Philippines picks domestic San Miguel group over India’s GMR to lead US$3 billion Manila airport revamp

GMR was seen as a front-runner for its ability to maintain the long-term business viability of operating the airport, even as it proposed less revenue for Manila

But bureaucracy is likely to take a toll and cause the project to overrun and push up costs ‘significantly’, analysts say

4-MIN READ4-MIN

A tourist arrives at terminal 1 of the Ninoy Aquino International Airport in Paranaque City. Photo: Xinhua

Published: 5:33pm, 16 Feb 2024Updated: 3:05pm, 17 Feb 2024

The Philippines on Friday awarded a US$3 billion redevelopment project for Manila’s airport to domestic conglomerate San Miguel Corporation, which edged out India’s GMR Group-led consortium.

San Miguel’s consortium, which includes South Korea’s International Airport Corp, had proposed to give the government 82.16 per cent of all revenues, except for passenger service charges, under a public-private partnership model. Passenger services usually make up 30-40 per cent of total revenues, analysts said.

India’s GMR Group had proposed a contract to give the government 33.3 per cent of its revenues. Despite the lower figure, it was seen as a front-runner for its ability to maintain the long-term business viability of operating the airport.

A third bidder, Manila International Airport Consortium, led by Global Infrastructure Partners that was recently acquired by US asset management firm BlackRock, had proposed to share 25.91 per cent of revenues with the Philippine government.

Passengers wait for information about their flights at terminal 3 of Ninoy Aquino International Airport. Photo: AFP

The redevelopment bid for the Ninoy Aquino International Airport (NAIA) was launched last August after two failed attempts to expand the facility’s operations, considered among the worst worldwide at 50 per cent over capacity.