Investors are circling the auction of Manila’s Ninoy Aquino International Airport (NAIA) as the Filipino government gears up to launch the project tender next month.
Metro Pacific Investments, Aboitiz Equity Ventures, Ayala Corp, San Miguel and Megawide-GMR Infrastructure have said they are interested in the operations and maintenance (O&M) of NAIA.
The Filipino investors will have to team up with an airport operator. The Department of Transportation (DOTr) intends to finalise the eligibility requirements and publish the invitation to pre-qualify in October, a project source told InfraAsia.
Industry sources said the DOTr is considering a demonstrated capacity to handle an airport that serves at least 15m or 20m passengers per year. NAIA served 36m passengers in 2015.
The operators bidding for the regional airports bundles – Aeroports de Paris, Incheon International Airport, GMR Infrastructure and Vinci Airports as reported – would meet the 15m passengers a year minimum requirement.
DoTr “will need to do a balancing act between experience requirements and investment appetite,” observed an industry source. Some investors may not be willing to invest a large amount – in other Filipino airport PPPs, the operator has been required to invest at least 10% of the project equity. DoTr’s estimated total project cost is PHP 74.6bn (USD 1.55bn) for a relatively short 15-20 year concession period.
The Mactan Cebu airport PPP covers 25 years while the regional bundles will span 30 years.
Commercial, non-aeronautical revenue at NAIA has growth potential and the government has already started adding shops at the airport’s Terminal 3, PwC director Rosemary Ong told InfraAsia.
But the majority of airport revenue in the Philippines comes from passenger service charges.
“The charges at NAIA are lower than at Mactan Cebu at the moment and there is room for an increase in charges, Ong added. “However, it is also important to consider how limitations in airside facilities, such as runway capacity, will impact upon future growth in passenger numbers at NAIA.”
The runway is limited to handling 40 aircraft each hour and in July was damaged due to heavy rain which forced flights to instead land at Clark International Airport. The government is working on a plan to develop a second airport for Manila instead of adding a new runway and terminal at NAIA, as reported.
The options being explored are the Clark International Airport, around 95kms from the capital, and the US naval base at Sangley Point.
Ong noted that Clark is operating under capacity because of poor connectivity with Manila. “The government considered decreasing user taxes at Clark to boost traffic but the proximity to Manila is still a key factor. Unless connectivity concerns are resolved, travellers would still prefer NAIA.”