Top rivals in bidding eye resolution to issues

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Thursday, March 20, 2014

THE highest bidder for the Mactan airport expansion project, GMR-Megawide consortium, yesterday said they were ready with the P14.4-billion check, representing the upfront premium for the project.

Consortium officials urged Cebuanos “not to allow efforts to sabotage” the awarding of the contract to expand and operate for 25 years the Mactan Cebu International Airport (MCIA).

“At the end of the day, there is a process to be followed. There has been a transparent and competitive bidding process. Everybody knew what the rules were," Andrew Harrison, deputy chief executive officer of GMR Infrastructure Ltd., said in a press briefing yesterday.


The consortium, in a statement distributed during the briefing, described the “baseless” allegations against them as apparently intended “to delay the implementation of the project.”

The Senate Committee on Public Services, which has taken up some of these allegations, is scheduled to resume its public hearing on the project next week.

During its hearing last March 11, the committee learned from Undersecretary Jose Lotilla of the Department of Transportation and Communications that the Prequalification, Bids and Awards Committee (PBAC) hoped to “close all of the issues before the end of this month.” Lotilla heads the PBAC.

It has been 15 months since the invitation to prequalify and bid for the project was first published.

GMR-Megawide's bid of P14.4 billion—on top of the estimated construction cost of P17.5 billion—was the highest among the seven bidders that prequalified for the Mactan project.


The second highest bidder, Filinvest-Changi Airport consortium, offered P13.99 billion. It has since raised some of the questions against GMR-Megawide, including an
alleged conflict of interest involving GMR and First Philippine Airports consortium.

The latter includes Malaysia Airports Holdings Berhad, which is a shareholder in the
GMR airport projects in New Delhi and Hyderabad.

Harrison said they believe in the transparency and openness of DOTC and the PBAC in conducting the bidding.

“We have participated in that with faith. We find it materially unfair that we are in the position where allegations that have no substance are being leveled against us. We will answer them truthfully, and we have nothing to hide,” the deputy CEO added.

He pointed out that GMR is the third largest private airport operating company in the world and has investment-grade ratings for long-term loans, as well as testimonials from the Asian Development Bank, International Finance Corp. and Standard Chartered on its “good financial standing in the context o the project financing requirements for the Mactan-Cebu project.”


Harrison assured the Cebuano public that a new, modern passenger terminal would open three years after they assume operations. For, the first six months, they will focus on renovating the existing terminal, which will include replacing all the comfort rooms and seating and improving the “processing efficiency” to spare passengers from long lines.

GMR Communications Group Head Manish Kalghatgi pointed out that the bidding process has run for a year. Raising questions “at this stage, when the highest bidder has already been named, is, I think, stopping the process and creating hurdles in the process. So, whether or not they are in violation of the bidding rules, that's for DOTC to answer,” Kalghatgi said.

Last Wednesday, Filinvest Development Corp. (FDC) and Filinvest Land Inc. (FLI) officials also held separate meetings with Cebu-based journalists, but declined to discuss the airport project at length.

But if the Filinvest-Changi consortium is awarded the Mactan airport project, “we will spare no cost to make it a world-class facility,” said Eleuterio Coronel, FDC executive vice president and chief operating officer.

Cebu projects

He pointed out that the Gotianun-led Filinvest companies, whose interests include banking, hotels, real estate and business process outsourcing, have about P50 billion in ongoing and upcoming projects in Cebu.

“That's why we are very concerned about the airport. We would like it to really be of the best quality as possible, a world-class airport, because it will promote the tourism and economy of Cebu,” Coronel said.

He cited the experience of Changi, whose activities reportedly contribute nine percent of the gross domestic product of Singapore.

“In other words, if something is done well, especially the airport, it could produce a lot in terms of providing jobs, taxes and all these things that have a great impact on the economy,” Coronel said.

Incidentally, Megawide is the contractor of a P1.2-billion Filinvest project in Cebu, representatives of both companies confirmed.

“FLI has been here for quite a while and we want to continue investing and come up with projects that will make landmarks in Cebu,” said Tristan las Marias, FLI's first vice president for the Visayas and Mindanao. "We remain committed to that vision."

During the Senate committee hearing last March 11, committee chair Sen. Serge Osmeña III reminded the DOTC to bring all documents on the due diligence performed for the Mactan airport project. He also said the committee intended to examine the objections raised by Filinvest-Changi, in addition to 'questioning the delay in the award” of the project.

Published in the Sun.Star Cebu newspaper on March 21, 2014.

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