DOTC defers awarding of PPP contract for MCIA

By Lenie Lectura, BusinessMirror

Posted at Jan 06 2014 07:28 AM | Updated as of Jan 06 2014 05:37 PM

MANILA - The Bids and Awards Committee (BAC) of the Department of Transportation and Communications (DOTC) has moved to a still-undetermined date the issuance of a notice to award the contract to operate, construct and manage a new passenger terminal facility in the Mactan-Cebu International Airport (MCIA).

The committee earlier scheduled on January 6 the issuance of the notice to Filipino-owned Megawide Construction Corp. and Bangalore-based GMR Infrastructure Ltd., which submitted last month the best bid offer.

However, its bid proposal was questioned by Filinvest-CAI Airport Consortium, which includes Singapore’s Changi airport.

Transportation Secretary Joseph Emilio Abaya said Filinvest, which submitted the second-best financial offer at P13.99 billion compared to Megawide’s P14.4 billion, raised issues related to “conflict of interest” and “questionable financial capabilities” in a letter submitted to the committee.

Abaya said Filinvest’s concerns must be resolved first before the committee can proceed to the awarding of the contract for the first public-private-partnership (PPP) airport project of the administration.

“We are not awarding the project yet because Filinvest wrote the BAC. So that should be resolved first,” he said in a text message.

In a separate text message, Transportation Undersecretary Jose Perpetuo Lotilla, who sits as the chairman of the committee, also confirmed that the issuance of the notice to award the project will not push through, “because the financial evaluation is still ongoing and will not be completed by January 6.”

The signing of the contract with Megawide, in case it hurdles the evaluation, is scheduled on February 6.

Megawide’s offer bested the bid proposals of six others.

The third-best offer came from Premier Airport Group led by SM Investments Corp. at P12.5 billion.

It was followed by the Metro Pacific-JG Summit consortium, which submitted a bid offer of P11.23 billion; AAA Airport Partners led by the Ayala and Aboitiz groups, P11.08 billion; San Miguel Corp.-Incheon Airport Consortium, P9 billion; and First Philippine Airports led by First Philippine Holdings and Malaysia Airport Holdings, P4.7 billion.

The MCIA project will modernize the country’s second-largest aviation hub with the construction of a new world-class international passenger terminal building (PTB) with an 8-million annual passenger design capacity. It will also renovate the existing PTB, which has been operating at over-capacity with 6.7 million passengers going through the structure in 2012.

The auction was originally scheduled to take place on August 28 but was then moved to October after the bidders raised concerns over the contract terms. The BAC then proposed some changes, which were recently approved by the National Economic and Development Authority Board.

The following are the approved changes:

lengthening of the concession period to 25 years from 20 years;

transfer of the operation and maintenance of the airport apron to the concessionaire, including the right to derive revenue from;

allowing flexibility on the implementation of capacity augmentation provisions; sharing of the real property tax liability; and increasing the duration of period for prohibiting competing airports from 10 years or when the passenger traffic at MCIA reaches 15 million passengers per year, whichever is later, to 25 years.