The Manila International Airport Authority has terminated a deal with NAIA Consortium – a group comprising several of the Philippines’ largest companies – for the Php102 billion (US$2.06 billion) redevelopment and operation of the national capital’s Ninoy Aquino International Airport.
A number of the consortium’s members, including Resorts World Manila investor Alliance Global Group and Filinvest Development Corp, which is planning a US$200 million casino in Clark, issued announcements via the Philippine Stock Exchange on Tuesday confirming they would no longer proceed with the project.
“On 10 July 2020, the NAIA Consortium … received from the Manila International Airport Authority (MIAA) a letter, notifying the NAIA Consortium that MIAA is terminating any further negotiations with the NAIA Consortium on the NAIA Project and withdrawing the Original Proponent Status and approvals earlier granted,” the joint announcements said.
The project’s collapse comes after the NAIA Consortium had written to the airport authority last week requesting revised conditions due to the impact of COVID-19 and concerns over their ability to raise the required funding. The MIAA rejected that request.
According to local media reports, the NAIA Consortium had specifically sought to include a provision for financial reparations to be paid to the group should any future changes to Philippine laws cause a negative impact. It was also concerned over requirements to pay substantial property tax and to build a people mover connecting airport terminals.
The original terms of the deal, which aimed to double the annual passenger capacity of NAIA from 31 million to 65 million, included a 15-year concession to run the new facility upon completion in 2024.
Aside from Alliance Global Group and Filinvest, the consortium’s members included Ayala Corp., Aboitiz Equity Ventures, Asia Emerging Dragon Corp and JG Summit Holdings. Infrastructure giant Metro Pacific Investments Corp withdrew earlier this year.
The upgrade of NAIA is seen as a critical development in supporting the Philippines’ growing tourism and leisure industries, including the nearby Entertainment City precinct which is home to Manila’s integrated resorts.
Ninoy Aquino International Airport has been lamented for decades as one of Asia’s worst airports, making regular appearances on various “worst airports” lists.
In a recent interview with Inside Asian Gaming, Bloomberry Resorts Chairman and CEO Enrique Razon Jr named “the airport and the subway” as the two key infrastructure projects Manila urgently needs to “explode” as a tourism destination.
The MIAA stated last week that it has two other investment groups interested in developing NAIA.