Megawide-GMR deny violation of airport bidding rules

By Lawrence Agcaoili, The Philippine Star

Posted at Feb 24 2014 12:14 PM | Updated as of Feb 24 2014 08:14 PM

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.