July 31, 2019 / 3:10 AM / 24 days ago

Philippines' San Miguel set to win $14.5 billion airport project

MANILA (Reuters) - Philippine conglomerate San Miguel Corp (SMC.PS) is set to win a contract to build and operate an airport project worth 735.6 billion pesos ($14.47 billion), aimed at decongesting Manila’s ageing facility, a government official said on Wednesday.

FILE PHOTO: A worker cleans a logo of San Miguel Corporation (SMC) inside a main office in Mandaluyong city, metro Manila February 12, 2016. REUTERS/Romeo Ranoco/File Photo

The new international airport, the country’s largest transportation project to date, will support Philippine President Rodrigo Duterte’s ambitious $180 billion infrastructure modernization program that includes roads, bridges, ports, and the country’s first subway.

San Miguel’s unsolicited bid went unchallenged following a two-month period for companies to buy and submit Swiss challenge documents, Giovanni Lopez, chairman of the transport ministry’s bids and awards committee, told reporters.

“It is our single biggest investment in our country,” San Miguel President and Chief Operating Officer Ramon Ang said in a statement. “The airport will be built at no cost to government, and with no subsidies or guarantees,” he added.

The Philippine conglomerate has proposed building and operating an international airport in Bulacan province, north of the country’s capital. The airport will be designed to cater to 100 million passengers annually, compared with the 31-million-passenger capacity of the existing main gateway.

Flight delays are typical across Philippine domestic airports, mostly due to backlogs at Manila’s Ninoy Aquino International Airport, which was rated among the world’s worst airports.

The transportation department expects San Miguel to start construction late this year, Lopez said. It will feature four runways, aviation-related facilities and equipment and an eight-kilometer airport toll road.

The government will formally hand over the 50-year airport concession to San Miguel after the conglomerate completes post-Swiss challenge documentation and other requirements, Lopez added.

San Miguel, which did not provide further details on the airport project financing, had pursued an aggressive expansion strategy since 2008 to bolster revenue, and added infrastructure, mining, petroleum and power assets to its staple food and beverage businesses.

Last year, the company asserted it does not need a partner to build the airport, in response to concerns that the project may be too big to handle alone.

Shares in San Miguel slipped as much as 2.2% after the government’s announcement on Wednesday.

Reporting by Neil Jerome Morales, Editing by Sherry Jacob-Phillips

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