Super consortium’s Naia bid challenged

The tandem of Megawide Construction Corp. and India’s GMR Infrastructure yesterday served a formal notice that it would challenge the “super consortium” of seven Filipino conglomerates in the race to shape the destiny of the crown jewel of Philippine airports.

Megawide-GMR announced it had submitted an unsolicited proposal to rehabilitate, expand and operate Manila’s Ninoy Aquino International Airport (Naia), the country’s busiest air gateway, and to solve its congestion woes.

The pair will compete with the P350-billion proposal submitted by the consortium composed of Ayala Corp., Aboitiz Equity Ventures, Alliance Global Group Inc., Asia Emerging Dragon, Filinvest Development Corp, JG Summit Holdings Inc. and Metro Pacific Investments Corp. on Feb. 13, 2018.

Megawide-GMR’s proposal differs significantly in several aspects, most notably in size and scope.

Its offer is valued at $3 billion (P150 billion), since it does not cover the construction of a third runway for Naia, citing issues such as land constraints and complex infrastructure, assuming it will be built in Manila Bay. A third runway was included in the super consortium’s proposal.

Megawide-GMR noted its offer was “technically responsive” as it sought to increase Naia’s capacity to 72 million passengers yearly and air traffic movements by 50 percent. Moreover, it sought a concession period of 18 years, or about half the 35 years under the super consortium’s offer.

The concession period is seen as a key element, given that the government has yet to determine if and for how long Naia will remain Manila’s main gateway. This is due to the physical constraints of its location and separate private sector proposals for the construction of new international airports in Bulacan and Sangley, Cavite.

It was also important for Megawide-GMR to give a considerably different offer because of the way unsolicited projects are evaluated in the Philippines. Under the Build Operate Transfer Law, the implementing agency uses a “first in time approach” when reviewing multiple proposals for the same project.

For Megawide-GMR, Naia can see big improvements if it will “optimize” existing airside infrastructure, said Andrew Harrison, one of the consortium’s authorized representatives.

The Naia complex handles more than 40 million passengers yearly against its designed capacity of only 30 million passengers a year.

“As an experienced private operator, we have a deep understanding of the problem experienced by Naia and we would like to offer our take-on solution,” said Louie Ferrer, another authorized representative.

Within 24 months, Megawide-GMR said it would rehabilitate the existing terminals and double the space to more than 700,000 square meters. It will also build new taxiways, rapid exit taxiways and extend Naia’s secondary runway.

Under its proposal, Megawide-GMR also offered to pay the government yearly concession fees and a share of revenues.

Megawide is a local contractor that has diversified into infrastructure while GMR operates the New Delhi and Istanbul airports. Both partnered in 2014 to win the Mactan-Cebu International Airport public private partnership contract, edging out much larger conglomerates.

The tandem tapped United States-based Mitre Corp. as technical partner. The super consortium earlier enlisted the help of Singapore’s Changi Airport Group for its proposal.

Should the Duterte administration accept and approve either private sector offer, a competitive challenge will be held.