Albay Rep. Joey Sarte Salceda on Monday congratulated the Department of Finance (DOF) under Secretary Ralph Recto, and the Department of Transportation (DOTr) under Secretary Jaime Bautista, for successfully bidding out the P170-billion rehabilitation of the Ninoy Aquino International Airport.
The project is said to be the biggest formal Public-Private Partnership to date.
“Highest congratulations are due to the DOF and DOTr, led by Secretaries Recto and Bautista, for getting it done – a very fair deal for the government,” Salceda, the chair of the House Committee on Ways and Means and the House resident economist, remarked.
“This is the largest single PPP to date and at an astronomical government share of air transport revenues. At 82.16 percent share of revenues from air transport-related operations, this is the best demonstration of a benchmark-based PPP, which I fought for in the PPP Code,” he added.
Salceda was referring to the provision in the new PPP Code, which uses a proponent’s internal rate of return as a bidding parameter.
“Essentially, companies now compete for highly investible PPP projects based on how much they’re willing to shell out to the government. That makes PPPs not just a potent way of procuring public services. It also makes PPPs are very powerful source of revenues for the government,” Salceda added.
The winning bidder for the 15-year concession to manage NAIA is SMC-SAP & Company Consortium, led by the conglomerate San Miguel Corporation. The concession is extendible for another 10-year period.
The project cost is an estimated P175 billion, with an upfront investment of around P30 billion on top of the 82.16 percent government share.
“This also demonstrates, once again, that Ramon Ang is the only taipan who bets big on his country – who latches SMC’s destiny with the destiny of the Philippines. Where others diversify, RSA doubles down on the Philippines – if the country fails, he fails. But, if the Philippines succeeds, he succeeds big time.”
“Possible projects include interconnection of the first three terminals and solutions to the taxiway overcrowding.”
Salceda also specifically congratulated the efforts of the Privatization and Corporate Affairs Group, led by Undersecretary Catherine L. Fong, for the successful bidding out of the project.
“Usec. Cathy sought my advice and support through this, especially with regard to using the rate of return as a bid parameter. This was the heart of the first version of the PPP Code that I proposed in 2006,” Salceda said.
“I am confident that the PPP Code will further unclog the PPP pipeline and unleash massive investments towards closing the infrastructure gap.”