Private firms drawn to gov’t infra projects

www.megawide.com.ph photo

THE GOVERNMENT’S road projects, which used to be riddled with controversies, are starting to attract private contractors who previously shunned state-funded ventures.

Newly listed construction and engineering firm Megawide Construction Corp. is one such contractor now keen on doing business with the government. It has expressed its intention to work on projects worth at least P1 billion, top officials told reporters after the company’s annual stockholders meeting late Tuesday.

The company prefers to undertake national road projects of the Department of Public Works and Highways rather than the smaller roadwork of local governments.

“We’re very interested in joining those projects. We attended bidding and pre-qualification conferences,” said Megawide chair Michael Cosiquien.

According to Megawide president Edgar Saavedra, more private sector participants are now interested in state-initiated projects, in line with the government’s focus on infrastructure building through public-private sector partnership.

In the past, many private contractors avoided government road projects due to perceptions of large-scale bid-rigging. This concern came to the fore in 2007 when the World Bank scrapped a major road-building project allegedly due to corruption.

The new DPWH Secretary Rogelio Singson, at the onset of his term, vowed to eradicate bid-rigging in the awarding of contracts.

Megawide Construction, a major contractor of SM Development Corp., is keen on bagging other contracts apart from tycoon Henry Sy’s residential developer. The company believes that infrastructure building will be a major thrust in the years ahead.

Although Megawide does not expect to be a proponent of PPP projects, it is confident that it can secure contracts from the proponents.

Cosiquien said Megawide this year would likely see a substantial increase in revenue from that of last year. The slump usually encountered by construction firms in the third quarter—a wet season in the Philippines—will not apply to the company because most of its ongoing projects are high-rise buildings.

In the third quarter, the company expects to seal new deals with residential developers worth at least P5 billion.

Megawide plans to stick to construction and engineering businesses at present but, over the long-term, it will diversify into other allied businesses.

The company, founded and led by young engineers, sees DMCI Holdings, SM Investments and San Miguel Corp. as its role models for building stable core businesses and eventually diversifying operations.

In building its core business, officials said the company would continuously acquire new equipment and technology abroad to scale up operations in an efficient manner.

On stock dividend policy, Megawide chief finance officer Oliver Tan said the company would aim to consistently deliver to shareholders stock or cash dividends equivalent to 15-30 percent of unrestricted earnings each year.