Archive for the ‘News’ Category

Megawide-GMR tandem deny violation of airport bidding rules

The Philippine Star, 24 February 2014

By Lawrence Agcaoili


MANILA, Philippines – The tandem of Filipino-owned Megawide Construction Corp. and Bangalore-based GMR Airports Ltd. yesterday reiterated that they did not violate the bidding rules for the P17.5 billion Mactan-Cebu International Airport capacity expansion program.

The Megawide-GMR joint venture has submitted detailed clarifications and documentations to the Department of Transportation and Communications (DOTC) on the conflict of interest violation with the Lopez-led First Philippine consortium together with Malaysia Airports as raised by the Filinvest Group of taipan Andrew Gotianun.

“We would like to state that the allegation made by Filinvest that there is a conflict of interest between GMR-Megawide Consortium and the First Philippine Consortium because there is a common director in the two companies is completely baseless and without any substance whatsoever,” the Megawide-GMR Group clarified.

The tandem argued that the Prequalification, Bids and Awards Committee (PBAC) of the DOTC issued Special Bid Bulletin 06-2013 stating that the mere presence of a director on the board of two or more prospective bidders does not constitute a conflict of interest and hence could not lead to automatic disqualification.

The company pointed out that PBAC had clearly highlighted that in any such event of interlocking directors, the assessment of conflict of interest should be based on specific facts of the case.

“In fact, if mere presence of a common director in two companies results in disqualification, it would be tantamount to most companies in the Philippines not being able to bid against each other for any project since a number of eminent business personalities hold directorship across major corporations,” the group said.

In answer to the allegations of the Filinvest Group, the group was able to prove that Malaysia Airports director Tan Sei Bashir is not a director in GMR Infrastructure.

“He was not involved in any capacity whatsoever at any stage of the bidding process for GMR-Megawide Consortium,” the group said.

The Megawide-GMR tandem pointed out that the objective of a conflict of interest clause in any bidding process is to ensure that there is no collusion between any two or more bidders.

“We have proven beyond any doubt that there was absolutely no collusion,” the group added.

The fact is that while GMR-Megawide Consortium offered the highest premium of P14.4 billion to the government, the First Philippine Consortium offered the lowest premium of only P4.7 billion.

“This clearly shows that there couldn’t have been any collusion between the two bidders. Hence, it is clear that no legal or logical reading of bidding rules can establish a conflict of interest in the present case.

“We reiterate that we have always acted in good faith and have always observed all rules and regulations in relation to the bidding,” it added.

Earlier, GMR Airports chief executive officer Puvan Sripathy told The STAR that the joint venture is ready to pay the government the P14.49 billion bid it submitted once the DOTC issues the Notice of Award to the company.

“Our downpayment is ready. According to the rules, when the Notice of Award is issued we have to pay them within 20 days. But we are ready with the money,” Sripathy stressed.

He pointed out that the GMR Group, which is into airports, energy, highways, and urban infrastructure has $1 billion cash on hand that is ready for investments around the world.


Airport delay slammed

Manila Standard Today, 24 February 2014

By Junex Doronio


CEBU CITY, Cebu—Tourism companies rapped the delay in the multi-billion peso expansion of the Cebu-Mactan International Airport caused by a congressional inquiry sought by Cebuano congressmen.

The Network of Independent Travel Agencies (NITA) said the highest bidder on the project should be allowed to start work and any undue delay for its completion should be avoided.

“Any delay on the implementation of the airport expandion will deprive Cebu from taking advantage of the opportunities in both invetment and tourism,” NITA President Bobby Lim-Joseph said.

The Department of Transportation and Communication has suspended awarding the project to the highest bidder, Megawide-GMR cosortium, after seven Cebu Congressmen sought an inquiry into the bidding. The second highest bidder, Filinvest-Changi, challenged the results of the bid based on conflict of interest charges.

But travel companies and other business groups have joined a public clamor against delay and various groups said they will send petitions to concerned government agencies to speed up implementation of the project.

Joseph said the Megawide-MGR Consortium won the bidding after a tedious process, and government should get the project underway.

Lito Maderazo, president of the Cebu Chamber of Commerce and Industry, said it was preparing a resolution to be submitted to various government agencies to demand immediate implementation of the project.

Other groups calling for immediate implementation include SKAL International, National Association of Independent Travel Agencies, Team Philippines, Cebu Tourism and Travel Association, Philippine Travel Agencies, and Philippine Tour Operators Association.


DOT backs Mactan-Cebu Airport rehabilitation

Manila Bulletin, 21 February 2014

By Malou M. Mozo


Cebu City, Cebu — The Department of Tourism (DOT) vowed to support the move to complete the multi-billion peso rehabilitation project of the Mactan-Cebu International Airport (MCIA) to further boost tourism activities for Cebu and the rest of southern Philippines.

“Cebu will get its new airport and we are one with the stakeholders in pushing for the completion of the project the soonest possible time,” said Tourism Secretary Ramon Jimenez Jr. at the sidelines of Thursday’s 5th World Ecotourism Conference at the Radisson Blu Hotel Cebu which gathered over 400 international and local delegates.

Jimenez acknowledged that while there has been a delay to its implementation following the move of seven of nine Cebuano members of the House of Representatives to seek a congressional inquiry on the alleged controversial bidding of the P17.5-billion MCIA Public Private Partnership project, he believes that the Department of Transportation and Communications (DOTC) is “determined to pursue the project.”

“Any delay is unfortunate as this will prolong the hassle for tourists but we are positive that once the project will push through, this will drive more tourism activities for the rest of Cebu and the Visayas,” Jimenez told reporters.

Following a qualifying technical review and transparent bidding, the Megawide-GMR Consortium emerged the winner, having bid P14.4 billion, P400 million more than the second highest bidder, the Filinvest-Changi Consortium.

The P14.4 billion represents the amount the Megawide-GMR Consortium is willing to pay government for the 25-year rights. It is investing another P17.5 billion to modernize the existing terminal and build a new one. Altogether, the total financial commitment is about P31.9 billion.


Aboitiz-Ayala group eyes ‘bundled’ airports project

Philippine Daily Inquirer, 24 February 2014


The Aboitiz Group is keen on bidding for other “bundled” regional airports the government may auction off under its public private partnership (PPP) program and it may keep its partnership with the Ayala group, a company official said.

Aboitiz Equity Ventures president and CEO Erramon Aboitiz said the airport business remained attractive if the government could structure deals that would provide the scale similar to the P17.5-billion Mactan-Cebu International Airport project.

Aboitiz and partner Ayala, as well as five other groups, were outbid during the opening of financial proposals last Dec. 12 for the Mactan-Cebu airport deal. The project, however, has yet to be awarded given a still-to-be-resolved row between the top two bidders.

Recently, the government has indicated that it was looking at bundling airport operations contracts for Iloilo, Bacolod, Davao, Puerto Princesa (Palawan), Bohol and Laguindingan (Misamis Oriental) under the PPP scheme. This means bidders keen on breaking into the business could pursue fresh opportunities. “We definitely had intentions of growing that business if we were successful in Mactan,” Aboitiz told reporters in a recent interview, adding that they would again participate “if there are interesting projects” and of a particular size.

He noted that there were no commitments to pursue future airport deals with Ayala but “it makes sense that we look at them together.”

Other conglomerates like JG Summit Holdings and Metro Pacific Investments as well as San Miguel Corp., which were also unsuccessful in the Mactan-Cebu bid, were keen on other deals that may be auctioned off, their respective officials said.

The PPP Center said it would hold a series of meetings with the private sector to help determine the optimal size of bundling. For example, airports in Davao, Bacolod and Iloilo handled about 5.5 million passengers in 2011, government statistics showed. Mactan Cebu International Airport, the Philippines’s second-busiest airport, handled about 6.7 million passengers last year.

Other bidders had noted that they would first need to see the issues surrounding Mactan-Cebu Airport resolved. The awarding of the project, originally scheduled on Jan. 6 this year, has been delayed as the Filinvest group, which placed the second-highest offer, raised various issues, including an alleged conflict of interest violation, against frontrunner Megawide-GMR.

Megawide-GMR offered a P14.4-billion premium bid against the roughly P14 billion offer of Filinvest-Changi. The main conflict-of-interest allegation, being contested by GMR-Megawide, involves a key official of Malaysia Airports Holdings Berhad, which is a partner of a rival consortium for the Cebu airport deal, but is also a director of two airports that GMR operates in India.

PPP Center executive director Cosette Canilao told reporters this week that the transportation department’s bids and awards committee would soon render a decision on the matter.

DOH: Poor patients to benefit from hospital modernization

Philippine Daily Inquirer, 24 February 2014

By Jocelyn R. Uy


MANILA, Philippines—The Department of Health (DOH) has assured charity patients that they would still be accommodated even if plans of the government to privatize the Philippine Orthopedic Center (POC) were to push through.

Health Secretary Enrique Ona said the hospital’s indigent patients would not be left out, stressing that 70 percent of its beds would be allotted for the sponsored programs of the state-owned Philippine Health Insurance Corp. (PhilHealth).

“This one is very clear-cut. Of the 700 beds, 70 percent or more than 400 shall be allocated for the [PhilHealth] sponsored programs,” Ona told reporters in a recent interview.

The health chief also clarified that under the PhilHealth program, patients would not be obliged to pay anything.

“Under the program, it is ‘no balance billing’ for all its members [so] that means everything will be taken care of by PhilHealth and patients will not be billed beyond what PhilHealth is required to pay by law,” Ona explained.

The P5.6-billion modernization program for the POC, the first government hospital to be privatized, is under the Aquino government’s public-private partnership scheme. The project was awarded to Megawide Construction Corp. and World Citi Consortium.

A multisectoral group earlier this month filed a petition in the Supreme Court, asking it to stop the government from pushing through with the project.

But Ona said the POC, which is the country’s only hospital specializing in orthopedic disorders, would not be privatized per se as the DOH would continue to oversee its management.


Public misconceptions on Orthopedic Center modernization

The Philippine Star, 22 February 2014

By Dr. Willie T. Ong


One of the controversial issues in health is the modernization of the Philippine Orthopedic Center (POC) under the Public Private Partnership (PPP) program of the government. Because of the complexity of the issue, the public has not been getting the correct information on the matter.

Facts concerning the new POC

POC will not be privatized. Some groups are claiming that POC will be privatized. This is simply not true. To explain briefly, privatization means that the government sells a property and lets the private group dictate the price and services rendered. For the new POC, government will retain ownership of the hospital, will continue to regulate services and will get majority of charity beds for the poor. Hence these three points make it very different from the old privatization scheme.

Government will retain ownership of hospital. This is the most important difference between privatization and PPP.

Government will regulate services given. The DOH will head a governing council that will oversee how the hospital is run. The government is not relinquishing control to the private sector.

Government is assured of 70% or 490 PhilHealth-Charity beds for the poor. This is written explicitly in the contract, which the private sector must follow. This is to correct false reports that only 10% will be devoted to charity.

How the private sector will benefit

Private sector has 30% or 210 private beds. The private sector can earn money from the private cases, without putting the poor at a disadvantage.

Private sector does not need to spend much for marketing. This is because it will get the Philippine Orthopedic Center branding already.

Orthopedic cases are on the rise because of the aging population. Hence, high technology surgeries, implants and treatments will now be offered to all Filipinos. Each of us can potentially benefit from having a modern orthopedic center.

Efficiency can give rise to profits. By performing operations quickly and safely, the new POC can serve an estimated four times more patients.

How the government and poor will benefit

New building and facilities built at no cost to the government and the people’s taxes.

New building and facilities built quickly in 2 years. Otherwise, Filipinos will have to wait 15-20 years if and when a modern POC would be built. With the present budget, there is no way P5.6 billion can be spent on one hospital alone.

Poor patients will get quality care and medical costs will be shouldered by PhilHealth.

Poor patients will now be operated on faster because of hospital efficiency. At present, patients at the old POC stay an average of 22 days in the hospital. In a world class and efficient facility, the average hospital turnover will be reduced to 4 to 5 days only. Thus, four times more poor patients can be served in the new hospital.

Why are some groups opposing?

The main reason for the opposition to the new POC is the fear of losing jobs. The DOH has repeatedly assured the thousands of POC employees that no one will lose their jobs.

However, DOH Secretary Enrique Ona explains that the employees will have three options. One, they can continue working as government employees in the new Philippine Rehabilitation Center (where the old POC is located). Two, for those of a certain age, they can opt for early retirement. Third, they can apply for a position in the new POC.

It is foremost in the DOH’s goal that poor patients will be guaranteed medical services and will not be turned away.

Secretary Ona says, “We have learned the lessons of PPP in other countries. We have studied this contract meticulously to ensure that the poor will not be disadvantaged. If we don’t go into this PPP project, I see no way for the POC to be modernized in the next 15 to 20 years. Are we willing to wait for that time and let our patients continue to suffer?”

In 25 years, the PPP contract will expire and the modernized POC will be returned to the government. By that time, in the year 2039, the government will have the option to continue the contract, or to manage it as a fully government-run facility.

“I believe that in 25 years, thousands of Filipinos would already have benefitted from the new POC. I will not be around to witness it anymore. But I want to assure everybody that I have tried my best, with the resources we have, to improve the delivery of health services for our people,” says the DOH Secretary.


Australia extends financial support to PPP

The Philippine Star, 22 February 2014

By Louella D. Desiderio


MANILA, Philippines – The Australian government is extending funding to the Philippines to support the Public Private Partnership (PPP) program, education as well as health in line with strengthening economic cooperation between two countries.

Speaking at the joint membership meeting of the Makati Business Club, Philippines Australia Business Council, Australia Philippines Business Council, and Australian – New Zealand Chamber of Commerce Philippines, Australian Minister for Foreign Affairs Julie Bishop said they are providing A$170 million to the country to fund programs on infrastructure and education.

She said the Australian government is providing a further $2.5 million to support the PPP program, which would bring Australia’s total contribution to the PPP fund to $30 million.

“Through leveraging public funds, we hope the Philippines will be able to build infrastructure for the future,” she said.

The PPP Center has a Project Development and Monitoring Facility, which funds the preparation of pre-feasibility and feasibility studies, project structuring, as well as preparation of bid documents and draft contracts for potential PPP projects.

Bishop noted that infrastructure would be necessary to support the country’s economic growth.

Aside from the PPP program, she said, Australia is also providing A$150 million to support the education sector.

In particular, the funding would be used to support teacher training for the K to 12 basic education program and to build 1,000 schools, with half to be put up in areas damaged by Super Typhoon Yolanda.

Bishop said Australia is also providing funds to support health programs.

In the same event, Australian Minister for Trade and Investment Andrew Robb said it is in the interest of Australia to increase trade and investment links with the Philippines.

He noted that a delegation composed of 22 individuals representing different companies in Australia are in the country to explore business opportunities.

“60 percent of them have involvement in the Philippines with some quite substantial. They’re back looking for some more opportunities,” he said.

Given the country’s economic gains and the efforts in improving the business climate, he said investing in the country has been seen to be attractive for firms.

Trade Secretary Gregory Domingo told reporters yesterday the business delegation from Australia is composed of firms engaged in the following sectors: information technology business process management, agriculture, shipbuilding, education, energy as well as mining.

Robb said Australia is also interested to provide assistance in the Philippines in taking advantage of the country’s rich mineral resources.

“Looking at your country, which is endowed with resources, it is not being exploited properly,” he said.

He said the Australian government could send a team of people here who could provide assistance in the development of a framework on responsible mining.

“In Australia, we a have a lot to offer in terms of how we can develop responsible mining,” he said.

“That could be another step of taking advantage of what I think is potentially the greatest strength the Philippines has got,” he added.


Australia chips in $2.5 million for PPP

The Manila Times, 23 February 2014

By Volt Palaña


The Australian government commited $2.5-million additional support to the public private partnership (PPP) program as its way of strengthening economic cooperation between the two countries.

A delegation of top Australian officials headed by Foreign Minister Julie Bishop and Trade and Investmnt Minister Andrew Robb visited during the 40th anniversary of the Asean-Australia Dialogue Relations.

“Australian support for the Philippine government’s ambitious public-private partnership reform agenda has helped the PPP Center deliver five projects worth in excess of $1 billion,” she added.

The most recent PPP contract signed by the Philippine government is the $360-million Ninoy Aquino International Airport Expressway, benefited from just over $1 million in Australian funding to facilitate the transaction.

Australian support is helping the Philippines to use PPPs in delivering better services to Filipinos and increase private sector participation and investment in major infrastructure projects.

With dozens of PPP projects in development, and the continued support of Australia, the Aquino administration is well placed to deliver on its commitment to sign 15 PPP contracts by 2016.

The success of the Philippines PPP Center is serving as a model for the Asia-Pacific Economic Cooperation pilot PPP Center in Jakarta. In October 2013, Prime Minister Tony Abbott announced a $3-million support for the pilot center.

Australia’s partnership with the Philippines is in line with the latter’s improved infrastructure development and sustainable economic growth.


PH, Australia expand trade, investments

Manila Bulletin, 21 February 2014

By Bernie Magkilat


The Philippines and Australia have agreed to double bilateral trade and investments in the next five to seven years as both parties enjoy very friendly relations with the Philippines benefitting from strong exports in aircraft parts, automotive, agricultural products and Australia’s huge contribution in the country’s IT-BPM sector.

Trade and Industry Secretary Gregory L. Domingo told reporters Thursday at the 40th Anniversary of ASEAN-Australia Dialogue Relations in Makati the agreement was forged with Australian Minister for Trade and Investment Andrew Robb, who is in the country for a visit together with Australian Foreign Minister Julie Bishop, for the Philippines-Australia Ministerial Meeting.

“In the spirit of stronger partnership and very friendly relations with Australia, we deserve to significantly increase our bilateral trade and investments,” Domingo said citing Australian outsourcing companies that are here in the country.

The visit of Australia’s top government leaders was also accompanied by a huge Australian business delegation comprising of CEOs from the top 20 Australian firms engaged in mining, IT BPO, food and engineering services.

Domingo noted that Australia, the world’s 12th largest economy despite a small population, has been a great contributor to the country’s IT-BPO sector and the Philippines enjoying a big boost in trade.

In a speech before the Makati Business Club on Friday, Minister Robb noted that TELSTRA, Australia’s leading provider of mobile phones, mobile devices, home homes and broadband internet, employs 7,000 Filipinos for its BPO operation here. There are also an estimated 45,000 Filipinos employed across Australian BPO firms in the country.

Official data showed that for the January-October period 2013, the Philippines exported $732 million worth of goods to Australia and imported $886 million worth of goods only, thus cutting trade deficit against the Philippines significantly to $154 million only from a high of $1 billion in 2012.

Philippine trade attache to Sydney Emmanuel Ang told reporters that the Philippines biggest exports to Australia are automotive parts like batteries, wiring harness and tires.

But the biggest transaction in 2013 was the Philippine exports of “aero planes” worth $240 million as reported by the National Statistics Office. Ang, however, said the aero plane exports need to be broken down specifically as this could be exports of aircraft parts and hydraulic components but are classified under the aero plane export category of the NSO export data.

Ang also noted of the strong opportunity for the automotive sector because the three biggest car companies GM, Toyota and Ford Motors have already announced plans to pull out their manufacturing operations in Australia.

Australia has already allowed the exports of fresh pineapple and mangoes but not yet on bananas. Australian exports to the Philippines include copper, oil, wheat, beef and dairy products.

In terms of investments, Ang said that Australian investments approved by the investment promotion agencies for the period January-September 2013 reached P2.4 billion or 200 percent increase over P667 million in the same period in 2012.

Aside from IT-BPMs, Australian firms in the country are engaged in mining, manufacturing, engineering and construction sectors.

While Robb cited the strong investment opportunities in the country, he also noted some challenges like the changes in mining tax rules which is affecting stability of investment rules in the country.

“It (change in rules) confused the market and then stability goes out of the window,” he said. Australia has 150 year history in mining, which has contributed $10 billion in revenues in the past 10 years.

He, however, said that these challenges are being addressed by the Philippine government and there are huge potentials to be realized.

Robb also admitted that Australia’s manufacturing sector is facing challenges but noted there are still good opportunities for niche goods.

In terms of aid, Australian granted AU$170 million in 2013-2014 for the recovery and reconstruction challenges following Typhoon Yolanda (Haiyan).

Australia also provided AU$150 million in Basic Education Sector Transformation program to support the introduction of the K to 12 Basic Education Program, transforming children’s lives and supporting efforts to harmonize education standards across ASEAN.

Australia also contributed an additional US$2.5 million from Australia to expand Public Private Partnership projects to deliver better services to Filipinos and increase private sector investment in key infrastructure projects. This will enhance the engines of economic growth by connecting people to markets through vital infrastructure.

He also reiterated Australia’s commitment to bilateral and regional free trade agreements with ASEAN.

Australia is also positioning itself in the region, which has a growing strong middle class in the next 20 to 30 years.

Based on the Joint Ministerial Statement from the conclusion of the Philippines-Australia Ministerial Meeting, both parties agreed to provide an enabling environment for trade and investment by streamlining business regulations, boosting productivity and competitiveness, promoting greater utilization of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), and ensuring frequent government dialogue to address trade and investment concerns.


Skyway project to accelerate travel

Manila Bulletin, 21 February 2014

By Genalyn Kabiling


Manila, Philippines — Motorists can enjoy faster road travel at reasonable toll fees once the construction of the Skyway 3 project is finished, Malacañang said Friday.

Presidential Communication Operations Office Secretary Herminio Coloma Jr., however, said they would not force the public to use the planned elevated skyway that would connect the North Luzon Expressway and South Luzon Expressway if they don’t want.

Coloma made the remarks after militant groups protested the inconvenience caused by the Skyway 3 construction that would span from Buendia, Makati City to Balintawak, Quezon City.

The groups claimed the road project would not only result to horrendous traffic jams but also lead to higher toll fees that ordinary Filipinos cannot afford.

“Malaki ang magiging pakinabang sa maraming mamamayan: ginhawa sa paglalakbay, maayos na daloy ng produkto at kalakal at dagdag na hanapbuhay at atraksyon sa mga mamumuhanan [The project would yield huge benefits for the people: convenience in travel, smooth flow of products and commerce; additional jobs and incentives to investors],” Coloma told in a Palace press briefing.