Archive for the ‘News’ Category

Gov’t plans 15 PPP projects worth over $14 B

The Philippine Star, 08 April 2014

By Louella Desiderio

 

MANILA, Philippines – The government plans to rollout 15 projects under the Public Private Partnership (PPP) program with a total cost of  over $14 billion, from now until the first quarter of next year.

“The 15 projects are what we think we can rollout in the next 12 months,” PPP Center executive director Cosette Canilao told reporters on the sidelines of the Philippines-France Conference held yesterday.

She revealed that the government intends to issue the request for qualifications or the start of bidding process  for the Bulacan Bulk Water Supply Project ($542.22 million) and the Integrated Transport System Southwest Terminal ($115.56 million) by May.

The government likewise wants to start the bidding for six airport projects by June. These are the Laguindingan Airport operation and maintenance (O&M) ($354 million), New Bohol (Panglao) Airport O&M ($52 million), Puerto Princesa Airport O&M ($71.13 million),Davao Airport O&M ($476.39 million), Bacolod Airport O&M ($208.98 million), and Iloilo Airport O&M ($322.34 million).

The issuance of request for qualification for the Laguna Lakeshore Expressway Dike project, with a cost of $1.44 billion, is slated for either June or July.

The Motor Vehicle Inspection project ($313.16 million) would be rolled out by the third quarter, while the bidding for the Mass Transit System Loop ($3 billion) would begin in the fourth quarter.

For the North South Commuter Rail, which would start from Malolos in Bulacan to Calamba in Laguna ($6.03 billion), the government hopes to hold the bidding process by the first quarter next year.

Canilao said the government may even advance the start of the bidding by the fourth quarter of this year.

Other projects to be rolled out over the next 12 months are: the O&M and extension of the Light Rail Transit Line 2 which runs from Recto station in Manila to Santolan station inMarikina, the New Centennial Water Supply Source Project ($417.33 million), and the New Prison Facility ($895 million).

“In the next 12 months, we are really working hard, barring causes of delay in seeking approvals, then we’re hoping that we could rollout all those projects in the next 12 months,” Canilao said.

“The reason why we are putting word in the market that we will rollout these projects is so that investors can already founnd consortium and prepare for it,” she added.

The government has so far awarded seven PPP projects which are the Daang Hari – South Luzon Expressway Link Road; the PPP for School Infrastructure Project (Phase I), NAIA (Ninoy Aquino International Airport) Expressway Project, PPP for School Infrastructure Project (Phase II); Modernization of the Philippine Orthopedic Center, Automatic Fare Collection System, and the Mactan-Cebu International Airport Passenger Terminal Building.

 

15 PPP projects in Philippines to be rolled out in next 12 months

Asia News Network, 08 April 2014

By Amy R. Remo

 

Manila (Philippine Daily Inquirer/ANN) -  The Philippine government plans to roll out 15 projects worth a total of $14 billion under the Public Private Partnership (PPP) program over the next 12 months, PPP Center executive director Cosette Canilao said Monday.

“We are really working hard—barring any event that will can cause delaying seeking approvals—to roll out these projects in the next 12 months, which means we will publish the invitation for qualification requests,” Canilao said on the sidelines of the Philippines-France conference held Monday.

“We are putting putting word out on the market that we’re rolling out these projects in the next 12 months so that investors could already group or find consortium members, and by showing them the estimated project costs, they know they will have to make [a reasonable] offer,” she explained.

Canilao made a presentation of the PPP projects before local businessmen and a French investment delegation led by Medef International. The bidding process for the projects, which are in varying stages, might start as early as next month up to the first quarter of 2015, she added.

Canilao identified the 15 projects as the $542.22-million Bulacan bulk water supply project; the $417.33 million New Centennial Water Supply source project; the operation and maintenance of the LRT Line 2; the $6.03-billion Integrated Luzon Railway Project Phase 1; the $3-billion Mass Transit System Loop; the $353.78-million operation and maintenance contract for the Laguindingan Airport, and a $52-million operation and maintenance contract for the New Bohol (Panglao) airport.

Also included in the list were the $71.13-million operation and maintenance contract for the Puerto Princesa airport; the $476.39 million operation and maintenance contract for the Davao airport; the $208.98-million operation and maintenance contract for the Bacolod airport; the $322.34-million operation and maintenance contract for the Iloilo airport; the $895.33 million regional prison facilities in Fort Magsaysay in Nueva Ecija; the $115.56-million Integrated Transport System Project Southwest Terminal; the $313.16-million Motor Vehicle Inspection System, and the $1.44-billion Laguna Lakeshore Expressway Dike project.

The Bulacan Bulk Water Supply project, which will be implemented in three phases, will supply treated water to 24 municipalities of Bulacan, while the New Centennial Water Supply Source Project aims to increase Metro Manila’s raw water supply with the construction of the Kaliwa Dam and the Water Conveyance Tunnel.
The integrated Luzon railway project aims to revitalize the entire length of the state-run Philippine National Railway (PNR), while the Mass Transit Loop will connect the fast-developing Bonifacio Global City, Makati Central Business District and the Mall of Asia area in Pasay City.

Contracts for the airports (Laguindingan, Bohol, Puerto Princesa, Davao, Bacolod and Iloilo) will give to the private sector the operation, maintenance and commercial management of the facilities, including future investments for capacity expansion.

The regional prison facilities project will entail the construction and maintenance of a state-of-the-art prison facility in Fort Magsaysay, Nueva Ecija; while the Integrated Transport System Project Southwest Terminal aims to provide a central transport terminal where all modes of transport will be available in one location.

The Motor Vehicle Inspection System is intended to be the national network of Motor Vehicle Inspection Centers (MVICs) using automated inspection methods that will be linked to the information system of the Land Transportation Office, while the Laguna Lakeshore Expressway Dike will provide a high standard highway-cum-dike with a proposed alignment that runs 500 meters away but following the shoreline of the Laguna Lake.

 

French firms express interest in Phl

The Philippine Star, 08 April 2014

By Louella Desiderio

 

MANILA, Philippines – French companies are interested in business opportunities in the country.

Trade undersecretary Ponciano Manalo, Jr. told reporters on the sidelines of the Philippines-France Conference yesterday the French business delegation, composed of more than 20 companies from France’s biggest business organization MEDEF International, is looking at available opportunities here.

“They’re interested in PPP (Public Private Partnership) projects, aerospace, energy…and in opportunities in Mindanao,” he said.

“We’re very happy the French delegation is here and they can have a view on the Philippines,” he said further.

MEDEF’s business delegation is a return visit to the country following the trade and investment mission conducted by the Department of Trade and Industry in France in September last year.

Manalo said the DTI is planning to visit France again sometime this year in line with its aim of increasing trade and investment ties with European countries.

MEDEF International Business Delegation president Philippe Matiere told reporters there has always been strong interest from French companies to do business in the Philippines.

“This is because of the continuous growth of the economy and success of French companies in the Philippines,” he said.

He added that the Philippine government has facilitated an environment more conducive for business.

French economic counsellor Gilles Vernet said it is in the interest of France to strengthen its economic relations with the Philippines.

“We support the EU GSP+ (European Union Generalized Scheme of Preferences Plus) status leading to a free trade agreement with the EU,” he said, noting that being a beneficiary of the trade scheme would allow the Philippines to increase trade with France.

The EU GSP+ covers 6,274 products that could enter the EU at zero duty.

Currently, the Philippines is a beneficiary of the regular GSP which covers 6,209 products, with 2,442 products subject to zero duty and the rest slapped with lower tariffs.

Two-way trade between France and the Philippines is valued at two billion euros.

For his part, French Ambassador Gilles Garachon said he would encourage more French tourists to visit the country.

 

French firms eyeing PPP projects, favor lifting of ban vs. CEB

Manila Standard Today, 08 April 2014

By Othel V. Campos

 

Stronger bilateral ties and the prospect of increased investments between the European Union and the Philippines may lead to the lifting of the flight ban on Cebu Pacific Air soon.

A French business delegation led by members of the Mouvement des enterprises de France said France was one of the countries that favored the lifting of the ban soon.

“We’re just one of the countries of the EU. The decision still has to be taken officially as a regional bloc. It hasn’t been decided yet and hopefully it will go in the right direction,” head of delegation and Matiere SAS chief executive Philippe Matiere told reporters Monday during the Philippines-France Conference at the Hotel Intercontinental Manila in Makati City.

Trade Undersecretary Ponciano Manalo, meanwhile, said the French trade mission was interested in forging joint ventures with local companies to bid for private public partnership projects.

“The interest is very high especially on transport and aeropace. There are also interests in energy, oil and gas exploration and investments in Mindanao,” he said.

The 23-company delegation includes ADP Ingenierie, Airbus Group International, Alstom, Bureau Veritas, Citelum, Cofely Group, Collecte Localisation Satellites, Credit Agricole Corporate and Investment Bank, Egis S.A. and Freyssinet International Manila Inc.

Matiere said the lifting of the ban on Cebu Pacific would benefit French tourists who were having difficulty booking flights to the Philippines.

The Medef is the biggest union of employers in France, with over 750,000 member companies. It serves as a lobby group at the local, regional, national and EU-wide levels.

About 40,000 French tourists visit the Philippines yearly. Matiere said a liberal flights arrangement was a promising prospect and that infrastructure was key to tourism development.

French Ambassador to the Philippines Gilles Garachon said he was looking forward to the lifting of the ban on Cebu Pacific.

 

French business group visits

Business World, 08 April 2014

By Daryll Edisonn D. Saclag

 

A DELEGATION of French businessmen arrived in Manila yesterday, indicating willingness to invest in the Philippines amid its strong economic growth.

“They are very much interested to invest in the Philippines. Some of them are already here. Some are in the process of opening while some are planning to do so. They are convinced that they must have presence in the Philippines,” French Ambassador Gilles Garachon told reporters yesterday, at a business forum jointly organized by the Philippines-France Business Council, MEDEF International, the National Committee of Foreign Trade Advisors of France, and the French Embassy in Manila.

Twenty-four French companies — which are into energy, transportation, banking, aerospace development, shipbuilding, and infrastructure — were in town yesterday for networking and business matching activities.

The visiting firms are members of the Mouvement des entreprises de France (MEDEF), or the Movement of the Enterprises of France.

MEDEF, according to its Web site, was established in 1946 and started out as the Conseil national du patronat Français. It changed to its current name in 1989 and now represents more than 700,000 businesses in France.

Philippe Matière, head of the business delegation and chief executive officer of construction firm Matière SAS, said: “Several things happened that make it [the Philippines] even more interesting for French companies. First is the continuous growth and stability of the country, and second was the success met by a lot of French companies here last year.”

The French Embassy’s Mr. Garachon said many French companies joined the delegation to find out which sectors they can invest in and how to do business in the Philippines.

He said tourism has the highest potential for growth between the two countries as travel to the Philippines from France and vice versa has been limited due to a ban on local carriers by the European Union (EU).

“There are not enough French tourists visiting the Philippines [due to] an air ban by the European Union. The air safety committee has lifted the ban for PAL (Philippine Airlines), and it is now in the process of lifting the one for Cebu Pacific. It has not been decided yet, but the prospect is good. We hope it will be lifted this year,” said Mr. Garachon.

In 2010, the EU blacklisted local carriers after the International Civil Aviation Organization (ICAO) in 2009 tagged the Philippines as a “significant safety concern.”

But, reforms implemented since then led the ICAO to remove the Philippines from the list of countries with safety concerns in March last year.

Last July, the EU had lifted the ban imposed on PAL, allowing the flag carrier to mount flights to the 28-member bloc.

Should Cebu Pacific hurdle EU scrutiny, the budget carrier is expected to compete with PAL, which resumed operations to Europe last November, launching flights five times a week to London.

Gilles Vernet, economic counselor at the French Embassy, said he expects Philippine exports of agricultural products and electronics to France to increase upon the approval of Manila’s application for Generalized Scheme of Preference Plus (GSP+).

The GSP is a trade arrangement where the EU grants lower tariffs and zero duties to developing countries to boost their export capabilities. Under the arrangement, the Philippines enjoys tariff reductions on 3,767 products and zero duty on 2,442.

The GSP+, on the other hand, would grant zero duty to all products exported to the EU.

The Philippines submitted its application last December and expects to enjoy GSP+ benefits by the middle of this year.

Trade Undersecretary Ponciano C. Manalo, Jr., meanwhile, said that during his discussions with several French companies, “many were interested in participating in PPP (public-private partnership) projects, aerospace development, energy, and oil and gas.”

He added that he has received inquiries on how to invest in Mindanao, especially now that the government and the Moro Islamic Liberation Front have signed the Comprehensive Agreement on the Bangsamoro.

PPP Center Executive Director Cosette V. Canilao, for her part, identified 15 projects the agency expects to roll out within the next 12 months, which French companies may take part in:

• the $542.22-million Bulacan Bulk Water Supply Project;

• the $417.33-million New Centennial Water Supply Project;

• the operation and maintenance (O&M) of the existing 13.8-kilometer Light Rail Transit Line 2;

• the $6.03-billion Integrated Luzon Railway-Phase 1 Project;

• the $3-billion Mass Transit System Loop project connecting Bonifacio Global City, Makati Central Business District, and the SM Mall of Asia in Pasay City;

• the $353.78-million O&M project for the Laguindingan Airport;

• the $52-million O&M project for the New Bohol (Panglao) Airport;

• the $71.13-million O&M project for the Puerto Princesa Airport;

• the $476.39-million O&M project for the Davao Airport;

• the $208.98-million O&M project for the Bacolod Airport;

• the $422.34-million O&M project for the Iloilo Airport;

• the $895.33-million prison facility in Nueva Ecija;

• the $115.56-million Integrated Transport System Project — South Terminal;

• the $313.16-million Motor Vehicle Inspection System; and

• the $1.44-billion Laguna Lakeshore Expressway Dike Project.

Mr. Garachon said a Philippine business delegation, including President Benigno S.C. Aquino III, is expected to visit France in September.

“It will be a landmark visit and will be a perfect time to reinforce this positive momentum,” said Mr. Garachon.

Some of the French companies and brands that are already in the Philippines include gasoline station Total, construction materials provider Lafarge, cosmetic brands L’Oreal and Maybelline, apparel brand Lacoste, and business process management firm Teleperformance.

Total trade between France and the Philippines last year reached $1.935 billion, with imports from France amounting to $1.622 billion while Philippine exports were only $312 million.

 

French business group eyes PPP, energy deals in PHL

Business Mirror, 07 April 2014

By Catherine N. Pillas

 

A visiting 24-member French business delegation has expressed growing interest in investing in the Philippines, specifically in aerospace, energy and public-private partnership (PPP) projects, according to Undersecretary for Trade and Investment Promotions Ponciano Manalo Jr.

On the part of the French delegation, they are looking at the Philippines with a fresh set of eyes due to the Philippines’s general upward growth and ease of government dealings on projects, among other factors, he said.

“We are making a big pitch to the French business community and they really want to learn about us. We have a lot of leads especially in aerospace, energy, specifically in oil and gas,” Manalo said in an interview with reporters on Monday.

The MEDEF International delegation, which was received by major proponents of the government, represents the French Business Confederation and its 800,000 companies, worldwide.

Major government agencies, including the Philippine Economic Zone Authority, departments of Tourism, of Transportation and Communications, and Trade and Industry, PPP Center, Department of Finance, as well as private-sector business groups welcomed the European business delegation and presented the country’s strengths during the Philippines-France Conference on Monday.

Gilles Vernet, French Embassy economic counselor, confirmed prospects in industry, primarily in infrastructure, aviation, energy, manufacturing and transportation from the business delegation “This high-level French business delegation already has contracts here in the Philippines or is in the process of setting up offices,” added French Ambassador to the Philippines Gilles Garachon in an interview with reporters.

“There has always been interest from French companies, but several things make the Philippines more attractive: the continuous economic growth and stability of the government now, the successes of existing French companies in the Philippines and now it’s easier to  deal with the government,” MEDEF International Head Philippe Matiere said in the same interview with reporters.

Vernet confirmed that existing substantial French investments today come from La Farge, a global giant in cement manufacturing, L’Oreal, AXA Life Insurance and Total Gas.

“We hope to see a doubling up of French presence and investments in the coming years,” Vernet added.

Bilateral trade between the Philippines and France, which stands at €2 billion, is currently in the favor of the European country, said Vernet, due to the contracts with Airbus for the purchase of planes but will soon level out after the refleeting.

France’s exports to the Philippines are at €1.5 billion, mostly in aviation,  and imports are at €0.5 billion, but could have a rebalancing of trade if the Philippines ramps up its exports, especially in agriculture and the furniture industry.

(With Bloomberg News)

 

Philippines airport PPP finally awarded amid controversy

Global Construction Review, 07 April 2014

 

After months of wrangling, the Philippines’s Department of Transport and Communications (DOTC) has finally awarded the concession to renovate, expand and then to operate the Mactan-Cebu International Airport to a consortium comprising an Indian firm and a Philippine firm.

It emerged in January that India’s GMR Infrastructure and the Philippines’ Megawide Construction had offered the highest premium, approximately $320m, for the project, which entails renovating the existing passenger terminal building, building a new one for international flights, and operating the airport for 25 years.

The award process for this public-private partnership (PPP) has been controversial.

The second highest bidder, a consortium of the Phillipines’ Filinvest Development Corporation and Singapore’s Changi Airport Group, sought the disqualification of GMR-Megawide on grounds of conflict of interest and insufficient capacity to handle the project.

Then, just a day before the contract award, a senior politician, Senator Sergio Osmeña III, asked the Philippines’ Supreme Court to stop it. He, too, alleged conflict of interest on GMR’s part.

But the DOTC remained committed to the GMR-Megawide bid.

“Amidst all the noise drummed up in different forums the past few months, the DOTC has allowed nothing but the law and the country’s interests to matter in awarding the project,” said DOTC spokesperson Michael Arthur Sagcal in a statement.

“This project should have been done at least a decade ago, so there is no more time to waste,” he added. “We have resolved all issues, we are ready to defend our decision, and it is now time to push forward onDaang Matuwid by delivering our services to the people.”

(Daang Matuwid, meaning ‘straight path’, is the name given to the anti-corruption initiative launched by Philippines’ president Benigno Aquino.)

GMR-Megawide now have 20 days to complete the post-award requirements, such as submitting a $4m line of credit up front, and the payment of the $320m premium to the Philippines government.

The DOTC said the construction work is expected to take three to four years. The total cost of the renovation and expansion has been estimated in the Philippines’ media to be 17.5bn pesos, or roughly $390m.

 

All systems go for the MCIA project

Business Mirror, 07 April 2014

By Butch del Castillo

 

FOR finally awarding the multibillion-peso Mactan-Cebu International Airport (MCIA) contract to the consortium of Megawide Construction Corp. and India’s GMR Infrastructure Ltd., Transportation Secretary Joseph Emilio Abaya shouldn’t sound so defensive in his public statements.

He should, in fact, be proud that he has finally shaken off the political influences that have been preventing him from making a timely, fair and just decision on who actually won the bidding. As it is, he has arrived at a fair and just decision, one that is still three months overdue.

In any case, however, all’s well that ends well.

Of course, the Filinvest Development Corp.-Changi Airports International (CAI) consortium has expressed its disappointment over the Department of Transportation and Communications’s (DOTC) final decision.

Joseph Yap, the authorized representative of the group, said: “We believe that the conflict-of-interest issue and other matters we raised are all valid and relevant and substantive to the bidding process and rules.”

The DOTC earlier asked the Bangalore-based firm to answer the questions raised by Filinvest-CAI against Megawide-GMR. By giving due course to these issues, the awarding of the project, which was originally scheduled for January 6, suffered a three-month delay.

Abaya told a Manila Standard Today reporter the other day that the DOTC had to grapple with, and refused to be influenced by, certain “external factors” before arriving at its final decision to stick to the bidding rules.

He said: “We are showing the world that the country now has an excellent investment climate…. Gone are the days when big-ticket contracts would be awarded, despite being tainted with irregularities…”

The awarding of the project to Megawide-GMR has been described as “three months overdue,” because of the formal protest filed by Filinvest-CAI, the second-highest bidder.

Filinvest had claimed that Megawide-GMR should be disqualified because the latter allegedly lacked the necessary financial muscle to undertake the project.

This claim was consequently proven to be groundless. GMR enjoys a Triple A investment-grade credit rating from international credit-rating agencies. This means that reputable international banks wouldn‘t hesitate to provide the funding for the MCIA project.

Also, GMR has developed an excellent reputation as the operator of the prestigious Delhi and Hyderabad airports.

The financial credentials of Megawide, meanwhile, nicely complements GMR’s excellent international credit standing. Megawide has a net worth equivalent to four times the stipulated requirement for the MCIA bid.

As I’ve mentioned in a previous column, when GMR took over the Delhi airport in 2006, the latter was ranked 101st in the world. Last year it rose to become the world’s fourth-best airport, putting it in the same league as Singapore’s Changi airport and South Korea’s Incheon International Airport.

These three airports have been consistently among the Top 5 airports in the world since 2010.

And now it is time for Megawide-GMR to waste no more time in mobilizing the required financial and human resources to make the MCIA an international gateway the country can be proud of.

Modernizing this gateway to southern Philippines is expected to greatly boost tourism arrivals and serve as a magnet for investments in that part of the country.

Incidentally, with the awarding of this contract, the government expects to receive the stipulated upfront payment of P14.4 billion.

Mea culpa

THE lawyers of Filinvest Land Inc. (FLI) wrote to correct a factual error in my previous column (“Politics mars MCIA project,” April 1 issue, BusinessMirror), that FLI paid only P206 million to the Cebu city government pertaining to its joint property deal a few years ago. The Flores Salcedo Marasigan & Partners law firm said:

“First, in a joint declaration on December 20, 2013, published in the major Cebu dailies, the City of Cebu acknowledged and confirmed that FLI was not remiss in its financial obligations to the city. For the period January 1, 2010 to December 31, 2013, FLI had already remitted…P1.735 billion, which includes the P309.71 million representing the city’s revenue share in the joint venture agreement and P1.42 billion for the purchase of certain properties.  It is not in arrears on anything.

“In fact, SGV & Co. [Ernst & Young], which has been engaged by FLI as an independent auditor…has stated in its latest audit report that FLI has exceeded what it was supposed to have remitted to the city government.”

I stand corrected, of course, and own up to the mistake, which was committed with no malice aforethought.

 

Mactan airport project to take off soon

Business Mirror, 07 April 2014

By Ernesto Hilario

 

AS a follower of the saga of the bidding for the Mactan-Cebu International Airport (MCIA) project, I am glad that the long wait is over.

With the move of the Department of Transportation and Communications (DOTC) late last week to finally award the contract for the modernization of the MCIA to the consortium of Megawide Construction Corp. and its Indian partner, GMR Infrastructure Ltd., asking everyone to move forward is the prudent thing to do.

Seven groups submitted bids for the project. Megawide-GMR submitted the highest bid of P14.4 billion, while the consortium of Filinvest Development Corp. and Singapore’s Changi Airports International (CAI) submitted the second-highest bid of P13.99 billion. While the other bidders were gracious in defeat, Filinvest-CAI was combative, saying Megawide-GMR should be disqualified. Why? Because it said the Philippine-Indian consortium did not have enough financial capability, had a poor track record and faced a conflict-of-interest situation.

Megawide-GMR, however, managed to debunk all these allegations.

I Googled GMR and learned that it possesses significant financial clout. The company enjoys a Triple A investment-grade credit rating from international credit-rating agencies. Several international banks have expressed interest in lending to GMR so it can add more funds for the airport project.

The Bangalore-based company continues to make a profit from its operations. It has also been meeting all its financial obligations. Its audited financial statements show that they have actually earned operational profits in each of the last six years.

In other words, Megawide stands on terra firma. Its net worth alone is four times the stipulated requirement for the Mactan airport bid.

As to the track record of GMR, it built and now manages both the Delhi and Hyderabad airports in India.

When GMR took over the Delhi airport in 2006, it was ranked 101st in the world. Last year, however, the airport was already ranked fourth, sharing the spot with Changi airport and South Korea’s Incheon International Airport. Delhi has consistently been ranked among the world’s Top 5 airports since it opened a new terminal in 2010.

With regard to the Hyderabad airport, it is ranked second among the world’s best small airports, based on the 2012 Airport Service Quality ratings of the Airports Council International, an association of airport operators.

In fact, GMR has emerged as one of the world’s leading airport companies. It is the third-largest company in the world based on the passenger volume handled in airports.

The losing bidder also said Megawide-GMR should be kicked out of the bidding because of conflict of interest, claiming that one of GMR’s directors also sat on the board of directors of Malaysian Airports Holdings Berhad, the foreign partner of First Philippine Airports. GMR managed to convince the DOTC that this particular individual, Tan Sri Bashir, was not a member of its board.

The 25-year concession agreement involves an upfront payment of P14.4 billion to the Philippine government. Apart from this, Megawide-GMR will shoulder the construction cost to expand the capacity of the airport to 16 million passengers from the current 5 million over a four-year period.

Work on the project will start late this year, that is, if politics and vested interests will not unduly delay it further.

The losing bidders and their political backers ought to support the project, as this will benefit the entire nation, not just Cebu province.

The MCIA will be the gateway of the world to southern Philippines. Once refurbished to meet world-class standards, it will, no doubt, bring more tourists and encourage more investments in the country.

Critics claim that the government has been slow in implementing public-private partnership projects. But when a project starts moving, it seems that some people cannot think of anything but their own selfish interests and want to derail its implementation. This crab mentality should not be allowed to continue. This project must get going as soon as possible, so that the economy can move forward in the coming years.

 

Philippines awards US$390m Cebu airport deal to GMR-Megawide group

The Business Times, 05 April 2014

 

[MANILA] The Philippines said on Saturday it had awarded the US$390-million deal to renovate, expand and operate the Mactan-Cebu international airport to India’s GMR Infrastructure Ltd and local partner Megawide Construction Corp.

GMR and Megawide submitted the best bid for the biggest infrastructure deal offered to investors so far under the government’s Public-Private Partnership (PPP) programme, the Department of Transportation and Communications (DOTC) said.

It took the DOTC more than three months to award the project after one of the six other bidders, Philippine conglomerate Filinvest Development Corp, raised a conflict-of-interest issue against the GMR-Megawide group. The group offered a premium of 14.4 billion pesos (US$320 million) at a tender in December to win the 25-year concession, which entails renovating the passenger terminal building, building a new one to service international flights and operating the airport, the nation’s second-biggest gateway.

GMR operates and maintains three airports in New Delhi and Hyderabad in India, and in Istanbul. Megawide is a Philippine construction firm that has won three out of five PPP contracts – valued at around 26 billion pesos – tendered by the government in the last three years. “Amidst all the noise drummed up in different forums the past few months, the DOTC has allowed nothing but the law and the country’s interests to matter in awarding the project,” DOTC spokesman Michael Arthur Sagcal said. “This project should have been done at least a decade ago, so there is no more time to waste. We have resolved all issues, we are ready to defend our decision.” The DOTC has given the GMR-Megawide group 20 days to complete the post-award requirements, such as the submission of an irrevocable letter of credit in the amount of 180 million pesos, and the payment of the premium amount to government.