The private group that runs the Mactan Cebu International Airport (MCIA) submitted a massive unsolicited offer to build a second runway and a third passenger terminal in Cebu—a bet aimed at turning MCIA into a global hub.

Megawide Construction Corp. and India’s GMR Infrastructure said the P208-billion unsolicited offer, which would eventually require a competitive challenge, was submitted on June 7.

A key feature of the proposal would also allow GMR-Megawide to assume airside operations currently handled by the government, a first of this scale in the Philippines.

GMR-Megawide is already poised to open a new passenger terminal in June next year that will increase capacity at the MCIA to 12.5 million passengers annually (mppa) from the current 4.5 million.

The new offer takes a longer term view as GMR-Megawide wanted to grow capacity to 50 million passengers a year. It would likely need to reclaim land to build new facilities.

“Our studies show that passenger traffic in Cebu will reach about 28 mppa in 2039,” GMR Megawide director Louie Ferrer said. “This is traffic similar to major Asian airports such as Singapore, New Delhi and Kuala Lumpur.”

GMR-Megawide bagged the MCIA contract in 2014 under a 25-year concession deal that was hailed among the more successful public private partnerships (PPP) projects. GMR-Megawide’s new proposal is a 50-year plan and would thus extend that concession period.

Ferrer said investments needed to be made now to get ahead of congestion issues such as the ones being experienced by flyers using Manila’s Ninoy Aquino International Airport.

Since airside facilities will be turned over to the private sector, GMR-Megawide said it could move quickly to rehabilitate the existing runway and taxiways and build added infrastructure, including a second runway.

Assuming the offer is accepted by the government, the rehabilitation of existing facilities will be done from 2018 to 2021. The reclamation and construction of the second runway is targeted between 2022 and 2030. The final phase will be the construction of a third terminal slated for 2036 onward.

The Mactan Cebu International Airport Authority recently expressed its desire for a second runway in MCIA.
“Our proposal, therefore, dovetails perfectly with the directives of this administration,” Ferrer said.

GMR-Megawide’s proposal comes as the private sector seeks its place in President Duterte’s “build build build” infrastructure initiative. So far, the administration has stated a preference for the private sector to handle just the operations and maintenance aspects of big-ticket projects instead of an integrated build-then-operate approach.

12 June 2017
By Miguel R. Camus