SC asked to stop Mactan airport expansion

By: Tetch Torres-Tupas - 10 years ago

Mactan Cebu International Airport FILE PHOTO

MANILA, Philippines—A business group on Monday asked the Supreme Court to stop the rehabilitation and expansion of the Mactan Cebu International Airport (MCIA) by the GMR-Megawide Cebu Airport Corporation, the consortium that won the multi-billion contract

In an 11-page petition for injunction, the group Business for Progress Movement through its president, Medardo Deacosta Jr., urged the high court to stop GMR-Megawide from proceeding with the expansion and rehabilitation of the airport as well as turn-over of its operation.

The group said GMR, the Bangalore, India-based partner of Megawide “has no financial capacity to undertake the rehabilitation and expansion of the (MCIA).”

It pointed that the company even had to resort to implementing an increase in the public service charge/terminal fees to fund the rehabilitation and expansion of the airport.

It added that GMR even resorted to selling of its assets to pay its corporate debt.

It also that GMR’s revenues were badly affected when the government of the Republic of Maldives canceled the company’s $500 million contract to upgrade the Male Ibrahim Nasir International Airport.

The government of Maldives awarded the contract to GMR in 2012 but unilaterally terminated the agreement in 2012.

“The above-mentioned circumstances put in serious doubt the financial capability of GMR-Megawide to start the rehabilitation and expansion of the MCIA. Since it has no financial capability to commence the rehabilitation of the MCIA, the DOTC and GMR-Megawide then come up with the scheme of imposing an increased rate of terminal fees to cover the expansion project and operating costs,” the petition signed by the group’s president, Medardo Deacosta Jr.

The government, through the Department of Transportation and Communication (DOTC) concession agreement with GMR-Megawide, was supposed to be for the construction of the new MCIA passenger terminal beginning January 2015 up to January 2018.

Under the 25-year concession agreement, GMR-Megawide shall also develop and expand the present passenger terminal, which is expected to be completed by 2019.

The Mactan Cebu International Airport Authority (MCIAA) is proposing the increase in terminal fees for domestic passengers from the present P200 to P300 and from P550 to P750 for international travelers.

Of the amount to be shelled out by domestic travelers, at least P181 would go to consortium with the MCIA getting P76.40.

For the proposed international terminal fee, P353 would go to the consortium and P143.80 to the MCIA.