DOTC studying ban on airline owners bidding for Cebu airport

by Coco Alcuaz, ANC

Posted at Jan 29 2013 06:58 PM | Updated as of Jan 30 2013 08:26 PM

MANILA, Philippines - Transportation Undersecretary Jose Perpetuo Lotilla said the government is studying other countries' rules on allowing airline owners to operate airports in order to ensure there are enough bidders.

The DOTC has barred airline owners from bidding for the contract to build and run a new Mactan, Cebu terminal, citing potential conflictsof interest once the terminal is operational.

Media reports say this has raised objections from John Gokongwei's JG Summit Holdings Inc., owner of Cebu Pacific, and Ramon Ang's San Miguel Corp., part owner of
the Philippine Airlines group.

The government called off Monday's pre-bid conference with potential bidders, saying it needs to give them time to inspect the airport.

"The rule, as set out, is a blanket prohibition (on companies that also own airlines). There have been questions and inquiries. Government is looking out in the field," Lotilla said at a Spain-Philippines forum in Makati.

"There are issues that arise from a blanket prohibition that could, for example, affect the number of bidders. Some management books say that for a good bidding you should have seven participants."

The Ayala and Aboitiz groups are ready to submit their joint bid whenever the bidding is set, Noel Kintanar, Ayala's head of Business Development-Infrastructure, said at the same event.

Getinsa, the Spanish engineering company that's part of the Ayala-led group that won the Daang Hari road project, said the Philippines is investor friendly except for the prohibition or limit on foreign investment in some areas, including the ban on property ownership except via condominium titles.

"That's not good for long-term investment," Pedro Gomez, its president, said at the same event.