San Miguel’s Ang Offers $14 Billion Airport in Tycoon Battle

The battle of Philippine tycoons to build a new airport to serve the nation’s capital is heating up as San Miguel Corp. proposed a 700 billion-peso ($14 billion) facility, rivaling an offer from a group led by billionaire Henry Sy. San Miguel shares rose to the highest in more than three years.

The conglomerate has submitted a plan to the Department of Transportation with a provision for up to six runways in a 2,500-hectare property in Bulacan province, President Ramon Ang said in a phone interview. It will be built without any guarantee or a subsidy from the government, he said.

“We will finance everything, build everything by ourselves and take the risk,” Ang said Wednesday. The government could sell the 600-hectare property where the current Manila airport complex is located for $20 billion and have the area converted into a new business district, he said.

Philippine President Rodrigo Duterte, who has vowed to boost infrastructure spending to a record, is also counting on private investors to upgrade facilities as Manila struggles to cope with rising flight traffic and road congestion. All-Asia Resources & Reclamation Corp., a venture of Sy’s Belle Corp. and Solar Group, in October said it proposed to spend $20 billion to build an airport and seaport near a naval and air base at Sangley Point, south of Manila.

The airport in Sangley could be up and running in four to five years’ time, All-Asia Resources said in a statement Thursday.

Air passengers passing through Manila will probably more than double to 140 million by 2035 from about 60 million in 2014, according to the International Air Transport Association. The present airport, with four terminals, is already handling traffic in excess of its capacity of 31 million fliers a year, according to IATA.

Tourism Industry

A bigger airport will help the nation’s travel and tourism industry, which accounted for6.1 percent of the economy in 2016, up from 4.2 percent the previous year, according to data from the World Travel & Tourism Council.

The government also plans to double the capacity of an airport at a former U.S. military base north of Manila.

San Miguel, the Philippines’ largest company, plans to initially build four runways with a length of 3.5 kilometers and width of 600 meters that can serve 100 million passengers annually. Eventually, the project can be expanded to 6 runways and service 150 million passengers, according to the proposal.

Shares of San Miguel rose 1.7 percent to close at 106.60 pesos in Manila Thursday, the highest price since May 2013.

The airport proposal in Bulacan, which Transport Undersecretary Roberto Lim on Wednesday said is being reviewed, will also link with San Miguel’s elevated rail project and will complement the airport in the former Clark military airbase. All-Asia said the country should have two international airports, the one in Sangley and the facility in Clark.

This is the second airport offer from San Miguel, which submitted a $10 billion plan to build an airport off Manila Bay in 2014.