Synergy is the secret sauce here.

Because of that, it will be tough for the competition to overcome San Miguel’s bid to rehab and operate the Manila International Airport complex. None of them have the synergies to bid any better.

To say that San Miguel overwhelmed the competition might even be an understatement. When the bids were opened last week, San Miguel offered government a generous 82.16 share of revenue during the contract period. This is on top of the upfront fee of P30 billion and the annuity of P2 billion government earns from privatizing operations of an airport that has deteriorated into a national embarrassment.

The second best bidder, GMR Airports Consortium, offered government a measly 33.3 percent share of revenues. A consortium of taipans offered an almost hideous government share of 25.91 percent.

A number of issues have yet to be settled before the final award of the contract – including an appeal by a disqualified bidder to be re-qualified. This particular issue seems academic considering the vastly superior San Miguel offer.

By privatizing rehab and operations, government rids itself of a long-standing headache. Government also – especially with the generosity of San Miguel’s offer – opens an ample revenue stream.

Everyone expected San Miguel to turn in an awesome bid, considering how this conglomerate bid for the right to build the NAIAX. In that bidding, San Miguel put in an offer of P11 billion. Metro Pacific’s second best offer of P305 million was miles behind.

I was serving on the DBP board at that time. The bank was underwriting the NAIAX bidding. When San Miguel’s bid was flashed on the electronic board, jaws dropped to the floor. There was a hush in the hall.

The late Reynaldo David, then DBP president, had a brilliant record in putting together deals. Even he was shocked at the size of the San Miguel bid. He whispered to me that Ramon Ang had “overbid.” That was the standard wisdom of nearly the entire business community.

Too bad Rey did not live long enough to see the standard business assessment of that time was wrong. The NAIAX is a most profitable business for San Miguel today. Vehicular traffic using the NAIAX is very much more than previously estimated. In