Megawide-GMR consortium submits $3 billion unsolicited proposal to rehabilitate NAIA

March 1, 2018

Megawide-GMR Consortium, a joint venture of Megawide Construction Corp. and GMR Infrastructure of India on Thursday submitted a $3 billion unsolicited proposal to rehabilitate and to double the capacity of the  congested Ninoy Aquino International Airport.

“As an experienced private operator, we have a deep understanding of the problem experienced by NAIA and we would like offer our take on the solution,” Louie Ferrer, one of the consortium’s authorized representatives said.

“It is vital to immediately decongest NAIA and maximize its potential in order to sustainably support the air traffic needs of the greater capital region,” he explained. “A solution is urgently needed, which we in the private sector are willing to support and provide,” he added.

Ferrer said NAIA’s most critical constraint is limited airfield capacity, which limits its capability to accommodate more flights, adding NAIA has a reduced ability to control delays related to aircraft movement, thereby worsening terminal congestion.

The consortium’s $3 billion investment proposal includes all airside, terminal, and landside improvements, which will be done in three phases.

Megawide-GMR’s $3 billion proposal to expand and rehabilitate NAIA is lower than the P350 billion offer of NAIA Consortium. The consortium’s members are Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corp., Alliance Global Group Inc., AEDC, Filinvest Development Corp., JG Summit Holdings Inc. and Metro Pacific Investments Corp.

“This is a technically responsive proposal. We have evaluated multiple options to enhance NAIA’s capacity and efficiency while reducing airside and landside congestion,”  Ferrer said.

Andrew Harrison, another authorized consortium representative said its detailed masterplan takes into account all possible constraints in transforming a fully operational brownfield airport.

"It aims to maintain the high service levels expected of a world-class airport for the next 18 years,” he added.

The consortium believes these solutions will increase airfield capacity to 950-1000 aircraft movements per day, a  30 to 35 percent increase from the current approximate of 730 aircraft movements/day.

For peak hours, the consortium will increase NAIA’s peak hour aircraft handling capacity by 50 percent from 40 to 60.

Within 24 months of taking over operations, the consortium will also rehabilitate and expand the existing terminals, which will roughly double the space and result in over 700,000 sq. m. of terminal area.

Once completed, the airside facilities and the terminals shall be able to handle a total annual throughput of 72 million passengers.

GMR Megawide proposes a shorter concession term of 18 years.

“This concession period is unprecedented in airport PPP projects of this size across the world,” Ferrer said, adding that  “However, we believe that such a concession term will balance two very important objectives: providing flexibility and time for the government to refine multi-airport system strategy while addressing NAIA’s immediate problems.

The consortium also  disclosed that they did consider the option of adding a third runway. “We assessed the third runway solution in line with the standards set by the International Civil Aviation Organization (ICAO) and the Civil Aviation Authority of the Philippines (CAAP). However, the operational challenges associated with having an additional runway make this solution unviable,” Harrison said. DMS