NEWS

By Dona Magsino

The Senate on Monday approved on third and final reading a bill granting San Miguel Aerocity Inc., a subsidiary of San Miguel Holdings Corp., a franchise to construct and operate the New Manila International Airport and an adjacent Airport City in Bulacan.

House Bill No. 7507, sponsored by Senator Grace Poe, got 22 affirmative votes, zero negative vote, and zero abstention in the upper chamber.

Once the franchise bill is signed into law, the construction of the P735-billion airport project shall commence within a year. The developer must secure appropriate permits from the Civil Aviation Authority of the Philippines for the construction and operation of the airport.

The franchise shall be effective for 50 years and after which the grantee shall turn over the ownership of the airport to the national government.

During the 10-year construction period of the Bulacan airport, the San Miguel Aerocity shall be exempted from all direct and indirect taxes and fees.

For the remaining years of its franchise, the airport developer shall be exempt only from income and property taxes until it has recouped its investments. After which, it shall be subjected to all taxes.

The bill also states that any revenue in excess to the 12% internal rate of return of the Airport City shall be remitted by the grantee to the national government.

About 400,000 jobs are expected to be created for the construction of the airport alone, Poe said.

She added that the Bulacan airport is expected to accommodate up to 70 million air passengers annually — double the current capacity of the Ninoy Aquino International Airport in Pasay City.

San Miguel Aerocity has a projection of a P50-billion profit in 10 years following the first 10-year construction period, according to Poe.

During the period of debates, the senators discussed that the incentives provided under the airport franchise shall not be affected by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which rationalizes tax perks.

Last month, the Philippine Institute of Volcanology and Seismology raised flooding and other geohazard concerns on the construction of the Bulacan airport.

In response, San Miguel Corp. president and chief operating officer Ramon Ang said the conglomerate is tapping the three airport construction firms involved in the development of Singapore’s Changi International for this project.

Source: GMA News Online