Group with highest revenue share will win NAIA bidding – DOTr

The Civil Aviation Authority of the Philippines is expecting around 2.2 million travelers in airports this month during the holiday season, up by two million from the same time last year. – Walter Bollozos / The Philippine STAR

MANILA, Philippines — The Department of Transportation (DOTr) plans to issue the contract to operate and maintain the Ninoy Aquino International Airport (NAIA) to the consortium with the highest offer on revenue share.

Transportation Secretary Jaime Bautista told reporters that should all consortiums participating in the bidding for NAIA pass the legal and financial tests, the clincher would be how much revenue they are willing to split with the government.

This means the DOTr will favor the proposal that provides the highest annual returns for the government from NAIA operations.

Transportation Undersecretary Timothy John Batan said whoever secures the deal to rehabilitate NAIA will settle an upfront fee of P30 billion and an annuity cost of P2 billion. Aside from this, the concessionaire hands over a portion of its income from NAIA to the government.

“All of the bidders will pay P30 billion in upfront [fee] and all of the bidders will pay P2 billion per year. However, bidders will offer different percentages of the gross revenue share,” Batan said.

“The bid with the highest gross revenue share (to the government) – excluding passenger service charges – will win,” he added.

In private-public partnership projects, Batan said proponents want to put their best foot forward to show the government that they can sustain big-ticket infrastructure like airports.

He cited, for instance, the case of the Mactan-Cebu International Airport that was awarded to the joint venture of the GMR Group and Megawide Construction Corp. for filing the highest offer of P14.4 billion in upfront fee.

Batan said the National Economic and Development Authority has identified an ideal percentage of government share in NAIA revenues. However, this amount can be disclosed only after all of the bids are placed with the DOTr.

The DOTr hopes that the privatization of NAIA will not only enhance its facilities and services, but raise additional income as well. All of the fees to be paid by the winning bidder will go to the Bureau of the Treasury to finance state programs.

The DOTr is processing the bids of four consortiums made up of the largest conglomerates in the Philippines vying for the right to operate and maintain the Manila airport.

The agency eyes to issue the notice of award by Feb. 15 and sign the concession agreement by March 15 in line with the goal to turn over NAIA to the winning bidder within the year.

If you like this article, share it on social media by clicking any of the icons below.

Or in case you haven’t subscribed yet to our newsletter, please click SUBSCRIBE so you won’t miss the daily real estate news updates delivered right to your Inbox.

The article was originally published in PhilStar Global and written by Elijah Felice Rosales.