The House of Representatives yesterday approved on third and final reading a bill which seeks to grant the conglomerate San Miguel Corp. (SMC) a franchise to build and operate an airport in Bulacan.
Congressmen voted 218-6 with two abstentions to approve House Bill 7507, which grants SMC subsidiary, San Miguel Aerocity, Inc. a franchise to construct a domestic and international airport in the municipality of Bulakan, Bulacan and develop an Airport City in the area.
Under the bill, the franchise shall be in effect for 50 years, which includes the 10-year maximum period for the construction of the airport and the Airport City.
The bill requires San Miguel to begin construction of the airport within one year from the effectivity of the law, complete the construction in ten years and commence operations within one year from the approval of the operating permit from the Civil Aviation Authority of the Philippines.
SMC is also required to turn over ownership of the P734-billion airport to the government agency or local government unit concerned after the expiration of the 50-year franchise.
The bill also gives the President the right to temporarily take over and operate the airport facilities, temporarily suspend operation of the airport in the interest of public safety, security and public welfare or to authorize its temporary use and operation by any agency of the government in times of war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order.
San Miguel is prohibited from leasing, transferring, selling nor assigning the franchise or the controlling interest thereof without the prior approval of Congress.
During the construction period, the grantee shall be exempt from any and all direct and indirect taxes, including income taxes, value-added taxes, percentage taxes, customs duties, and tariffs, business taxes, franchise taxes, and supervision fees.
Under the profit-sharing provision in the bill, the grantee shall be entitled to generate income from the Airport City equivalent to a project Internal Rate of Return (IRR) of 12 percent per annum.
The bill said any amount in excess of the 12 percent IRR of the Airport City shall be remitted to the national government.
