DOTC allows more firms to bid for P17-B Cebu airport project

Citing the need for broader competition, the Department of Transportation and Communications (DOTC) has allowed companies with stakes in airlines to participate in the P17.5-billion Mactan-Cebu International Airport (MCIA) development project.

This is a reversal from the earlier position taken by the DOTC to ban companies with stakes in airlines from taking part in the bidding for the crucial project.

The turnaround was in response to separate appeals by conglomerates San Miguel Corp. and Gokongwei-led JG Summit Holdings Inc., which both own local airlines, to lift the ban.

“After careful evaluation and deliberation on the best policy to adopt for the new Mactan-Cebu International Airport Terminal Project that would both maintain a level playing field and allow the infusion of expertise and experience into the operation of the new terminal, we have decided to modify our ITPB (instructions to prospective bidders) for the project,” Transportation Secretary Joseph Emilio Aguinaldo Abaya said.

The new rules were released following a bids and awards committee (BAC) meeting on Friday.

Under the new rules, posted on the DOTC’s website Friday evening, companies with interests in airlines and entities having any relationship with an airline company may own up to a maximum of 33 percent of the shares in the winning bidder’s Special Purpose Company (SPC).

The DOTC said, however, that a ban on the direct involvement of any airline company in the project would remain in effect.

The restrictions on companies with stakes in airlines were originally intended to avoid conflicts of interests that may arise from the situation of having one company operating an airport serving its competitors.

In its statement, the DOTC said it would include strict competition safeguards in the concession agreement to ensure that all airlines are given fair treatment at the airport. The DOTC declined to specify what safeguards would be put in place.

The P17.5-billion project involves the construction of a new world-class international passenger terminal building in MCIA, with a capacity of about 8 million passengers per year; renovation and expansion of the existing terminal; installation of all the required equipment; and the operation of both new and existing facilities.

When this new international terminal building is completed, the existing terminal, which currently caters to both domestic and international passengers, will be converted into an exclusively-domestic passenger terminal.