DOF) implemented a provision in the new Public Private Partnership (PPP) Code that benchmarks the “internal rate of return” (IRR) as a bidding parameter. The idea is to get the best deal for government on companies interested in highly investible PPP projects and how serious they are in giving funds to government.   

House Ways and Means Chairman Joey Sarte Salceda congratulated both Finance Sec.Ralph Recto and DOTR Sec. Jaime Bautista for getting this fair deal for government done in the “first ever, biggest and benchmark-based Public-Private Partnership bidding”.  Salceda further said, “From here on, PPPs becomes a potent way of procuring essential public services and at the same time generating revenues for government”.

SMC President and COO Ramon S. Ang declared, “Our aim is to elevate NAIA to world-class standard, ensuring an exceptional experience for all travelers with first-rate services and facilities”. “We will ensure that the government benefits the most advantageous revenue sharing agreement that aims to secure a favorable outcome for our shareholders while prioritizing fairness and long-term sustainability over immediate profits”, he added.

In winning, RSA again surprised everybody when his consortium showed a much lower Return on Investment (ROI) of only eight percent, a remarkable shift from the traditional 15 percent ROI regularly pursued by most businessmen, take it, or leave it. Some observers were quick to say that this is indicative of RSA’s commitment to really help the nation and not just earn profits for himself and the consortium members.

Moving forward, the public will feel the initial changes from this new airport management by next year 2025. After contract signing in the next 30 days, SMC-SAP will pay the initial P30B upfront  to government and then begin taking over operations and management within six months.

RSA clarifies that the goal of their rehabilitation of NAIA is to make it a functional airport that would service its maximum passenger capacity of 62 million per year .  This, of course, will continue until the P740B-New Manila International Airport project ( with its  six runways and much large terminal and facilities  in Bulacan will become our country’s main international gateway.

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With SMC’s NAIA and NMIA synched in operation, in perhaps three to four years from now,  tourist  and other arrivals will increase from the present 5M to 30 million per year and that would impact to millions of new jobs to Filipinos.  There is also a possibility of lower airfares because of quick turnarounds of commercial airliners  since NAIA and NMIA can now accommodate a combined 247 takeoffs and landings per hour.  Finally, we will have our own version of Singapore’s Changi, Hongkong’s Chek Lap Kok, Thailand’s Suvarnabhumi, Japan’s Narita and Haneda and south Korea’s Incheon.

New expressways leading to the new Bulacan airport were already approved by the Toll Regulatory Board and will be operational in 2026. These are Northern Access Link Expressway (NALEX), whose segment-1 is linked to Skyway stage 3 in Balintawak passing Bulacan, Pampanga and Segment-2 Tarlac City section of the existing Tarlac-Pangasinan-La Union Expressway (TPLEX). The new Bulacan airport will also be connected to Rizal Park by a high-speed train to carry passengers in just 20 minutes per trip. Of course, Quezon city residents can go direct to the airport via MRT7 via Bulacan or EDSA.

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All of these are very exciting developments that the next generation will enjoy and be proud of. We are at the stage of planting the seeds for our nation’s march to economic development and greatness of our heritage as Filipino. For his vision and relentless work and personal sacrifice, the nation is greatly indebted to this one-of-a-kind businessman. Salamat RSA.

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