DOTC, GMR-Megawide ink Mactan airport deal

Mactan Cebu International Airport FILE PHOTO

The Department of Transportation and Communications on Tuesday signed the contract with the Filipino-Indian consortium that bagged the Mactan-Cebu International Airport public private partnership deal, paving the way for the construction of a brand new terminal by 2018.

The concession agreement was signed after winning consortium GMR Infrastructure of India and Megawide Construction Corp. completed the post-award requirements, including the payment yesterday morning of a P14.4-billion cash “premium” days ahead of the April 24 deadline.

The move marks the second PPP contract-signing for DOTC, which had been criticized for the slow pace in rolling out massive infrastructure deals.

The Cebu airport deal still faces challenges though as the award is being contested by Sen. Sergio Osmeña III in the Supreme Court after the Cebuano politician questioned GMR’s capability to undertake the project.

With the concession agreement signed, events have overtaken the filing made by Osmeña, which came a day before GMR-Megawide was awarded the project last April 4.

Transportation undersecretary Jose Lotilla noted Tuesday that the filing may, thus, need to be revised.

“The concession agreement was signed,” Lotilla said. “It depends now on what they [Osmeña’s group] are trying to restrain.”

GMR-Megawide, meanwhile, said they would proceed with the project barring any order from the High Court.

Megawide chair and CEO Michael Cosiquien said the project would turn Cebu’s airport into a word-class facility that would serve as a regional hub.

Apart from new airport facilities, Cosiquien said the GMR-Megawide consortium would develop an adjacent six-hectare property into a retail complex and hotel, but he declined to elaborate.

“This is really a project all of us can be proud of,” Cosiquien said in a prepared speech during the signing.

Referring to the DOTC, he added that the agency had “restored our faith in government by conducting a fair and transparent bid and awarding process.”

The P14.4-billion premium GMR-Megawide paid comes on top of the P17.5 billion to be mainly spent on a new passenger terminal, which would help the congested airport handle about 25 million passengers annually by the end of the 25-year concession period.

Mactan-Cebu Airport, which was meant to handle 4.5 million per year, was visited by close to seven million passengers in 2013, government data showed.

The consortium would mainly earn from the commercial development and terminal fees, which would still be regulated by the government.

GMR-Megawide, whose offer topped six other bidders last Dec. 12, was expected to assume operations of the Cebu airport by October this year, the DOTC said in a separate statement Tuesday.