The National Economic and Development Authority (Neda) has advised against considering unsolicited proposals from parties interested in constructing the New Manila International Airport (NMIA).
The Neda made this recommendation in its letter to Transportation Secretary Arthur P. Tugade dated October 27, 2016, signed by Neda Undersecretary and, at that time, officer in charge, Rolando G. Tungpalan.
The letter was sent by the Neda in response to the Department of Transportation’s (DOTr) request to review the unsolicited airport proposal made by San Miguel Holdings Corp. (SMHC).
“Given the numerous proposals received with regard to the development of the NMIA, you may wish to subject the project to a competitive bidding rather than through unsolicited mode, unless SMHC has been accorded by your department an original proponent status,” according to a copy of the letter obtained by the BusinessMirror. With the current administration’s openness to unsolicited projects, there are at least five groups keen on undertaking the construction of the NMIA.
These groups include SMCH, which is reviving its $10-billion airport proposal in Bulacan under the Aquino administration; the DM Wenceslao group, which proposed a combined airport and shipping port project in Sangley; and the Sy and Tieng group, which proposed a $50-billion airport and economic zone in Sangley.
The Neda also said the New San Jose Builders group has also proposed to include an airport in its Manila Bay flood defense project, while the Okada group is looking to increase its investments in the country by participating in the bidding for the NMIA. If the DOTr decides to conduct competitive bidding for the project, this means that the performance requirements or project specifications will be drawn up by the government.
These requirements may include components, such as the capacity of the terminal, the number of runways, access to and from the airport, and other key aspects that will allow the NMIA to meet the country’s needs.
The DOTr will also have to finalize the bid parameters, such as sovereign guarantees or premium payments and the award will be granted to the group that offers the highest net present value.
This means that if sovereign guarantees were chosen, the government will award according to the lowest subsidy sought. In terms of premium payments, the award will go to the company/group that will provide the highest offer.
Going through a competitive bidding for a project will also promote transparency and prevent naysayers from claiming that the choice of the unsolicited proponent was made through a “sweetheart deal.”
The unsolicited proposal, if the DOTr will push through with this mode, will still require a Swiss Challenge, a process by which other private groups could match the bid of the proponent.
However, the primary actor in the NMIA is still the DOTr. Whether it decides to implement the NMIA through unsolicited or solicited mode, the fact remains that the country is already in dire need of a new international airport to decongest the Naia.
“They have not made a decision yet, that’s the problem. In the last two Infracom [Infrastructure committee] meetings, we were forcing the issue already because we need to decide on an international airport because we need one,” a Neda source told the BusinessMirror.
The Neda estimates that building a brand-new international airport will take over five years to complete. This is mainly because of the extent of civil works and the standards needed to be met to make the airport up to code.
The Neda said the development of the NMIA was identified by the DOTr as one of its Core Investment Programs and Projects through the Public Investment Program Online.
Earlier, Tugade said he is open to allow the private sector to build airports. He said the only condition is for the private sector to undertake the project on their own without asking the government for guarantees or funds to build the airport.
The SMHC proposal was initially pitched to the Aquino administration three years ago. However, San Miguel’s proposal was shot down by the Cabinet.