GMR-Megawide gets Mactan-Cebu airport project

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Saturday, April 5, 2014


(Updated) The Department of Transportation and Communication (DOTC) awarded to the GMR-Megawide consortium the Mactan airport development and management contract, three officials confirmed on Friday.

Two highly-placed sources said that the Mactan Cebu International Airport Authority (MCIAA) Board convened at the DOTC in Manila Friday morning and awarded the project, based on the recommendation of the Bids and Awards Committee (BAC) chaired by Undersecretary Jose Perpetuo Lotilla.

Both sources have first-hand information on the proceedings but declined to comment, deferring instead to the airport’s manager, Engr. Nigel Paul Villarete. Villarete declined to take calls from Sun.Star Cebu on Friday.

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However, GMR-Megawide confirmed the awarding in a press statement, in which it thanked the DOTC for “concluding a fair and transparent bid process in a highly professional manner.”

“We are delighted to be awarded the MCIA project. We firmly believe that the GMR-Megawide consortium has the right credentials and capabilities to undertake this prestigious project and deliver a world-class airport that Cebuanos and Filipinos will be proud of,” said Michael Cosiquien, chairman and CEO of Megawide Construction Corp.

Serge to SC

Just a day before the awarding, Senator Sergio Osmeña III asked the Supreme Court (SC) to stop the DOTC and MCIAA from issuing a notice of award and a concession agreement to GMR-Megawide.

Osmeña told the SC that he disagreed with the DOTC’s decision to consider GMR-Megawide a qualified bidder. The senator said that GMR Infrastructure Limited of India had violated a conflict of interest prohibition in the instructions given to prospective bidders.

GMR-Megawide has offered the Philippine Government P14.4 billion up front to handle the MCIA project. This premium is on top of the estimated P17.5 billion needed to renovate the existing terminal and build a new passenger terminal.

The contract will also cover the management of both terminals and all landside facilities of the airport, including commercial spaces, for 25 years.

Playing field

Only the SC can, by issuing a TRO, stop the project, DOTC Secretary Joseph Emilio Abaya said in a press conference in Cebu last Thursday.

He had also confirmed that the MCIAA Board was scheduled to convene on Friday, once the PBAC had submitted a resolution on the bidding.

(Villarete’s office also confirmed that the MCIAA Board met Friday, April 4, in Manila, but declined to reveal its outcome.)

Secretary Abaya, in last Thursday’s press conference, said there were “remedies available” to any losing bidder who wants to question the BAC’s recommendation.

He also said, as part of his speech during the inauguration of the Pier 1 Passenger Terminal of the Cebu Port Authority, they DOTC did its best to keep the playing field level.

“Otherwise, if you make the playing field in favor of somebody, no one will ever bid for the next project,” Abaya said.

Questions on GMR-Megawide’s capability to handle the Mactan airport project were previously raised by the second highest bidder, the consortium of Filinvest Development Corp. and Changi Airports. Their bid was P13.99 billion.

Other bidders for the Aquino administration’s first public-private partnership for an airport included SM, the consortium of Metro Pacific Investments Corp and JG Summit, San Miguel-Incheon and First Philippine Airports Consortium.

In his petition, Osmeña pointed out that First Philippine Airports includes Malaysia Airport Holdings Berhad, whose managing director, Tan Sri Bashir Ahmad bin Abdul Majid, also serves as a director in two subsidiaries of GMR.

He said the prohibition against conflict of interest “should be strictly applied.” The allegations Osmeña raised in his petition to the SC are the same ones he made in a privilege speech last February 25, 2014.

“The PBAC illegally refused to disqualify the GMR-Megawide Consortium in the face of unrefuted evidence of GMR’s poor financial health and track record in its international airport operations,” Osmeña told the Court.

GMR-Megawide no longer referred to the allegations in its statement on Friday.

“We believe that our strategic plan will result in the delivery of a very efficient, passenger-oriented and commercially sustainable airport that will provide the required capacity to meet significant growth through the redevelopment of the existing terminal and construction of a brand new terminal within three years,” said Srinivas Bommidala, chairman of the airports sector in GMR Infrastructure.

“Going forward, the GMR-Megawide consortium will be closely collaborating with Cebu-based as well as international architects and designers to develop the project.”

The bidding for the Mactan airport project has run for 15 months; the invitation to pre-qualify and bid was published in December 2012. (EOB/With IDA/Sun.Star Cebu)

Published in the Sun.Star Cebu newspaper on April 05, 2014.

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