Philippines Senate approves 50-year Bulacan airport franchise bill after 2nd reading
Philippines’ Senate yesterday granted a 50-year franchise to a subsidiary of San Miguel Corp. (SMC), which plans to construct a new airport in Bulacan, Manila. The approval was given following a second reading of the proposal by the Senate.
The airport’s construction will commence soon and be completed in around 10 years at no cost to the Philippines government. After the 50-year lifetime of the franchise (which is inclusive of the construction phase), the airport will be turned over to the government.
The franchise bill also exempts SMC’s subsidiary company from all direct and indirect taxes and fees during its construction period. And, after the construction period and the remaining 40 years in the franchise, SMC will be exempted from income taxes and property taxes until it has fully recovered the investment cost on the P735-billion project.
The bill also provides a revenue-sharing agreement with government, requiring SMC to remit to the government “any amount in excess of the 12% internal rate of return” of the Airport City.
Its backers claim the New Manila International Airport may generate 400,000 jobs during the construction phase.