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One-man ban

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Aha! Finally the top honcho at the Department of Transportation and Communications, Secretary Joseph Emilio “Jun” Abaya, publicly defends a remarkable creation of his boys.

The DOTC bright invention is the rule banning any group that has interest in any air transport business from any bidding for any airport project in this country. The DOTC “ban” only blocks, automatically, the biggest conglomerate in the country today, the San Miguel group, from bidding for the new terminal at the Cebu international airport. San Miguel last year announced it would bid for the project, along with the Ayala-Aboitiz consortium and the Metro Pacific group.

It so happens that only a few months ago, San Miguel closed a deal with the Lucio Tan group for San Miguel to inject $500 million into the floundering PAL for a 49-percent interest in, and management of, the national flag carrier.

And so in a recent press briefing, as Abaya tries to justify the “ban,” he says that the DOTC only wants to be careful in the Cebu project in watching out against “conflict of interest.” That was it—no further explanation. This is a P10-billion venture, which will set the tone for other multibillion-peso airport projects all over the country. The DOTC only wants to be “careful.” Abaya of course did not say that, in effect, the DOTC “ban” instantly eliminated the competition, none other than San Miguel.

It does not matter that San Miguel, as the biggest conglomerate in the country, also happens to be quite loaded with cash that it plans to invest heavily in infrastructure such as airports and toll ways. That is perhaps the reason that, inside the DOTC, during the heated debate on the “ban,” the technical career guys vehemently objected to it, pointing out that it would seem to target San Miguel alone.

From what I gathered, two high officials at the DOTC also pushed for the “ban,” namely Rene Limcaoco (undersecretary for planning) and his subordinate, assistant planning secretary Jaime Raphael Feliciano, who were both political appointees of our leader Benigno Simeon (aka BS).

From what I heard, the “ban” was only inserted into the bidding rules, which were already done in prior consultation with other government offices, when from out of nowhere Limcaoco and Feliciano suddenly pushed for it. (By the way, another guy with the surname Limcaoco, i.e. Jose Teodoro Limcaoco, is the president of BPI Family Savings Bank. I wonder how the Limcaoco in BPI Family and the Limcaoco in DOTC are related.)

Anyway, when the “ban” was still under deliberation within the DOTC, the incredible boys of our leader BS did not bother to get inputs from other government offices such as the Department of Justice regarding the legality of their clever idea. Nor was the private sector, particularly the airline companies, ever part of it all—even considering that the Cebu project is one good measure in our leader BS’s banner program, the PPP, in which the government intends to tap private companies to fund our enormous infrastructure needs.

Still, the DOTC boss himself comes out defending the “ban,” sounding like he is all for it, although he seems to be doing all the defending rather weakly. Look, the DOTC wants to be…well, “careful.”

Really, if being “careful” is what the DOTC only cares about, I wonder why the DOTC never even bothered to consult other government offices, particularly the Neda and the DOJ, regarding the controversial “ban” since it obviously targeted one and only company that happens to be the biggest cash-loaded conglomerate in the country today.

Besides, the DOTC seems to set aside the fact that airport operation is a highly regulated business. And so is the airline industry, for that matter. Do I take it that, by being “careful,” the DOTC does not trust the government to do its job in preventing airline companies and airport operators from doing any foolishness?

I mean, really now, when airport operators and airline companies do wrong, the government is not exactly powerless to make them suffer for their foolhardy ways. Abaya’s feeble defense of the DOTC-imposed “ban” implies that the DOTC is really the one government body that initiated it. It was not. My information is that some other group actually proposed it.

From what I heard, this little-known government office called the PPP Center got a little whisper from one of the proponents to push for the disqualification rule in the Cebu project bidding. Word went around business circles that the proponent actually approached the head of the PPP Center, Cosette Canilao.

Here is another info: On the sidelines of the recent press briefing, Abaya nevertheless intimates that the idea of the “ban” really came from outside the DOTC. What do you think—perhaps some other bidders are afraid that San Miguel is really capable of coming up with the best bid for the Cebu project? If that is the case, the eventual winner can only be the second-best. In short, we do not get the best deal. Again.


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Tags: Air Transport , bidding , Business , Cebu international airport , Department of Transportation and Communications , Philippines

  • http://www.facebook.com/profile.php?id=734120123 Kat Usita

    w

  • http://profile.yahoo.com/SYG36KOOLRY47VA3ICPJJ5CQTQ ADD

    DOTC is right, there’s a conflict of interest that can marginalized other airlines (Cebu, AirAsia, foreign airlines, etc.) if San Miguel gets the contract.

    CR Banal is pro-San Miguel this time, I don’t know why. Maybe he’s the new padrino of Ang.

  • http://pulse.yahoo.com/_PN3VRDYP7ZZDTUHWG5R7RJSXWM raul n

    me think the ban is good because airport and airline are inter related or affiliated businesses. i think in u.s. cases are filed because this fall in anti-trust practices in business.

    • http://pulse.yahoo.com/_PN3VRDYP7ZZDTUHWG5R7RJSXWM raul n

       i think DOTC also learn from the mistakes in NAAI 2 where the usage is monopolized by PAL.

    • eirons1043

      sorry raul this country has no Anti-Trust Law and will never have one with the kind of congress and senate and of course elected Presidents we have. Oh I forgot the kind of judiciary we have  which rots to the core also. Bit I will agree with the inexperienced Abaya if his purpose is to really have compettion among airlines.

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

    I was told the 2 Limcaocos are brothers and let us not forget the BPI Family Savings Bank is owned by the Ayalas! Now THAT is conflict of interest.

    I believe Mactan would be managed well by the Ayalas, but we should be fair to everyone. The truth behind the airport PPP is that everything (and I mean everything) the airport can charge is regulated by the gov’t and subject to public hearing, so there is really no way an airline can operate the public airport and have “conflict of interest”.

    The loophole is that the airline builds their OWN (private) airport. Then they can charge anything they want because no gov’t funds were used. Helloooo! Isn’t that what San Miguel/PAL wants to do?

    The DOTC should wake up! It is better to let them play (or rather bid) under the DOTC’s rules rather than let them loose, build their own airport, then charge whatever they want and not be able to control it.

  • OFW_Investor

    SMC can deploy its investment funds elsewhere. While this ban may not pass the smell test, businessmen will definitely not invest where they are not wanted. There are still a lot of low hanging fruits to be taken, SMC actually has enough on its plate.

  • http://www.facebook.com/profile.php?id=1173108837 Manuel C. Diaz

    DOTC – DEPARTMENT OF TECHNICAL CORRUPTION



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