DOTC awards Mactan airport deal to Megawide-GMR
An expanded “world-class” international airport for Cebu, one of the country’s busiest tourism and business hubs, may soon be underway after the Department of Transportation and Communications (DOTC) finally awarded the coveted public-private partnership deal late Friday.
Megawide Construction Corp. and India’s GMR Infrastructure, the frontrunner in the bidding, was named the winner for the government’s first airport PPP, after the DOTC resolved issues raised by the second-closest bidder that delayed the process by almost three months, transportation department spokesman Michael Sagcal confirmed Friday.
Sagcal said a formal statement was expected to be issued Saturday while Megawide was already informed Friday night.
The DOTC bids and awards committee made the decision Friday, a few days past a self-imposed deadline it had given to lawmakers, who sought an inquiry into the bidding process for the P17.5 billion project.
The award resolves allegations raised by No. 2 bidder Filinvest, a partner of Singapore’s Changi, over the financial capability of GMR, which operates airports in New Delhi and Hyderabad. Filinvest, which sought the disqualification of Megawide-GMR, also alleged there was a violation of the conflict-of-interest provision.
Megawide-GMR, which was expecting an award as early as January. 6 this year, has denied all allegations.
Developments at the Mactan-Cebu Airport, the country’s second-busiest, are being closely watched by investors given its potentially lucrative position as a key gateway to one of the biggest Philippine tourism and business hubs outside Metro Manila.
The PPP deal drew a total of seven bidders, which included the country’s biggest conglomerates, including San Miguel Corp., Ayala Corp., Metro Pacific Investments and JG Summit Holdings.
Despite being a much newer player, Megawide and GMR topped all other bids with a P14.4-billion offer, edging out even the proposal of the SM Group, controlled by the country’s richest man Henry Sy, owner of a minority stake in Megawide.
Filinvest-Changi’s offer came in second at about P14 billion.
All bids received by the DOTC last December were “premium” offers, meaning this money would go directly to the government and would come on top of the cost to develop the airport.
The award to Megawide-GMR may still be contested by its chief rival and even lawmakers.
Sen. Sergio Osmeña III, one of the most vocal against the Megawide-GMR consortium, threatened to sue to the Transportation Department should the award go to the Filipino-Indian group as he cited lapses in the bidding process.
It should be noted, however, that only a Supreme Court order can halt an infrastructure project like the Cebu airport PPP.
The Mactan-Cebu International Airport project, which is running beyond normal capacity, will entail the construction of a new world-class international passenger terminal building with a capacity of about eight million passengers a year, the department had previously announced.
The facility has an annual capacity of 4.5 million passengers, but it handled close to seven million passengers in 2013.
The winner of the Mactan-Cebu International Airport PPP will operate the facility for 25 years.
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