New Manila airport concession awarded to San Miguel Corp

San Miguel Corporation's proposed Bulacan International Airport
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The long-overdue, much discussed and oft-delayed new Manila airport looks set to finally take off with San Miguel Corporation’s Bulacan airport project gaining approval.

The unsolicited proposal by the diversified food, drinks and infrastructure conglomerate San Miguel Corporation (SMC), best known for its iconic San Miguel beer, is to be built in the coastal area of Bulakan, 50 kilometres north of the city of Manila to replace the severely overcrowded Ninoy Aquino International Airport (NAIA).

San Miguel Corporation's proposed Bulacan International Airport
San Miguel Corporation’s proposed Bulacan International Airport featuring four runways and expandable to six.

The proposed aviation gateway will will cover roughly 2,500 hectares and have four runways, with enough space to expand to six, and will be part of a larger infrastructure ecosystem that will connect with existing expressways, and mass rail transits that will link it to southern and northern Luzon. This includes an 8.4-km tollway that will connect the New Manila International Airport to the North Luzon Expressway in Marilao, Bulacan.

No mention of what cargo facilities the new airport will support and how cargo movements will be catered for was made in the announcement. Also absent from the announcement was what would become of the existing NAIA and how the substantial domestic network would link up with the new international airport.

SMC earlier noted that delays at Naia carried a heavy price tag. By 2020, it estimated that annual losses for airlines would hit PHP 1.1 billion (USD 21 million) while passenger productivity losses would amount to PHP 2.8 billion.

The Philippines National Economic Development Authority approved the concession agreement for the Bulacan International Airport after no challenger came forward in a Swiss challenge, required for every public-private partnership project.

Given there are no delays as a result of the Philippines’ quirky political environment, SMC’s proposed P735 billion (USD 14 billion) Bulacan airport should start construction by Q4 this year. The first phase of the project is expected to be operational within four to six years after construction starts. SMC will develop and operate the airport complex through a 50-year concession period.

There has been no shortage of proposals over the years, but Philippine politics, notorious for its partisan politics and overt corruption, has derailed, delayed and otherwise brushed aside a number of valid proposals. SMC’s proposal was first made nearly three years ago.

The new Manila airport to be built at Bulacan, some 50 km north of Manila, mid-way between Clark International Airport (CRK) and Ninoy Aquino International Airport (MNL).

These eventually were whittled down to two well-moneyed contenders. Aside from San Miguel Corp.’s ultimately winning proposal to build a new international airport mid-way between Manila and Clark – where there is already a substantial airport at the site of a former US Air Force base – the other major contender was the Belle-Solar Group’s proposal in Sangley Point, Cavite, much closer to metro-Manila than the SMC proposal.

The new airport is expected to bring “trillions of dollars” in economic activity, 35 million tourists annually as well 30 million tourism-related jobs for people in Bulacan and nearby provinces, the company said.

“It will provide more and better livelihood opportunities, not to take them away, ensure environmental balance and enhance resilience against calamities, because it’s the right thing to do,” SMC president and COO Ramon Ang said.

“In other words, we envision a brighter future for everyone, but we know what’s worth achieving isn’t necessarily easy. We will face rough waters along the way, that’s why we need everybody’s help and support to make this dream a reality,” he added.

Ang was formerly the president and chief operating officer of Philippine flag carrier Philippine Airlines Inc. (PAL) after SMC bought 49 per cent of PAL’s parent, PAL Holdings, for USD 500 million in 2012 with SMC’s vice chairman, president and COO, Ramon Ang taking over as PAL president and COO. SMC’s share was bought back by Tan’s PAL Holdings in 2014.

San Miguel is waiting for the ‘Notice of Award’ from the government before it can start the construction of the project.

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