San Miguel Corp. said it has the financial capacity and track record to build the P735-billion New Manila International Airport project in Bulacan province.
“We believe our years of experience in building and operating major infrastructure projects are a key advantage when it comes to executing on this vital, ambitious project,” San Miguel president and chief operating officer Ramon Ang said.
“SMC has already undertaken a lot of major projects and have delivered on a number of them so the expertise, know-how and innovativeness are there. We also work with the best experts and contractors, so when the time comes to start construction on the airport, we expect to hit the ground running,” he said.
Ang’s statement came after Finance Secretary Carlos Dominguez questioned the capacity of San Miguel Holdings Corp., the infrastructure arm of San Miguel, to finance the planned Bulacan airport.
SMHC manages the country’s largest infrastructure network. Among the major projects SMC built and made operational are Naia Expressway, Tarlac-Pangasinan-La Union Expressway and Boracay Airport runway extension project.
Ongoing projects include the MRT-7 project, Skyway Stage 3, South East Metro Manila Expressway and SLEx-TR 4 projects. It also operates the Skyway system, the South Luzon Expressway and the Star Tollway.
Ang said that in terms of financial capability, the parent company SMC was fully backing SMHC for the airport project. He said the company concurred with the Department of Finance’s position that both companies―SMC and SMHC―should sign a joint liability agreement.
“The historical performance of the company reflects that we are more than capable of handling the project: strong balance sheet, consistent profitability and sustained growth and liquidity. All these support our expansion and acquisition activities,” Ang said.
The project, estimated at $5 billion or P735 billion, will be undertaken over a period of five to seven years to full completion. On average, spending spread is about P100 billion a year, which is at the level of the company’s cash from operating activities, on a simple annualized basis.
The company said it had a substantial debt space to supplement cash requirements for SMC’s priority projects and those of various business units. Its net debt to Ebitda ratio is also below the company’s debt covenant of 5.5x.
“With four parallel runways, expandable up to six, and modern, world-class facilities, this airport will be a game-changer for the Philippines. Its impact to the national economy, even to the local economy of Bulacan and nearby cities and provinces, will be significant,” Ang said.
“It will create some 1 million jobs once construction starts, and by the time it’s completed, millions more of new tourism jobs will be created. Travel will be much easier and more comfortable for our air passengers, for overseas Filipino workers, and foreign tourists. Access will also be very easy with multiple expressways that will bring the airport within 30 minutes or shorter from anywhere in Metro Manila,” Ang said.
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