Playing catch up with PH’s neighbors with a world-class airport

Megawide-GMR pooh-poohs idea of a ’fight’ with super consortium to rebuild NAIA

posted March 23, 2018 at 06:29 pm
by  Manila Standard
Meeting with a group of journalists at an influential breakfast club this week, Louie Ferrer, representative of Megawide-GMR consortium, a joint venture of Megawide Construction Corp. and Indian company GMR Airports, Ltd.,  was succinct on what his group  plans to do to solve Ninoy Aquino International Airport’s biggest problem, capacity.

The NAIA handled around 708 aircraft movements (take-offs and landings) a day in 2017. It handled 42 million passengers the same year, split equally between domestic and international sectors.

“Within the first four years of takeover, which may even be before the President (Rodrigo Duterte) concludes his term, we want to have solved NAIA’s capacity issues,” Ferrer told the Manila Standard. “The key is to ensure quick turnaround times and a more efficient use of resources, such as the existing runways.” 

Beef up airside infrastructure. One of the bidders to rehabilitate NAIA proposes (among other expansion projects) building parallel taxiways to the two exiting runways — one of which will be lengthened—and several rapid-exit taxiways. The strategy: aircrafts will exit the main runways fast, allowing these be used by the next departing or arriving aircraft (Photo courtesy of Megawide-GMR). 
Ferrer explained that Megawide-GMR’s   proposal “prioritizes airfield capacity development while simultaneously enhancing terminal comfort and efficiency.” It will increase NAIA’s airfield capacity to 950 to 1,000 aircraft movements a day, a 30 to 35-percent increase from the current approximate of 730 aircraft movements per day.

During an opening forum, Ferrer staved off questions about the consortium’s ‘fighting chances’ to bag NAIA project. “We are not here to fight,” he said. “We’re focused on the project: that’s because we want to help the government by presenting possible options to the Philippines’  airport gateway problem. But If others have a better proposal, let’s do it.”

Urgent issue

The need to increase air traffic capacity is more urgent than ever. With the economy growing at more than 6% a year, analysts expect air traffic to leapfrog to 47 million passengers in 2018 and onwards to 74 million by 2022.  With no capacity-building programs put in place, NAIA will have no choice but to turn away flights, a situation that could be disastrous for the economies of the national capital region, and the entire island of Luzon.

Best value. Megawide-GMR’s Ferrer said the government has a choice between two good airport proposals. “This kind of competition is healthy for the infrastructure sector.” 
The good news is that two groups from the private sector have given their respective proposals  to expand NAIA’s capacity. 

The first offer is from a consortium composed of seven of the country’s largest conglomerates. Collectively known as the ‘super consortium’, they propose to invest $7 billion to expand NAIA’s passenger capacity to 65 million a year. This is in exchange for a concession period of 35 years. 

The second offer comes from Ferrer’s group,  which wants invest $3 billion to increase NAIA’s capacity to 72 million. The latter proposal calls for a much shorter concession period of only 18 years.

Unfazed by competition

At last week’s media sit down,  Megawide-GMR’s top officers seemed unfazed by  competition from seven of the country’s corporate titans (Aboitiz InfraCapital, Inc., Ayala-owned AC Infrastructure Holdings Corporation, Andrew Tan-led Alliance Global Group Inc., Lucio Tan-owned Asia’s Emerging Dragon Corp (AEDC), the Gotianun family’s Filinvest Development Corporation, the Gokongweis’ JG Summit Holdings, Inc. and Metro Pacific Investments Corporation). 

“Our participation comes from our experience in operating and developing Mactan-Cebu Airport, which has transformed from a small airport into one of the best in Asia Pacific in the category of less than 10 million passengers,” said Andrew Harrison, chief executive adviser of Megawide GMR. “Our understanding of passenger behavior and stakeholder capabilities has allowed us to increase connections and passenger numbers.”

Harrison outlined his group’s proposal to operate with the two existing runways at NAIA. This included “maximizing capacities by constructing full-length taxi lanes parallel to both runways, augmented by several rapid exit taxiways.”

The idea, he explained,  is to have aircrafts exit the main runways at the soonest possible time, allowing it be used by the next departing or arriving aircraft. The second runway will be extended as well.

The net result  is that movements will increase from 40 to 60 per hour, Harrison projected.

The partners got game!

Ostensibly, the main difference between the two bidders is the concession term. Megawide-GMR proposes a concession period which is virtually half of what is being asked by the consortium.

The super consortium tapped Changi Airports of Singapore as its strategic partner while Megawide aligned with the Bangalore-based GMR group.

The main difference between the two foreign partners: Changi operates a single airport facility with a passenger traffic of 62.7 million while GMR manages three airport facilities—in New Delhi, Hyderabad and Mactan—with a collective passenger flow of 94 million. 

A third runway, or improve ‘airside’ infrastructure?

Another interesting difference between the proposals of the two consortiums is their approach to addressing NAIA’s airfield capacity. The super consortium insists on building a third runway to boost current and future capacity. 

Ferrer told the gathered newsmen that building a third runway is a non-issue for his group. “The key to unlocking NAIA’s potential is to optimize the existing airside infrastructure. We’re sticking with this gameplan,” he said. 

Boon for PH economy

Understandably, Megawide-GMR  has front-loaded its claim on how it engineered one of the most dramatic airport transformations in history.

From being one of the worst airports in the world, New Delhi was voted in 2014 as the best high-volume airport in the world according to the Airport Service Quality (ASQ) rankings.

New Delhi airport was ranked number one in 2015 again, and number two in 2016, tied with Changi.

Fast forward to 2018, Mactan Airport, under the management of Megawide-GMR, is said to be staging something similar. Despite being 40 years old, the airport  has been  offering glimpses of efficiency of late, though nothing has been deemed definite, as the “13th best airport in Asia” will only be inaugurated in June this year.

Indeed, interesting times ahead for the Duterte government as it inches closer to a decision which airport the country’s principal gateway will be. One thing is for sure:  whichever direction the Department of Transportation (DOTr)  casts its lot on, it will be a boon for the Philippine economy.

Topics: Megawide-GMR consortium
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