May 4, 2018 / 8:26 AM / 18 days ago

San Miguel to build $14 billion Manila airport project alone

MANILA (Reuters) - San Miguel Corp (SMC.PS) does not need a partner to build a proposed $14 billion airport near the Philippines’ capital Manila, the company’s president said on Friday, responding to concerns that the project may be too big to handle alone.

FILE PHOTO - A logo of San Miguel Corporation (SMC) is seen at a main office in Ortigas city, metro Manila February 12, 2016. REUTERS/Romeo Ranoco

The international airport, the country’s most expensive transport project to date, was among 20 infrastructure projects approved by the government last week.

“If you look at our balance sheet and our cash flow, we can easily do that airport alone,” San Miguel President and Chief Operating Officer Ramon Ang told reporters.

The project aims to ease chronic passenger and aircraft congestion at the main air gateway in Manila, part of President Rodrigo Duterte’s ambitious $180 billion “Build, Build, Build” infrastructure development and upgrade program.

Ang was responding to a comment by Finance Minister Carlos Dominguez, who on Monday questioned whether the airport project might be too big for San Miguel.

“We must make sure the proponent has the financial and technical capability to carry it out, that’s all. And a partnership is obviously allowed for that,” Dominguez said.

San Miguel, the country’s biggest company by revenue, is best known for its beer. It has pursued an aggressive expansion strategy since 2008, adding infrastructure, mining, petroleum and power assets to its staple food and beverage businesses.

The company plans to build and run the airport under a 50-year concession with the government.

The proposal will be subject to a Swiss challenge under government rules, which allows for competing offers, with the original bidder given the right to match a better proposal.

Ang said the project was needed to ease congestion at Manila’s main airport which has restricted growth in tourism.

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

Ang said the new airport could handle 20 million foreign tourists a year, compared to a record 6.6 million visitors last year, according to government data.

    Reporting by Neil Jerome Morales; Editing by Martin Petty and Darren Schuettler

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