Philippines' $3-billion airport project: Potential bidders include India's GMR Group

Winning party must operate and maintain the airport, the capacity of which would be doubled after the upgrade to about 60 million passengers a year

By Reuters

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Published: Wed 6 Sep 2023, 2:37 PM

A 170.6 billion pesos ($3 billion) project to modernise the main international airport in the Philippines has attracted three potential bidders, including India's GMR Group, the Philippine transportation secretary said on Wednesday.

Ranked among the world's worst international gateways, the aging Ninoy Aquino International Airport (NAIA) badly needs an upgrade to end chronic flight delays, address congestion, and improve facilities.

The other two possible bidders were conglomerate San Miguel corporation and a Manila consortium, whose $4.9 billion unsolicited proposal for the project was rejected earlier, Secretary Jaime Bautista said. India's GMR group has been operating an airport on the Philippine tourism island of Cebu.

"We want somebody who has experience in operating an airport ... and, of course, with a very good financial background. Those are two major requirements," Bautista said in an interview on the sideline of an Association of Southeast Asian Nations (ASEAN) summit in Indonesia.

Bautista said the government would try to find overseas investors through two roadshows, in Singapore next week and in Paris in the third week of September, before opening bidding in the last week of December, and naming a winner in January.

The winning bidder must then operate and maintain the airport, the capacity of which would be doubled after the upgrade to about 60 million passengers a year, Bautista said, adding the concession period being offered was 25 years.

Apart from NAIA, the Philippines is seeking financing to upgrade four other airports, on Busuanga island, Zamboanga city, Sanga-Sanga island and General Santos city. It will also build a new airport in Brooke's Point town on Palawan island.

The secretary presented the five projects during a business matching event on Wednesday on the sidelines of an ASEAN business summit. No deals had yet been agreed at this early stage, he said.

"This is more to give them information and we will need to do further communication with the audience," he said.

Railway projects

The Philippines has set an internal deadline to renegotiate Chinese loans for three railway projects worth $4.9 billion, at the end of December, Bautista said, adding that in parallel, the government had been talking to other possible investors.

Last year, President Ferdinand Marcos Jr ordered the transport ministry to renegotiate the loan agreements that were considered "withdrawn" after the Chinese government "failed to act on the funding requests".

"If there will be no funding, we will have to cancel the existing agreement with them and look for another source of funding," Bautista said, adding there were several interested investors.

The three projects are: Subic-Clark Railway Project, the Philippine National Railways South Long-Haul Project and the Davao-Digos segment of the Mindanao Railway Project.

Bautista said inflation might have pushed their costs up to more than $4.9 billion and the National Economic and Development Authority may have to be approve them again. ($1 = 56.9500 Philippine pesos).


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