Why Gokongwei wants to work with MVP on more airport projects

by Cathy Rose A. Garcia, ABS-CBNnews.com

Posted at Feb 20 2013 08:16 PM | Updated as of Feb 21 2013 08:48 PM

MANILA, Philippines - The Gokongwei group is teaming up with Manuel V. Pangilinan's Metro Pacific Investments Corp. (MPIC) to bid for the P17.5 billion Mactan-Cebu International Airport project. And this might just be the start of more joint Gokongwei-Pangilinan bids for airport projects in the country.

JG Summit president Lance Gokongwei said he would like to work with Pangilinan on future bids for other airport projects.

"It will not be (a one-off thing)... With regards to airport bids, we would like to work most closely with Metro Pacific," he said on ANC's Inside Business with Coco Alcuaz on Wednesday evening.

The Gokongwei and Pangilinan groups were not always likely partners. In 2002, Pangilinan blocked the Gokongwei group's attempt to buy PLDT and Fort Bonifacio.

But in 2011, Pangilinan's PLDT and Gokongwei's telco Digital Telecommunications Philippines (Digitel) entered into a share-swap, creating the country's biggest telco.

Gokongwei said any decisions made in the past were purely business, nothing personal.

"In 2002, both parties bid as a matter of business interest and any decision made was not on a personal level, they were done on the business front. When we saw a reason to align together in 2011 with the merger of PLDT and Digitel, that was a reason to work together. The partnership has worked, Sun continues to prosper under PLDT," he said.

"We're very comfortable with the relationship and there's no reason why we shouldn't work together."

The Cebu-Mactan project would represent the Gokongwei-led conglomerate's entry into infrastructure. JG Summit currently has business interests in food manufacturing, property development, malls, hotels and airline (Cebu Pacific).

"Ever since the government announced the PPP projects, we have already mentioned publicly that the infrastructure projects we are most interested in are the airport projects. I guess it gathers all the strengths of our group, our familiarity with the airline business, property business, retail business and our ability to raise funds and handle large-scale projects," Gokongwei said.

But the Gokongweis' foray into airports nearly didn't take off the ground because of the government's move to prohibit airline owners and their affiliates to bid for the Mactan-Cebu project.

The Department of Transportation and Communications' bids and awards committee eventually relented, but allowed airline owners to participate on a limited basis.

Gokongwei said they felt the initial guidelines on the bidding were "prohibitive."

"There were precedents abroad that owners of airlines and airports are one. In Singapore, the government owns both Singapore Airlines and Changi. Same in Japan, Korea, Malaysia... Under the original rules, these world-class operators would not be allowed to bid. We felt the rules were rather restrictive. Fortunately the government had an open ear and came up with a compromise position that allows airline operators to bid but not be involved in management," he said.

Winning the contract to build a world-class airport in Cebu would be particularly meaningful for Lance's father and JG Summit founder John Gokongwei Jr., who hails from Cebu.

"My father was from Cebu and he would like to give back to Cebu and helping build a world-class Cebu airport is certainly one of his aspirations," Gokongwei said.