Manila International Airport

[Unbreakable]

Just went through these twice during the holidays in T1. Very impressive and huge step up for us. I could see that people were very happy with these improvements.

[idp5601]

Any update regarding the NAIA privatization? Last time we heard of it MIAA were already seriously considering the Super Consortium's proposals, and if I'm not mistaken they were planning on making a final decision either late 2018 or in 2019.

[Arianespace]

You should hear from NEDA next month.

[Arianespace]

If you ever wonder how much MIAA earned last year read this

The Manila International Airport Authority (Miaa) said it remitted P3.42 billion in dividends— equivalent to half of its annual income— to the national government in 2018.

This was said to be the highest in Miaa’s history, exceeding by over half its 2017 payment.

Miaa is mandated to remit at least 50 percent of its annual income to the national government after it was granted fiscal autonomy during the term of former President Corazon C. Aquino.


Read more: https://business.inquirer.net/271013/rise-in-passenger-volume-pushed-miaa-earnings-to-record-high-in-2018#ixzz5ohXO2orJ 

The Consortium can easily have ₱10b a year on their pockets next year after roasting us with our own fat. That is ₱150b in 15 years assuming it stays the same. But we all know that it wont. Consortium has it figured at ₱1.5t against a proposal spending of ₱102b, and they wont tell you that mind boggling amount of money.

[ano]

no new updates on the swiss challenge yet right? I can't wait for work to start  to improve manila airport.

On other news, what about the bulacan airport? anyone heard anything about it?

[Arianespace]

If you're not much bothered, there is no railway connection between DIA and NAIA.

[Arianespace]

You can connect from Clark to NAIA from here



exchanging platform at FTI To here

[Arianespace]

And now some very major update you need to know.

Remember always these facts:

45 million passengers in 2018
25 billion pesos PSC (terminal fee) 2018

750 pesos for international
300 pesos for domestic

26.8 million international passengers = 19 billion
18 million domestic passengers = 5.4 billion

So now what?
NAIA earned 25 billion pesos  in Passenger Service Charge (terminal fee) in 2018. It handled 45 million passengers in the same year.

Consortium offers is 102 billion for 15 years. Assuming terminal fee stays the same, it would be 22 billion in 10 years time.

Now the simple math, 25 billion per year times 15 years is something like 375 billion in terminal fee alone for 15 years.

102 billion investment grows 273 billion in 15 years of basic terminal fee charges alone.

Department of Finance corporate affairs assistant Secretary Soledad Emilia J. Cruz has this computation at 276 billion. But I'm a realist so my projection is a bit conservative.

It does not cover yet porterage, aircraft parking, and stall rentals (AKA Mall).

THIS IS WHERE REVISION GOES WRONG
1. Not happy with that amount NAIA consortium wants 37.8 million passengers to use the airport. Fair. But that is government guarantee. 

They really are concerned about NMIA. Remember what I've told you about possibility of CEB or PAL relocating? That is 15 million off NAIA. Its exactly the same assumption they have. Some 15 million passengers will move to NMIA and Clark in 2025. And they don't want that. Because it will only give them the current 45 million.

Remember also DOTR plan to make NAIA all legacy carrier? They don't want that either. WHY?
About half of NAIA traffic is LCCs. 60 million traffic by 2025 divide by two will give them about 30 million. This is where the 37.8 million guarantee comes in. See how they fold up?


2. By giving 102 billion to the government, it will want the government to guarantee 81 billion. Again 80% government guarantee. Meaning, the government guarantees return of 81 billion to them if they end up losing.


3. NAIA consortium wants 5% of the gross income as guaranteed return of investment (ROI). Again, government guarantee. It literally means that even if they lose in profit, the contract will have them enjoy 5% ROI from gross. This is not how ROI is computed.


4. NAIA consortium will have 3 stages of development in 4 years. They have a first stage, second stage and final stage.

The first stage is after O&M start.

What particular project would that be? Consortium did not disclose but according to NEDA its just terminal improvements to service 47 million by 2020 for the first stage, connectivity of the terminals for the second stage and building new terminal with 18 mppa capacity within 2 years from start of contract for the final stage at the 4th year.

Here is the catch.

The final stage will not start if terminal fee does not increase to double the amount of the existing fee. Is that not a government guarantee? So no new terminal if there is no terminal fee increase.

Right now its 750 pesos for international and 300 pesos for domestic. So it will become 1500 pesos and 600 pesos respectively after four years. In 10 years time that amount will again double.

What is the logic in this doubling amount? NMIA. See explanation number 1.
 
Assuming the fee increase is granted, does it end there?

Apparently, NO. This is where it becomes mind boggling.

Together with the construction of new terminal that will accommodate 18 million passengers in 2024, or 4 years after O&M start date is the construction of mall and hotel within NAIA complex free of lease charges. Leases for these buildings ran for 25 years beyond the contract of the consortium. Meaning, the consortium will collect the leases for 25 more years instead of MIAA. That gives them 15 years more of revenue. Brilliant!


But wait there's more.

5. NAIA consortium will increase air traffic movements per hour to 52 from the existing 40. Not bad.

Since they will increase it to 52, the government pays penalties if less than 52 uses are made in 16 hours. Incredible. Meaning, all 52 slots should be filled. Why this is important? See again explanation number 1.

This should not be a problem now. But will be a problem when NMIA opens.

What about weather, or aircraft crashes on runway? Apparently, the government would also pay for these events. Very clever!

[Evodesire]

Why cant that super consortium just throw their money to Sangley? Are they just after building malls and condos in the NAIA area?

[arema]

How about giving it to Megawide instead of the consortium?

[Unknown/knowhow]

Bitaw, ngano dili na lang si Michael ug Edgar sa Megawide with their Indian Hi-Technology, which they implemented, a small manpower/low cost style of constructions, but, yet, a high grade infrastructure know-how...

Iwas, sa dami babayarang labor, thats their problem before sa Banawe St, QC pa office nila...

[Arianespace]

Its all about money. The operating income of NAIA in 2018 is about 18 billion. By giving the national government 103 billion they will earning 18-22 billion per year for 15 years. They will get 18 billion for the first year. And this is where they get the money for building a new terminal. Assuming its 20 billion per annum that is 300 billion for 15 years. Or a profit of 180 billion pesos. I can't even imagine why that profit is not enough.

MAGA has been floated around NMIA construction. If you think about this contract there is also various MAGA provisions explained in number 1 which they don't like. Executive actions.

[Arianespace]

Its now confirmed that Manila subway will end up NAIA 3 and goes to Nichols for NSCR transfer. There is no more FTI. It is also now confirmed that Airport Express to Clark will now have common use of rail between Nichols and Terminal 3. Commuter train however will still use PNR track.

[Arianespace]

If you're building a mall taking in airport tenanted stalls, and a hotel instead of an airport terminal, you would surely have to pay property tax. MIAA paid tax for T3 stalls. Property leased to private individuals not necessarily needed for airport operations is always subject to tax. Even SMC and Megawide accepted these terms. Why can't the consortium be treated any different?

https://business.inquirer.net/289083/tycoons-naia-rehab-plan-hits-a-snag

[Solblanc]

I’m still not entirely convinced that it’s worth it to privatize NAIA when the concession period is so short. Even if Bulacan doesn’t push through, Clark with a train will be able to absorb much of the growth.

[Arianespace]

MIAA official has described today  the revised of the revised concession agreement for the P102-billion rehabilitation of Ninoy Aquino International Airport to contain numerous onerous provisions which are grossly disadvantageous to the government. He did not elaborate what they were but said "they would likely be stripped by the OSG and DOF." The next question then would be what now. Would they still continue with the offer? Remember they were given until December 2019 by Sec. Tugade to come up with a clean proposal. Yet they end up re-inserting it in the other provisions.

This is the 3rd revision and they always come up with a magic trick of insertions which were discovered by die-hard DDS lawyers to be unacceptable. Note that Ayala Corp and MVP were part of this consortium and they are under the radar for rigged government contracts from the past.

[Arianespace]

And now the news, DOTr has finally thumbs down NAIA consortium's revised proposal for good. I'm happy for the government sticking to their gun. No wonder RSA was smiling to his grin and confident about his airport despite pandemic.

[Solblanc]

Now they're supposedly talking to two other companies. But why throw more money at NAIA? Even if it'll be used for 18 years, much better to funnel spillover traffic to CRK and whichever new greenfield airport that looks like a viable replacement for NAIA. There's only so much they can do, unless they bite the bullet and either reclaim a new runway or expropriate Bicutan.

[Arianespace]

A MIAA Official disclosed yesterday that consortium offer was dead on the water from 1 March. Sometime in later part of May they made a pitch about reviving the dead horse on the basis of pandemic. After all the government needs money. Lolo Art said no. When news came out, it was the fault of the government. Take this news for example:

“The far-reaching and long lasting consequences of the coronavirus pandemic on airline travel, airline operations and airport passenger traffic necessitated a review of the assumptions and plans to ensure that the Naia project will be viable in the ‘new normal’,” Naia Consortium said in its statement.

Read more: https://business.inquirer.net/301902/govt-naia-consortium-deadlocks-threatening-modernization-bid#ixzz6RlJhKmJb

The "real" news there was the consortium proposal not accepted by government. simple.

When time for negotiation ended there was no covid19 yet. And now they are saying their plan is justified by covid19 pandemic. Would you honestly believe it to be so?

Sometimes you need to drum support to validate lies.

And to the unknown "knights" this is what Dominguez has said,

 Dominguez said "two other proponents" are willing to take over the project on the government's terms.

 

Megawide and India's GMR Group had earlier submitted a counter-proposal for the project. The other one is Macro Asia proposal to build Terminal 5 beside Terminal 2. Both are in good grace of the government. Oh yeah, its still there!


read more: https://www.bworldonline.com/pal-dusts-off-naia-2-devt-pitch/ 

[Arianespace]

Megawide-GMR would have been a good option. The problem to the proposition is that they already operate Clark. That is a basic no-no due to anti-trust issues. Ben Kritz must have missed it. That was brought up in the meeting with Tugade. Unless they modify PPP which is unlikely, it is good as dead. So I posted PAL terminal instead. They have better chance of becoming true.

The partnership of Megawide Construction Corp. and India-based GMR Infrastructure Ltd. is apparently in line to win the coveted Ninoy Aquino International Airport (NAIA) rehabilitation project

https://www.manilatimes.net/2020/07/12/business/columnists-business/megawide-gmr-cements-position-as-phs-preferred-airport-developer/740662/?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook&fbclid=IwAR1YD-lXRPVaSN5m1VpT8jJqa_lULxeIIahR902hGz_styVLiL526eg8sjY#Echobox=1594507714