FINALLY, it’s go for the New Manila International Airport after the Philippine Senate unanimously approved, on third and final reading, the 50-year franchise to San Miguel Aerocity Inc. to construct the facility in the province of Bulacan.
The lawmakers, casting 22 affirmative votes with no objection, passed House Bill (HB) 7507, authorizing the subsidiary of San Miguel Corporation (SMC) to maintain the highly-anticipated and world-class domestic and international airport in Bulakan, Bulacan.
HB 7507 gives SMC the “right to construct, acquire, lease, operate or manage such properties as convenient or essential to efficiently carry out objectives of this Act, such as toll roads, railroads, mass transport systems, hotels, warehouses, hangars, aircraft service stations, and other facilities, as well as to develop the areas adjacent to the airport into one integral and comprehensive development, hereinafter collectively referred to as the Airport City.”
San Miguel Aerocity Inc. will operate the airport and its facilities in accordance with the Manual of Standards-Aerodromes, however, will be modified whenever the Department of Transportation (DOTr) or the Civil Aviation Authority of the Philippines (CAAP) will ask the franchisee to do so.
The franchise for the San Miguel subsidiary will be in effect for 50 years, including the 10-year construction period of the facility.
Once the 50-year validity is completed, the developer will turn over the airport to the government.
Following the measure, the airport developer is exempted from paying direct or indirect taxes and fees within 10 years, particularly within the construction period, including exemption from permit fees to be collected by local and national governments.
For the remaining 40 years of the effectivity of the franchise, the SMC subsidiary will be exempt from income and property taxes until it can recover its investments, but will be subjected to taxes after the stipulated period.
After the firm recovers investments, San Miguel is entitled to generate income from the airport facility equivalent to a stipulated Internal Rate of Return (IRR) of 12 percent per year.
Any amount exceeding the 12 percent of IRR will be remitted to the national government.
The San Miguel subsidiary will be required to submit its annual report to Congress, which will be a prerequisite for any of its applications for permits and certificates from the CAAP.
The airport in Bulacan is expected to be the new gateway for the country and ease congestion at the Ninoy Aquino International Airport and traffic in Metro Manila.
To recall, the DOTr issued in August last year the Notice of Award to San Miguel Holdings Corporation as the Original Project Proponent for the financing, design, construction, supply, completion, testing commissioning, and operation and maintenance of the New Manila International Project.
The project, which is a part of the flagship infrastructure program of the Duterte administration, involves construction and operation and maintenance of a new modern airport in Bulakan, Bulacan, 35 kilometers north of the City of Manila, with a design capacity of 200 million passengers per year, consisting of four runways and all aviation related facilities./PN
