SC urged to stop Mactan airport rehab

By: Jerome Aning, Miguel R. Camus - 10 years ago

A group of businessmen asked the Supreme Court on Monday to stop a private consortium from undertaking the multibillion-peso expansion and rehabilitation project for the Mactan-Cebu International Airport (MCIA) that the Department of Transportation and Communications awarded last April. FILE PHOTO

MANILA, Philippines–A group of businessmen asked the Supreme Court on Monday to stop a private consortium from undertaking the multibillion-peso expansion and rehabilitation project for the Mactan-Cebu International Airport (MCIA) that the Department of Transportation and Communications awarded last April.

The Business for Progress Movement (BPM), led by its president Medardo Deacosta Jr., claimed the winning bidder, GMR-Megawide Cebu Airport Corp., had no financial capacity to accomplish the project and would cause the public “grave and irreparable injury” once it assumed operation of the airport.

In its 11-page petition seeking the issuance of a temporary restraining order and writ of preliminary injunction, BPM said the consortium, composed of Megawide Construction Corp. and the India-based GMR Infrastructure Ltd., had to increase terminal and other service fees at the airport just to cover expansion and operating costs.

BPM, an association advocating the development of small- and medium-scale industries, claimed that it had learned from international business news reports that GMR, based in Bangalore, India, was “debt-ridden” and financially unstable so much so that the firm had to resort to various means to raise funds such as asset sale and equity issuance to allow it to pay its corporate debt.

The group also said GMR’s revenues were badly affected when the government of Maldives canceled the company’s $500-million contract to upgrade the Ibrahim Nasir International Airport in the island-state’s capital Male in 2012.

“The above-mentioned circumstances put in serious doubt the financial capability of [GMR-Megawide] to commence the rehabilitation and expansion project of the MCIA. Since [GMR-Megawide] has no financial capacity to start the rehabilitation of MCIA, both [DOTC and GMR-Megawide] had come up with the scheme of imposing an increased rate of terminal fees to cover the operating costs and expansion of the project,” the petitioner said.

The MCIA Authority has proposed 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 the 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.

The DOTC had said that passengers using the MCIA, the country’s second-busiest air gateway, should expect enhancements such as faster passenger processing and new toilets within three months as a private sector group assumed operations last Nov. 1.

The takeover of the 25-year operations and maintenance contract of the MCIA by the consortium of Megawide and GMR Infrastructure was in line with a P17.5-billion public-private partnership (PPP) deal that they bagged earlier this year.

Megawide-GMR also plans to build a new passenger terminal scheduled for opening by 2018, after which the existing passenger terminal will be refurbished further, with completion seen in 2019. The opening of the new terminal will allow MCIA to handle 12.5 million passengers from the current 4.5 million people annually.

“One of the first improvements will equip the immigration section with passport readers and computers and will relocate it to a larger area. This will shorten queuing time and maximize the use of airport space,” the DOTC said.

It added that basic airport facilities would also be modernized through interior design improvements. “These include simple enhancements such as importing new seats for the waiting areas and rehabilitating comfort rooms. In addition, an air-conditioned room will be constructed at the arrival area to accommodate greeters and well-wishers,” it said.