San Miguel Gets 50-Year Franchise for Airport City Project in Bulacan as Bill Lapses into Law

Jan 2021

San Miguel Corporation’s (SMC) subsidiary, San Miguel Aerocity Inc (SMAI), was granted a 50-year franchise to build, operate and maintain a domestic and international airport in Bulacan after the measure lapsed into a law. The measure, known as House Bill 7507, turned into law as Republic Act No. 11506 (RA 11506) after President Duterte did not sign the bill 30 days after it was transmitted to the President’s office.

Under the law, SMAI was granted a franchise to construct, develop, establish, operate, and maintain for commercial purposes and in the public interest a domestic and international airport in barangays Taliptip and Bambang in the town of Bulakan in Bulacan. It also allows SMAI, its successors, or assignees to construct, acquire, lease, operate or manage such properties which are convenient or essential to efficiently carry out objectives of the RA 11506, such as toll roads, railroads, mass transport systems, hotels, warehouses, hangars, aircraft service stations and other facilities, as well as to develop the areas adjacent to the airport into one integral and comprehensive development.

SMAI is given one year to construct the PHP 736 billion (USD 15.3 billion) from the effectivity date of the law and should start commercial operation within the next 12 years. During the construction period, SMAI will be exempted from all direct and indirect taxes for a maximum of 10 years.

Meanwhile, SMAI has chosen Dutch company Royal Boskalis Westminster N.V. through its subsidiary in the Philippines, Boskalis Philippines Inc. for the land development design and construction of the airport. The contract for the 1,700 hectares land is USD 1.73 billion, and the preparatory work will start in the first quarter of 2021 and is expected to be completed by 2024.

Boskalis has undertaken major projects across the world, which include Singapore’s Tuas Terminal Phase 2 port and its Tekong polder projects, South Korea’s Songdo International City, Punta Pacifica Islands in Panama, the five islands in Makassar in Indonesia, and the Ijburg residential area in Amsterdam.

(Sources: CNN Philippines; The Philippine Star; Royal Boskalis Westminster N.V.)

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