Bidding a better mousetrap

Okay—it is now a brinkmanship game in media among lawmakers, government agencies, and the bidding consortia in the much-delayed P17.5-billion passenger terminal project at the Mactan Cebu International Airport—yes, the MCIA.

More than five years ago, the volume of passengers at the MCIA already breached the rated capacity of its relatively old terminal. In fact, even with its capacity at only 4.5 million passengers a year, the volume now reaches more than 7 million a year.

Everybody in the business sector, particularly the giant conglomerates dying to invest in infrastructure projects of the Aquino (Part II) administration, thus took a long good look at the prospects of the P17.5-billion MCIA terminal project.

Look, boss, six loaded conglomerates with cash flowing out of their ears, actually, decided to take part in the bidding held by the DOTC last December, including the Ayala group, San Miguel, Metro Pacific, Filinvest and the Lopez group.

But it seems that the DOTC, or the Department of Transportation and Communications, which is the implementing agency for this critical project in one of the country’s air transport hubs called Cebu, made a mess out of the bidding.

Lawmakers called for an investigation when alarming questions erupted on the DOTC bidding and the financial capability of the highest bidder—the consortium of Megawide Construction Corp. and the Indian company called GMR Infrastructure Ltd.

And then, just a few days ago, in the latest of the endless spectacle of the MCIA bidding mess, Sen. Serge Osmeña (who comes from Cebu) issued a statement scolding PPP Center executive director Cosette Canilao.

Osmeña, who is vice chair of the Senate public services committee, currently investigating the DOTC bidding mess for the MCIA project, issued a press statement calling some announcements of Canilao as “highly irregular.”

It seems that news reports quoted Canilao as saying that “the DOTC is abiding by its end-March deadline target of awarding the multi-billion-peso contract” to GMR-Megawide.

In effect, the DOTC already made a decision to dismiss the protest filed by the second highest bidder, the consortium of Filinvest and the Singaporean company Changi International Airports, asking the DOTC to disqualify the GMR-Megawide consortium.

Now, the MCIA terminal project is one the priority projects of the Aquino (Part II) administration in the PPP (public private partnership) program of our leader Benigno Simeon—aka BS—assigned to the PPP Center headed by Canilao.

But according to Osmeña, the PPP Center has no authority whatsoever to decide on anything regarding the MCIA bidding, because as far as PPP projects as concerned, the PPP Center is only a recommendatory body.

In a way, the center is something like, you know, well, what is facetiously known in the business sector as “sul-sul-tant,” or a consultant who is also what is known in the vernacular as “sulsulero.”

Anyway, Osmeña pointed out the final decision on the bidding results does not even rest on the DOTC, not even its PBAC, its prequalification bids and awards committee, because it really lies on the MCIA Authority, the owner of the airport.

As it turned out, from what I gathered, the DOTC in fact has yet to make a decision on the issues raised by Filinvest-Changi regarding the violation of bidding rules committed by the GMR-Megawide consortium.

But then Canilao issued a press statement denying the report quoting her that, in effect, the DOTC was set to award the P17.5-billion project to the GMR-Megawide consortium that also promised to give the government P14.4 billion for the contract.

Thus, according to the press statement issued by the PPP Center, Canilao did not state that the MCIA contract would be awarded to GMR-Megawide in any of her interviews in media.

Well and good. It is possible that somebody else used Canilao to give the impression in media that the GMR-Megawide was certain to bag the big MCIA contract, possibly to pre-empt any other opposition to the consortium.

For one, word goes around the business sector that it was in fact the propaganda line of the consortium that its spin doctors were peddling to media outfits, both newspapers and television networks. You know —GMR-Megawide is it!

But here is the thing: Canilao did call the Filinvest-Changi consortium as the “losing bidder,” indicating that there was already a “winning bidder,” during the investigation at the House of Representatives into the DOTC bidding mess.

Well, Canilao’s booboo during the congressional hearing could have been just a slip of the tongue. Still, word goes around the PPP Center has been pushing for the GMR-Megawide consortium.

One congressman even noted that out of the four biddings for PPP projects in which the construction group Megawide took part, the company actually won three, although it has been delayed in the projects, particularly the construction of classrooms.

By the way, during the congressional hearing, Canilao also defended Megawide regarding the delayed PPP classroom projects, putting the blame squarely on the Department of Education, which according to Canilao, did not do its part of the contract.

In the congressional hearings, anyway, you may be interested in the viewpoint of Cebu Rep. Ace Durano, the former tourism secretary, who hinted that the DOTC might have been short on diligence in the bidding for the MCIA project.

Listen to Durano: “At the end of the day, most of these airports look the same … partly it’s about structure … but at the end of the day, it is about operational efficiency and the capability of the operator.”

As it turned out, the DOTC actually only issued some “minimum performance standards” that the prospective bidders must meet in order to join the DOTC bidding, which included their proposals on how to finance the projects.

After the “minimum” screening, the bidders may join the financial bidding, in which the one and only criteria was for the bidder to beat the other bidders in the amount of money that they all would be willing to give to the government for the contract.

And that was it! Indeed, the financial bid is the one and only criteria, carrying the most weight in the DOTC process! And what if the bidder just submits an impossible figure to assure a “win” in the financial bidding! To hell with what comes next!

Durano thought that something important was missing in such a process. Really, how do you test the financial capability of the bidders just be asking them to submit just their “plans” on how to finance the P17.5-billion project?

Durano concludes: “It is a standard management tool in designing anything that you have a scorecard. And it is not a scorecard if there is only one factor that you measure.”

Really now, Durano was harping on a rather simple point: Why was everything centered on the financial bid, when the bidding actually should be about building a better mousetrap?

I hope that Osmeña was only being funny when he said that the DOTC, in the screening process for who could and could not join the bidding, just had all of two pages of report on the qualifications of the bidders.