Airline owners remain banned from Mactan-Cebu airport bidding

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The Department of Transportation and Communications (DOTC) is standing firm on its decision to bar companies with airline interests from bidding for the multibillion-peso contract to develop the country’s second-largest commercial airport.

In a briefing on Tuesday, Transportation Secretary Joseph Emilio Abaya said the rule disqualifying airline groups from the Mactan-Cebu International Airport project aimed to eliminate all possible conflicts of interest.

The exclusion of companies with investments in airlines significantly narrowed the field of bidders capable—financially and technically—of taking on the P16-billion project.

“It’s the first time we are doing this and it’s a learning process. We want to dwell on the conservative side to eliminate all forms of conflict of interest,” Abaya told reporters.

The rule automatically disqualifies San Miguel Corp., which has a stake and manages flag carrier Philippine Airlines (PAL), and JG Summit Holdings, owner of budget carrier Cebu Pacific, from the project.

Apart from controlling PAL, San Miguel, through unit TransAire Development Holdings Corp., operates the Godofredo P. Ramos airport in Caticlan, the country’s gateway to tourist hotspot Boracay Island. Both conglomerates had earlier expressed interest in the Mactan-Cebu Airport project.

The remaining groups that have signified their intention to bid for the project are the partnership between Ayala Corp. and the Cebu-based Aboitiz Equity Ventures and the Pangilinan-led Metro Pacific Investments Corp.

The existing Mactan Cebu International Airport is the country’s second-biggest air passenger facility. In 2011, the airport handled more than 4.74 million domestic passengers and 1.47 million international travelers. Passenger numbers grew 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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  • ozkid

    Common sense should prevail on these. The issue about conflict of interest is absolutely irrelevant or something on that regard because after completion of the project, it will then be turnover to the government agency concern who’s responsible for its operation.

    We also need to evaluate the decisions and the position of those who’s calling the shots in DOTC. I think they got it wrong this time.

  • asdafaa qwesda

    Someone please tell me what the conflict of interest is? Given that no other government in the world recognizes such a conflict of interest I’m very suspicious.

    It is in the airlines interest to make sure the airport operates as efficiently and effectively as possible. Will the bidder also operate the airport? As far as I know they won’t. And whoever renovates the airport cannot exclude or charge a higher price to competitors for using the facilities. So where is the conflict of interest?!

    • http://pulse.yahoo.com/_V6JTYBZXUSXIDCD67ACZK7NUKM Joseph

      Even if an airline wins the bidding, what prices can they raise in the airport when EVERYTHING in the airport is regulated by the government?

      This is from the terminal fees, to take-off/landing fees, the advertising fees, and even down to the rental fees airlines pay to occupy the check-in counters. Since these are all regulated by the gov’t and are all subjec to public bidding, how the hell can conflict of interest happen?

  • http://pulse.yahoo.com/_TQXRFWGXBTLLL6GNN6566P2VN4 lius

    as predicted before, this action was done to exclude the powerhouse companies that have the financial muscle against their preferred winner, people should see beyond this action by the DOTC because this is just to let them have their way. By the way, this action by DOTC is I think a usual action by government agency if they preferred another bidder, its just in this case, its a multi-billion contract that is being wrestled with

    • http://pulse.yahoo.com/_ZEI6SHG7MUONC75TPXZRCMQIII Dominic

      It would be a conflict of interest if the gov’t would allow airlines companies to build airport.
      Airlines companies should stick what they do best, make sure airplanes fly in and out on time and most importantly make sure it is 110% safe.

    • cleoan

      totally reasonable exclusion rule…

  • http://www.facebook.com/profile.php?id=100003516764413 Jean Claude

    this is correct. i hope Ayala-Aboitiz wins the project :D

  • Copernicus99

    The government should also bid out the construction and development of modern passenger terminals in major tourist destinations such as Bohol, Puerto Princesa, Coron, Naga, etc. in order to aid the growth of tourism in the country. Obviously, the government does not have the funds to undertake these projects in the short term. Such are better left to the private sector.

  • picker_blend

    finally! a government agency that notices “conflict of interest”! miracles do happen indeed.

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