Incheon cleared for Cebu airport bidding

The transportation department is allowing South Korea’s Incheon International Airport Corp. to participate in next week’s auction for the expansion and operations of the Mactan-Cebu International Airport after it decided that the company did not enjoy any “undue advantage” as alleged by a rival group.

A source with knowledge of the matter said the Department of Transportation and Communications’ bids and awards committee recently ruled in favor of Incheon, the foreign partner of conglomerate San Miguel Corp.

This means all seven pre-qualified groups would be allowed to proceed with the P17.5-billion Mactan-Cebu Airport public private partnership auction scheduled this Nov. 28, the source said.

The issue was initially raised by a rival consortium led by Metro Pacific Investments Corp. and the Gokongwei family’s JG Summit Holdings, according to Metro Pacific chair Manuel V. Pangilinan in a previous interview.

Pangilinan said they were concerned because Korea Airports was tapped by the Philippine government to craft the feasibility study and master plan of the Mactan-Cebu International Airport in 2010.

Pangilinan said they had asked the DOTC to clarify this.

A second source, who was not privy to the DOTC-BAC’s decision, said both parties were asked to submit their formal comments on the matter.

The DOTC-BAC was to determine whether Incheon, which operates a world-class airport terminal near Seoul, South Korea, enjoyed advance information as a result of its contract.

Transportation Joseph Abaya, who said he was unaware of the DOTC-BAC decision over the weekend, previously noted that the DOTC’s “general attitude is to maximize competition.”

The bid submissions set on Thursday were given the green-light after Malacañang approved five revisions to the terms of the Mactan-Cebu Airport deal, which is the first airport project to be auctioned off under the PPP program.

In a Nov. 21 memorandum, the DOTC said the new terms allowed for the lengthening of the concession period from 20 years to 25 years, the transfer of operations and maintenance of the aprons from grantors to the concessionaire, and flexibility on the implementation of capacity augmentation.

The two last items are the sharing of the real property tax and increasing the duration that would prohibit the establishment of competing airports to 25 years. It was previously set at 10 years or when the airport reaches a capacity of 15 million passengers, whichever comes later.