Korean, Malaysian firms eye Cebu airport

MANILA, Philippines - Seoul-based Samsung C&T Corp. and Malaysia Airports Holdings Berhad (MAHB) are set to join the controversial P17.5-billion Mactan-Cebu international airport terminal project to be auctioned by the Department of Transportation and Communications (DOTC) this month.

In Special Bid Bulletin 02-2013, DOTC undersecretary Jose Perpetuo Lotilla answered the queries made by Samsung C&T and MAHB on the guidelines under the Instruction to Prospective Bidders (ITPB) of the renovation and expansion of the country’s second largest international airport.

Samsung C&T inquired about the P1-million non-refundable fee, the definition of ‘entity’ in the guidelines, and the co-purchase of bid documents together with other companies.

On the other hand, MAHB inquired whether it would meet the legal qualification requirement as a consortium member for the proposed international airport terminal project.

Samsung C&T, formerly known as Samsung Corp., is engaged in engineering and construction as well as trading and investments. It employs close to 11,000 employees worldwide and booked a profit of 424 billion Korean won in 2011.

Samsung is one of the foreign companies pre-qualified for the P30-billion civil works contract for the light rail transit (LRT) line 1 extension to Cavite together with its partners Hyundai Rotem Co. and Seoul Metro.

MAHB, which was incorporated in 1991and is listed at Kuala Lumpur Stock Exchange, manages, operates, and maintains as well as develops airports, with primary importance being placed on the operational efficiency, safety and security of passengers, cargo, and aircraft operations.

It operates and manages Malaysia’s 39 airports comprising of international, domestic and Short Take-Off and Landing (STOL) ports led by the Kuala Lumpur International Airport and provides management services at the Delhi International Airport and Hyderabad International Airport in India, and Sabiha Gokcen International Airport in Turkey.

Lotilla, who also chairs the agency’s pre-qualification, bids and awards committee, replied to queries made by Metro Pacific Investments Corp. (MPIC) of Hong Kong’s First Pacific, Aboitiz Land, and auditing firm SG&V Co.

MPIC chairman Manuel V. Pangilinan earlier said the company was talking to several airport operators in Asia as well as Europe to boost its chances of winning the bidding for the airport project.

Based on a PPP Center briefing paper, the Mactan-Cebu airport project involves the construction of a world-class passenger terminal building with a capacity of eight million passengers a year as well as the operation and maintenance of the old and new facilities.

The Mactan-Cebu international airport is situated in a 797-hectare property and has a single 3,300-meter runway that is complemented by a full-length taxiway. Its terminal building has a capacity of handling 4.5 million passengers annually. It is a major trade center in the south for both domestic and international traffic.

Last Friday, the DOTC?s PBACˇrevised the bidding guidelines for the international airport terminal project and allowing a limited participation for owners of airlines who were preventing from the bidding under the original guidelines issued last Dec. 27.

The guidelines were revised after an uproar from prospective bidders led by diversified conglomerate San Miguel Corp. (SMC) that owns 49 percent of national flag carrier Philippines Airlines and JG Summit Holdings Inc. of taipan John L. Gokongwei Jr. that owns budget airline Cebu Air Inc. (Cebu Pacific).

In a statement issued Friday evening, Transportation Secretary Joseph Emilio Abaya said the agency and the Mactan-Cebu International Airport Authority (MCIAA) decided to revise theˇbid criteria under the Instructions to Prospective Bidders (ITPB) to encourage broader participation in the bid.

Aside from providing the government with more competitive proposals from the private sector, Abaya said the new guidelines would also protect against a potential conflict-of-interest situation through a strict competition safeguards in the concession agreement.

"After careful evaluation and deliberation on the best policy to adopt for the new Mactan-Cebu International Airport Terminal Project that would both maintain a level playing field and allow the infusion of expertise and experience into the operation of the new terminal, we have decided to modify our ITPB for the project," Abaya said.

Abaya said the new guidelines now allow airline companies, their subsidiaries, affiliates, and parent companies to have a limited stake of 33 percent in the entities that would qualify for the project.

The DOTC has given interested bidders more time to conduct ocular inspection at the Mactan-Cebu International Airport as it postponed the pre-qualification conference to Feb. 13 instead of Jan. 28 and the submission and opening of qualification documents to Feb. 27 from Feb. 18.

Meanwhile, a fair open skies advocate has welcomed the news that the DOTC has reconsidered its earlier decision preventing airlines and their affiliates from bidding for the P17-billion Mactan-Cebu International Airport.

"I am glad that the DOTC has relented and is coming up with a new terms of reference for the airport contract," Robert Lim Joseph, chairman of Fair Open Skies, Tourism Educators and Movers Philippines (TEAM) Philippines and the Network of Independent Travel Agencies (NITAS) said.

Joseph said safeguards are already in place and there are government agencies overseeing the industry, including the Civil Aviation Authority of the Philippines which has jurisdiction over air transportation and has the sole authority to determine and fix schedules, charges or rates pertinent to the operation of public air utility facilities and services, and the Civil Aeronautics Board which regulates the economic aspect of air transport and supervises the airlines, including their property, equipment, franchise and facilities.