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Cebu airport off limits to groups with airline stakes

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Mactan-Cebu International Airport PHOTO COURTESY OF FRANCES MANGOSING

Two of the country’s top conglomerates have been automatically disqualified from bidding for the contract to expand and manage the new Mactan Cebu International Airport—one of the Aquino administration’s key infrastructure projects.

In the project’s prequalification terms of reference, published recently for interested bidders, all groups with minority or controlling interests in airline companies are being banned from bidding for the P17.5-billion Cebu project.

As a result, San Miguel Corp. and JG Summit Holdings, both of which had expressed interest in the deal, would not get a chance to vie for the contract under the government’s public-private partnership (PPP) scheme.

The project’s terms of reference, a 71-page document posted on the Department of Transportation and Communications (DOTC) website, said that a company vying for the deal “cannot be an entity providing air transport services in the Philippines, be they domestic or international.”

Having a stake in an airline, direct or indirect, and however minute, would also be grounds for disqualification.

“Any entity providing air transport services in the Philippines, be they domestic or international, for the duration of the Concession Period: cannot be the Facility Operator; cannot have any interest, direct or indirect, in the Project or the Facility Operator; or cannot be owned by the Project SPC or the Facility Operator,” the terms read.

The published terms did not give a reason for the exclusion of companies with investments in the airline industry.

The provision banning companies with airline investments was also included in the final terms despite the absence of local anti-trust legislation.

Other terms included a minimum capitalization of P2 billion and having adequate personnel with at least 10 years of experience in similar projects.

Asked to comment on the project’s published terms, San Miguel president and chief operating officer Ramon Ang said he had not yet seen the document, adding that he “hopes” his firm will not be prematurely disqualified.

San Miguel last year acquired majority control of flag carrier Philippine Airlines (PAL), the country’s oldest carrier and the largest in terms of revenue.

Apart from controlling PAL, San Miguel, through unit TransAire Development Holdings Corp., currently operates the Godofredo P. Ramos airport in Caticlan, the country’s gateway to tourist hotspot Boracay Island.

Officials from JG Summit, which owns the country’s leading budget carrier Cebu Pacific, were not available for comment.

Other firms that have expressed interest in the project are the groups of Manuel V. Pangilinan and Ayala Corp. The latter partnered with Cebu-based Aboitiz family to make a bid for the Cebu airport facility.

A DOTC source, who spoke on condition of anonymity due to the sensitivity of the issue, admitted that the terms were published without consulting industry stakeholders and prospective bidders.

The existing Mactan Cebu International Airport is the country’s second-largest air passenger facility.

In 2011, the airport handled more than 4.74 million domestic passengers and 1.47 million international travelers.

Passenger numbers have grown at the facility at a compounded annual rate of 14.47 percent for domestic traffic, and 11.02 percent for international traffic over the last five years.


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Tags: Air Transport , bidding , Cebu airport , Infrastructure , Mactan-Cebu International Airport , Philippines

  • joboni96

    good

    bumiputra law
    at anti trust law pa

  • http://twitter.com/Candy_Cuties Maxene

    Great! Ayala-Aboitiz are surely going to win this bidding :D

  • themask celestial

    I just came from trip overseas and shocked to see the recent acquired trolley in Naia-1 most are defective now. If I am not mistaken, it acquired 2-3 months ago. Hay, so disappointing to know mukhang may kumita na naman rito. Its obvious that the trolleys are substandard. Mukhang may kailangang managot na naman dito.

  • JKG_HSA_VOSA

    Is Ayala Corp still qualified? I think they have ties with an air transport company. MERMAC or MACMER

    • http://twitter.com/Candy_Cuties Maxene

      yes. Ayala-Aboitiz are still qualified :) Aboitiz is from Cebu so expect the best :)

  • OFW_Investor

    So, what will now happen to SMC’s Plan to build the biggest airport ? We need roads, railways and airports . We need them yesterday. 

    • http://twitter.com/Candy_Cuties Maxene

      the SMC Airport Plan is in Bulacan or Cavite. this cebu airport is different.

      • OFW_Investor

        its not in Cebu for sure, what i meant is if Airline owners /Operators are not allowed in Cebu, then by extension they’re not allowed to build any Airports anywhere either. otherwise, if this is a one time thing,this bidding is fundamentally flawed as it will seek to disbar other companies that operates airlines as a business, PAL operates its own Terminal already at NAIA . 

      • http://twitter.com/Candy_Cuties Maxene

        SMC’s disqualification is due to its ownership of PAL, a would-be advantage for SMC and a disadvantage to other bidders. 

      • OFW_Investor

        Why then open it for bidders? just hand it over to the most favored bidder and get it over with.

  • http://profile.yahoo.com/4WEDVVXOMPOQ3VYGUKOAVVT574 Pedro Mateo

    It’s not good for business, they should define first the role of the operator in the PPP in the operation of the MCIA before they should put any policy restriction. . Is the government turn over the operation of the MCIA to the private sector? What are the limitations? etc. .  if the policy is polished then that’s the time the guideline in the bidding should be spell out. . Something fishy is going on to give it to preferred group. . may tongpat kasi. . 

  • julieboy

    Thats good news. If you give it to special interest groups the whole deal can hold  the government hostage and can be blackmailed on whatever they want. I hope it holds for good,as you know anything can happen in the Philippines.Get foreign money to build the infrastructure,and do a build operate and transfer scheme.

  • FreemindOnline

    Good news indeed!, even w/o the Anti-Trust Law. But are their other development companies that can comply with the “other terms”  stated?. Or is this another ploy to offer the said project to foreign development entities. It’s really hard to trust government officials on this; then what else when it comes to the future of the Filipino people.

    A dilemma for good people in government.



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