Megawide Construction Corp. said a massive proposal to rehabilitate and operate Metro Manila’s Ninoy Aquino International Airport (Naia) remained alive and that it submitted on Nov. 20 documents proving its financial capacity.
Megawide, a construction and infrastructure company that operates the Mactan Cebu International Airport with partner GMR Infrastructure of India, issued the statement to clarify news reports its offer had been rejected.
Megawide said this was misleading.
In its statement, the company said it was “merely asked for the full submission of the requirements” to the powerful Investment Coordination Committee of the National Economic and Development Authority (Neda-ICC).
This confirmed a report by the Bilyonaryo news website that its offer was being returned to the implementing agency through a Nov. 19 letter from Finance Secretary Carlos Dominguez III and acting Socioeconomic Planning Secretary Karl Kendrick Chua.
Dominguez and Chua are the chair and cochair of the ICC Cabinet Committee.
But Megawide said this did not mean the project was “junked” as it has the chance to submit added requirements.
It said it complied with these requirements through a new submission to the Manila International Airport Authority containing proof of its capacity to finance the project the following day on Nov. 20.
This comes after longtime partner GMR agreed to take a 40-percent equity stake in the venture.
GMR’s participation was earlier announced by Megawide during a press conference on July 16.
“Under the new arrangement, Megawide will have majority stake at 60 percent while GMR has agreed to provide 40 percent of the equity requirement for the project. GMR brings to the table sufficient financial bandwidth and unparalleled global airport operations experience,” Megawide said in its statement on Monday.
Megawide said it has “not yet received any official communication from the government” since the added requirements were submitted on Nov. 20.
A Department of Transportation official separately confirmed the proposal remained under evaluation as of Monday.
Megawide needed to boost its financial standing after the Neda-ICC said the company’s equity of P18 billion was below the required P32 billion to comply with the Build Operate Transfer rules that govern such proposals.
Projects are typically funded by 70-percent debt and 30-percent equity.
But this project differed because the Neda-ICC based the 30-percent equity requirement on the total P109-billion project cost—or P32 billion.
In previous cases, that calculation was based on project phases since these were large infrastructure proposals that take years to build.
Megawide said GMR’s participation meant they now “complied with these requirements.”
Megawide-GMR’s Naia proposal aims to cut air congestion in the premier airport that was a worsening problem before the pandemic struck. This will involve increasing passenger capacity and flights using just one of Naia’s two perpendicular runways.
The venture also plans to build an elevated railway system within the sprawling airport complex to connect its passenger terminals.
“With the company’s financial capability and tried and tested airport experience, Megawide’s proposal to rehabilitate and transform the Naia complex remains valid and the company looks forward to partnering with the national government, Naia stakeholders and civil society in a spirit of bayanihan to deliver an economic win for the Filipino people,” the company said in its statement. INQ