Biz Buzz: More Cebu airport kinks
The moolah has been raised and the remaining opposition to the takeover of the Mactan Cebu International Airport project by GMR Megawide Cebu Airport Corp. (GMCAC) has been quelled. But it seems that the much-awaited construction of a new airport terminal will again be delayed (by at least half a year under the most optimistic scenario).
But this time, the delay has nothing to do with those parties that did not want GMCAC—a joint venture between Megawide Construction Corp. and Indian infrastructure firm GMR—handling this airport modernization project.
Instead, highly placed sources said that GMCAC has been caught between two government units which do not see each other eye to eye.
These units have to resolve their issue first before GMCAC can break ground for a new Cebu airport terminal. The issue has something to do with the planned relocation of the Philippine Air Force’s Cebu office structure, which is in the middle of where the new terminal is supposed to rise. Unless relocated, it’s impossible for GMCAC to jumpstart its project.
The air force has already bid out the office relocation project three times, in two of which the best bidder could not breeze through the post-qualification process.
The Megawide-led consortium itself, we heard, was among those trying to participate (because it’s in its interest to make sure the relocation would run smoothly for it to be able to start the terminal project) but was disqualified on concerns of conflict of interest.
As such, GMCAC has very few options left but to sit back and wait for the air force to pick a contractor and hopefully fast-track the relocation process so that GMCAC can move in.
So … can the air force be using this relocation issue as a bargaining chip?
We heard that there are some projects under the auspices of the Department of Transportation and Communication affecting the air force that have also been stalled for various reasons.
As of press time, the air force (for the third time) is still trying to complete the bidding process in search of a contractor that will handle its office relocation.
With this external stumbling block, Megawide may have to manage expectations by officially announcing a delay in the much-coveted airport project. The rough estimate is that the completion of Terminal 1 under the first concession agreement may have to be stretched out to three and a half years instead of just three years, as earlier committed.
The good news, however, is that many airlines have already committed to add flights to Cebu, making this a more vibrant gateway. But the airport upgrading must happen first and the delays minimized. Doris C. Dumlao
Bad loans
So there’s this well-known businessman who owns several firms operating in several industries (of which one of the larger operations is involved in a business that is currently frowned upon by the Aquino administration due to environmental concerns).
This businessman has been quite active in the political arena, mainly by supporting a candidate for national office in 2010, and it looks like he’ll be supporting the same candidate come 2016 from all indications.
Of course when you’re a businessman, support for political candidates comes mainly in the form of financial support. But this businessman is affluent enough to own a fleet of aircraft, which is an added benefit for the candidate he supports since private jets and helicopters come in handy on the campaign trail, especially on a national scale. It goes without saying that helicopters are also useful for scoping out sprawling real estate assets supposedly owned by rival candidates.
But we digress. So business has been good for this businessman of late, so much so that he has been very active supporting one particular candidate behind the scenes.
But wait … what’s this we hear that one of the larger firms he owns owes several financial institutions (including a government bank and a quasi-government bank) so serious money?
How serious is “serious money”? Let’s just say about P8 billion worth of outstanding—and, mind you, past due—loans.
This was confirmed by our sources who pointed out that this businessman’s company (a former government firm that was privatized a few years ago) has left a number of banks worried and fretting.
You see, of the P8 billion in obligations, only P3 billion is covered by a guarantee from the Philexim Bank. And half of that P3 billion was lent by foreign-based Standard Chartered Bank, whose loan officer was clearly smart enough to agree only to a loan covered by an airtight guarantee.
The unsecured portion is shared by several banks, including P1 billion owed the government-owned Development Bank of Philippines. Ouch.
The balance is owed by this businessman’s firm to the likes of Philippine National Bank, United Coconut Planters Bank and Malaysian-owned Maybank.
Perhaps his active involvement in political operations is distracting him from his financial obligations. Daxim L. Lucas
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