MCIAA to ensure firms follow terms

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Monday, May 12, 2014

THE Mactan Cebu International Airport Authority (MCIAA) will ensure that GMR Megawide Cebu Airport Corp. will follow the terms and conditions in the terminal expansion project the government set.

MCIAA General Manager Nigel Paul Villarete said that even if GMR Megawide will take full control of the airport terminal and will build another terminal, the MCIAA will stay to regulate and monitor the projects.

He said the P14.4 billion paid by GMR Megawide last month is only for the concession contract and that the company is required to spend at least P17.5 billion for the next 20 years.



Of the P17.5 billion, P8.8 billion is for Phase 1, estimated to cover up to year 10, considering a seven-percent growth rate. The other P8.7 billion is for Phase 2, which is estimated to cover up to year 20, considering a seven-percent growth rate.

“The concessionaire will be spending more than this, considering that the term has been extended to 25 years,” read Villarete’s statement sent to Sun.Star Cebu.

He said the P17.5 billion is a conservative estimate, and was only used as a guide for bidding preparation.

“This only covers the minimum requirement of space and facilities and does not include other concession commercial assets that they build as part of their business model.

All in all, the actual undertaking of the concessionaire is much more than than,” Villarete said.


Among the features are the renovation of existing Terminal 1, construction of Terminal 2, complete reconstruction of Terminal 2 apron, and development of adequate vehicle parking lots to cater to public vehicular traffic.

He said the P14.4 billion is a premium payment in accordance to the bid parameter stipulated in the bid documents. It will not be used by the concessionaire as part of its undertaking.

He said it is given to the account of the National Government pursuant to the requirements of the Build-Operate-Transfer (BOT) Law, and shall be used by the government to cover its obligations under the PPP (Public-Private Partnership) Agreement as Grantor’s Responsibilities, as may be necessary, for the next 25 years.

“We are preparing the program for its expenditure in the next 25 years, which will include, but not limited to, construction of a new runway and end safety area (Resa), and other airfield facilities, including navigational aids, among others, as well as payment of grantor’s responsibilities under the concession agreement,” Villarete said.

“It is not something which we can spend today and we are even prohibited to utilize it for a certain period of time,” Villarete said.

Published in the Sun.Star Cebu newspaper on May 13, 2014.

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