Wednesday, September 19, 2018
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Fooled a fast one

Just when everybody thought that the Aquino (Part II) administration would not only pay lip service to its slogan about the straight and narrow path, some brilliant guys at the DOTC just pulled a fast one in the bidding for a fat P10-billion government contract.

That is of course the Department of Transportation and Communications, now headed by a former congressman, Joseph Emilio “Jun” Abaya, who took over from a former senator, Manuel “Mar” Roxas, who in turn became head of the politically strategic DILG.


Under Roxas, the DOTC set in motion a project to build a new airport terminal in Cebu, where the existing terminal could only handle some five million passengers a year, while the volume of passengers was already between six and seven million.

In short, the Cebu airport is a pretty crowded place. So, the Aquino (Part II) administration wanted the Cebu airport terminal to be one the shining examples of business-government partnership under its program called PPP.

Three private groups already announced interest in the project, namely, the Ayala-Aboitiz consortium, the Metro Pacific group and the San Miguel conglomerate.

All of a sudden, on Dec. 27, just when everybody was on a relaxed mode during the Christmas season, the DOTC released a bombshell in the bidding rules on the Cebu project.

Under the new rule, with its impossible name “instructions to prospective bidders,” the DOTC disqualified bidders with interest in any airport transport business in the country.

The new rule should eliminate one of the most serious contenders, the San Miguel conglomerate, which recently injected $500 million into the struggling national flag carrier, PAL, thus acquiring 49-percent ownership.

From what I gathered, the DOTC really targeted the San Miguel conglomerate in the disqualification rule, apparently to favor the Ayala-Aboitz consortium.

According to earlier reports, the consortium partnered with a Canadian firm, ADC & HAS, to bid for the Cebu project. It was none other than ADC & HAS that first brought up the disqualification rule.

Word went around business circles that the Canadian company approached the head of the PPP Center, Cosette Canilao, to propose the disqualification rule to the DOTC.


As everybody knows, our leader, Benigno Simeon (aka BS), created the PPP (public-private partnership) Center to speed up projects in its infrastructure modernization drive.

If the disqualification rule came from PPP Center, and it was not initiated by the DOTC itself, the move is simply known in business as SYA—you know, “save your ass!” Look, boss BS, it was the PPP Center!

But nobody can say whether the DOTC really thought it was about to fool anybody in that fast-one disqualification rule.

Word has it that the career guys in the DOTC were against the rule, except two officials—Undersecretary for planning Rene Limcaoco and his subordinate, assistant planning secretary Jaime Raphael Feliciano, both appointed by our leader, BS.

Anyway, it has been known in business that the most serious competitor of the Ayala-Aboitiz-ADC-HAS consortium should be the San Miguel conglomerate.

The Metro Pacific group merely announced its interest in the project in media, but it did not give visible signs of seriousness in getting the P10-billion contract.

Anyway, the disqualification rule immediately eliminated the toughest competitor of the Ayala-Aboitiz-ADC-HAS consortium in the bidding, San Miguel, which is not only the biggest conglomerate in the country today but also the biggest food and beverage company in the entire region.

Moreover, of all the various business conglomerates in the country today, San Miguel is the only well-established group that has an existing airport project, the one in Caticlan, which will serve the huge tourism market of Boracay island resort.

And the DOTC targeted San Miguel for disqualification in the Cebu project?

From the looks of it, the disqualification rule was the handiwork of the DOTC alone, since the department never consulted the business groups. Moreover, it never consulted the Neda, which was supposed to be on top of huge government projects.

On Dec. 17, of course, the DOTC sent out word of invitation to the airline industry to attend a meeting regarding the Cebu airport project. The department issued the invitation via e-mail. And here’s the thing: The DOTC sent out the invitation less than 24 hours before the scheduled time. Naturally none of the airlines were able to attend.

Because nobody in the airline industry could attend the last-minute meeting, the DOTC simply did not make even just any feeble attempt to reschedule the meeting.

From what I gathered, the terms of reference of the Mactan airport project were already done by that time. And for sure San Miguel was the target.

Question: Is the disqualification a well-established practice in Canada or other countries? Another question: Does Canada have strict rules against Canadian companies taking part in hanky-panky deals with foreign governments.

And still another question: What is the legal basis of the DOTC’s brilliant rule to disqualify San Miguel?

Earlier rumors already went around in business that two former lawmakers who joined the Cabinet already ordered the head of the Mactan airport authority to work on awarding the contract to the Ayala-Aboitiz-ADC-HAS consortium by eliminating San Miguel from the bidding.

Unfortunately, the weird invention of the DOTC immediately removes big groups with interest in airlines from taking part in any future airport projects, which are aside from San Miguel, the Lucio Tan group, the Summit group of taipan John Gokongwei, cash-loaded Antonio “Tonyboy Cojuangco,” and emerging taipan Freddie Yao (banking and beverage manufacturing), who recently bought Zest Air.

Final question: How can the government get the best bid?

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TAGS: Air Transport, Ayala-Aboitiz consortium, bidding, Cebu airport, Department of Transportation and Communications, Philippines
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