Osmeña: DOTC failed to conduct background check of Cebu airport bidder

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Wednesday, March 19, 2014

SENATOR Sergio Osmeña III on Wednesday criticized the Department of Transportation and Communication (DOTC) for failing to conduct a proper background check on the financial capability of a bidder in the Mactan-Cebu International Airport (MCIA) expansion project.

"Tinanong ko sa DOTC kung nag-due diligence ba kayo dito sa mga nag-bid? Balita ko hindi kayo nag-due diligence. May nagsabi, meron ho kaming Technical Working Group na nag-undertake ng due diligence," the senator said, referring to the bidders of the P17.5-billion airport project.

"Tinanong ko sa kanila, how long did it take you to do your due diligence on all seven bidders? 'Yung seven bidders, times two 'yan kasi may local partner at may foreign partner, 14 po lahat 'yan. Ang sabi nila, two weeks. Two weeks lang? Nasaan ang report ninyo? Meron po kaming report, pinabigay po namin sa chairman ng Bids and Awards Committee, two pages. Two pages po ang report nila. So, nakita ko na hindi talaga sila gumawa ng due diligence. They did not do a background Investigation into the bidders," Osmeña said in a radio interview.

The senator described the project as similar to the scandal involving the Philippine International Air Terminal Corp. (Piatco), a contractor of the Ninoy Aquino International Airport Terminal 3, which sued the government over its Build-Operate-Transfer contract.

Although the DOTC has yet to award the project to the winning bidder, it was alleged that the winner is the consortium of Megawide Construction Corp. and GMR Infrastructure Ltd. of India.

Osmeña said the award of the MCIA contract to the consortium of GMR Infrastructure Ltd. of India and Megawide Construction Corporation would cause a "grievous injury" not only to the people of Cebu but to "all future travelers" to and from the Visayas and Mindanao.

"Itong consortium na ito ay mukhang paborito. Ang daming projects ang na-corner niya. Marami po, marami silang nakuha na PPP (Private-Public Partnership program) projects. Megawide has already won four PPP projects, two projects magpapatayo ng school buildings. One project, 'yung National Orthopedic Hospital. Very attractive po 'yung bidding nila," said Osmeña.

At the Senate hearing last Tuesday, the DOTC Prequalification and Awards Committee (PBAC) said that it only relied on the bidders' own submission of documents.

The PBAC also admitted that it did not conduct an Internet research to check the background of the bid participants and even the track record and qualifications of the bid.

"Alam mo noon, hindi ko binibigyan ng pansin itong building, bidding of the new terminal for the Mactan Cebu International Airport. Ngunit, nagkaroon ng highest financial bidder, 'yung taga-India, ang tawag nila sa grupo nila GMR Infrastructure, partnered with the local company Megawide Construction," Osmeña said.

"Naging curious ako at nag-Google ako. Alam mo, tumaas ang balahibo ko sapagkat ako po ay nag-imbestiga ng Piatco in 2000 and 2001, kami nagpapaputok dito sa Senado nung mga kalokohang ginawa ng Piatco during and after the bidding. 'Yung mga 17 Substantial Amendments sa kontrata nila. Nabasa ko sa mga Google reports on GMR, 'yung mga galing sa India, parang Piatco ito," he added.

Senator Grace Poe and Senator Francis Escudero also quizzed GMR on its alleged violation of conflict of interest rule, which arose after it was found out that the India consortium had a stake in another consortium that also submitted a bid.

The MCIA terminal project, a public-private partnership program of the Aquino administration, is being looked upon with keen interest by local and foreign bidders, said Osmeña.

Since the awarding of the project is already expected by the end of March 2014, Osmeña said, "This is the reason why I want to further investigate this matter."

MCIA expansion project, which will be carried out in two phases over a 20-year period, is set to cover the construction of a terminal building and airport support facilities.

The project has been hounded with controversy – with allegations of a bloated budget (a study reported that the construction of the terminal would cost about a third of the current amount), conflict of interest, and of lapses in the bidding procedure.

Earlier Transportation and Communications Secretary Joseph Emilio Abaya said that Megawide, a Filipino-owned company, holds majority of the share in the consortium as per their regulations of 60 percent ownership to Filipino companies and 40 percent to foreign entities.

GMR, the Megawide partner, declared during the Senate committee hearing that it has not defaulted on any debt. In same hearing, the Asian Development Bank vouched for GMR's financial capacity.

Abaya said the contract has to be awarded soon and they expect it to happen within the month.

"Delays will only prolong the suffering of travellers." Abaya said.

But Osmeña said, "If the DOTC gives this to GMR, I'll take them to court. Para lang bumalik tayo sa Piatco scandal nyan."

The senator expressed "serious misgivings" about the corporate competence of GMR to carry out the 25-year project, citing media reports of GMR's "shaky" financial standing and its partnership with the German firm Frankfurt Airport Services Worldwide or Fraport.

Fraport was one of the companies that figured in the cancelled Piatco-NAIA deal to build a new air terminal in Manila.

Earlier, Osmeña warned that he will file charges against the DOTC if the Megawide-GMR consortium gets the P17.5-billion contract. (Camille P. Balagtas/Sunnex)

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