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Oct

PAL looking for partners for NAIA-2 expansion project

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BusinessWorld Online

PHILIPPINE Airlines (PAL) is planning to submit to the government its unsolicited proposal for the expansion of Ninoy Aquino International Airport Terminal 2 (NAIA-2) by the end of the year.

“We are now in the process of finalizing a proposal to MIAA and DoTr (Department of Transportation)… We are expecting that we will submit our unsolicited proposal before the end of the year,” PAL President Jaime J. Bautista said in a press briefing during the Philippine Aviation Day on Friday.

“It will take maybe a few months for DoTr and MIAA (Manila International Airport Authority) to study and if approved by them, it will go to NEDA (National Economic and Development Authority)… If we start construction by next year, maybe it should be finished by end of 2020.”

PAL is expecting to spend “around $350-$450 million” for the NAIA-2 expansion.

Mr. Bautista said PAL is looking for a partner, which will have “most probably 25% or 30%” equity contribution. PAL will secure a loan for the remaining balance.

However, Mr. Bautista said the airline will not be in charge of airport operations, and is also looking for possible partners. “This could be within the LT [Lucio Tan] Group,” he said.

In August, Mr. Bautista revived the flag carrier’s proposal to construct an annex to the current Terminal 2. PAL submitted the concept in 2015 to the previous government under former president Benigno S. C. Aquino III.

“The reason why we are proposing that terminal, is for us to be able to extend good service to our passengers,” Mr. Bautista said, noting Terminal 2 lacks parking space and amenities.

The new terminal is not expected to significantly increase the capacity of the already-congested NAIA, which has a capacity of around 30 million passengers per year but already services around 42 million.

The new terminal will be designated for international operations, and will not be for exclusive use of PAL. Terminal 2 will be used for domestic flights.

However, PAL’s proposal is facing challenges, as the Philippine Amusement and Gaming Corp. (PAGCOR) said the flag carrier cannot build its proposed annex on the property adjacent to Terminal 2 since it does not own it.

The gaming regulator earlier said PAL has been only leasing the 10-hectare property from PAGCOR and does not have a right to use it for another purpose aside from the use as “an aircraft parking ramp/apron facility,” as stipulated under the lease contract.

Mr. Bautista expressed confidence the issue would be resolved once its unsolicited proposal is approved.

“Whatever issue is on the PAGCOR property, this should be resolved if our proposal is accepted by the DoTr. It’s a separate issue. The issue with PAGCOR is for the lease of the property which will be used for aircraft parking,” he said.

SMC AIRPORT
Meanwhile, Transportation Secretary Arthur P. Tugade said the DoTR has approved and forwarded San Miguel Corp.’s unsolicited proposal for a P700-billion airport project in Bulacan to the National Economic and Development Authority (NEDA) Board, chaired by President Rodrigo R. Duterte.

“Last week, we forwarded to NEDA… not for approval, for deliberation,” Mr. Tugade said on Friday.

SMC is proposing to build an airport on a 2,500-hectare Bulacan property that can accommodate up to six runways. – P.P.C. Marcelo