MANILA, Philippines - Ayala Corp. is forging an exclusive alliance with Aboitiz Equity Ventures Inc. (AEV) for the auction of the Mactan-Cebu International Airport Passenger Terminal project, a statement over the weekend showed.
This is the second time Ayala is taking on an exclusive alliance as it seeks to bolster its chances of bagging large-scale infrastructure projects under the government’s massive Public-Private Partnership (PPP) Program. In April it announced a similar tie-up with Metro Pacific Investments Corp. for railways.
Such agreements among major corporations are advantageous as these help dampen the competition while improving their own chances of winning contracts by combining resources and expertise.
Based on the statement, Ayala and AEV signed a memorandum of agreement to form a 50-50 joint-venture company that will serve as their vehicle to bid for and develop the Mactan-Cebu International Airport, the country’s second-largest international gateway. The project is estimated to cost P10 billion.
“Both groups strongly believe in the potential of the Mactan Airport to be a compelling gateway to the country for international passengers and to the Visayas for the growing domestic travelers,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.
“We share the vision of creating an airport that provides passengers an efficient and pleasant travel experience,” he added.
The Mactan Airport is operating at over-capacity with passenger volumes exceeding 5 million annually and is projected to grow even faster with the expected increase in tourist arrivals, the statement said. The redevelopment of the airport will require the construction of a new international passenger terminal.
“We are equally excited about this partnership with Ayala, especially as it is for a project that gives AEV the opportunity to enter into a strategic new segment that is crucial to developing both the country’s transportation infrastructure as well as its tourism potential,” AEV President and Chief Executive Officer Erramon Aboitiz said in the same statement.
AEV, whose principals are mainly based in Cebu, derives most of its earnings from subsidiary Aboitiz Power Corp. compared to its relatively smaller banking and food units. It signaled in recent months its keen interest to expand in other sectors such as airport operations.
Ayala is the more diversified company with business interests in telecommunications, real-estate development, water infrastructure, banking and electronics manufacturing.
Considered the country’s oldest conglomerate, it has been gradually expanding outside its core businesses to include toll roads, railways and now airports. Ayala in December won the government’s first PPP, the 4-kilometer Daang Hari-South Luzon Expressway link.
The government is expected to announce the bidding for the Mactan airport project before the end of the year, the statement also showed.
“Both parties will enter into a definitive agreement once the bid rules or the terms of reference for the project have been finalized and published by the government and will likewise explore partnerships with experienced global airport operators to complete its consortium,” the statement said.