Philippines’ pride

In awarding a contract to build a public infrastructure project, track record and financial capacity are probably two of the most important factors that are considered, in addition of course to the bid price or the cost of constructing the project.

In so far as track record is concerned, President Duterte seems to have been visibly impressed with the work done by Filipino-owned construction company Megawide Corporation to transform the old and dilapidated Mactan-Cebu International Airport (MCIA) into what he dubs as the most beautiful airport in the Philippines and a source of pride.

In his speech during the inauguration of the P17.5-billion new passenger terminal at the MCIA in 2018, the President said that he is extra proud to be a citizen of this country and most proud to be a worker of a government which has produced something very beautiful and good for the people.

Touted as a resort airport, MCIA was funded by the government’s Build Build Build program and was built by a consortium composed of listed firm Megawide and India’s GMR Infrastructure, considered as the fourth largest airport operator in the world.

In the same speech, President Duterte said that the consortium has a very good track record, adding that so long as done through bidding, the group could have all the airport that they want.

According to recent media reports, Megawide CEO Ed Saavedra gathered his team after that accepted the challenge. After all, being acknowledged as the best by the President is no small feat.

Hailed as the world’s friendliest resort airport, MCIA has received numerous international awards since its opening. I was informed that just last year, it defeated Singapore’s Jewel Changi, touted as the best airport in the world, at the World Architecture Festival. MCIA Terminal 2 won the “Completed Buildings-Transport” category, besting Singapore’s Jewel Changi Airport and other outstanding global projects.

MCIA’s Terminal 2 has also been named as the sole awardee in the Architecture and Allied Arts category of the 12th Ani ng Dangal or Harvest of Honors awards held at Malacanang. In his speech, Louie Ferrer, president of GMR Megawide Cebu Airport Corp., which is the private company developing and operating MCIA, said that they would strive to continue bringing pride and honor to the country by providing world-class service and facilities that highlight the warmth, hospitality, and vibrant culture of the Filipino people.

Airports, in addition to seaports, are gateways to any country. Upon arriving at any country, the first thing one sees and experiences is the walk to the immigration counter if applicable, followed by the baggage counters before exiting the terminal. While the stay at the airport can last a few minutes to a few hours, it definitely gives a first, but lasting impression to any traveller on what to expect from a country. Because Filipinos are innately warm and hospitable, then it goes without saying that our airports should also exhibit the same vibe. And based on feedbacks, MCIA has lived up to this challenge.

Megawide and GMR also teamed up in the development of the new terminals at the New Clark International Airport.

And now, on to the next challenge.

It will be recalled that the Megawide-GMR consortium was granted original proponent status to upgrade and modernize the Ninoy Aquino International Airport (NAIA). The group has proposed to address congestion in NAIA in seven years or less by gradually expanding its capacity to 65 million passengers per year. Currently, it is designed to accommodate 31 million passenger yearly, but struggles to meet the needs of about 45 million passengers prior to the pandemic.

As part of its proposal, the group will also build a passenger railway link that would connect the airport terminals within the 650-hectare complex, on top of a bus rapid transit system.

Unfortunately, the group’s proposal to replicate MCIA’s success in the country’s main gateway in Metro Manila has recently been the subject of criticisms to the point that some groups want it disqualified for not having the financial muscle to undertake the program.

Recently, Puwersa ng Bayaning Atleta (PBA) Partylist Rep. Jericho Nograles questioned potential foreign ownership violations in the consortium that manages the MCIA, but Megawide in a recent statement emphasized that as widely-held, publicly listed companies, Megawide and GMR strictly adhere to all pertinent laws, rules, and regulations, especially relating to public infrastructure projects bidded by the Philippine national government.

This, Megawide said, has been done with the MCIA and would continue to be done for the rehabilitation and transformation of NAIA.

Nograles also claimed that the GMR Group suddenly pulled out of the NAIA deal. But the government’s news agency has reported that the consortium has already complied with the additional requirements necessary for its P109 billion unsolicited proposal to rehabilitate and transform NAIA into a world-class airport. These include the statement of joint and solidary liability from the consortium required by NEDA, and according to Ferrer, who is also Megawide’s managing director for transport, the financial documents submitted are sufficient to exclusively support the project’s requirements.

Ferrer said this should already convince the government to approve their proposal and give them the green light for the Swiss challenge. If no other bidders emerge or even if there are, the consortium is willing to match the offer to finally bag the deal.

Megawide also recently concluded an agreement with GMR, with both companies agreeing to a partnership to undertake the rehabilitation and transformation of NAIA. Under the agreement, Megawide will hold a controlling 60 percent interest in the partnership with GMR retaining 40 percent.

So both the financial concerns and compliance with the 60-40 foreign equity requirement have been sufficiently addressed.

But then there is still some question about an alleged violation of the Anti-Dummy Law with the National Bureau of Investigation which stems from a complaint regarding the award of the operation and management of MCIA to GMR Megawide Cebu Airport Corp. under a 25-year concession after winning the bid for P14.4 billion. It is claimed that MCIA is being managed by non-Filipinos, and under the Constitution, public utilities must be managed by companies  of which  at least 60 percent of the capital stock must be owned by Filipinos.

What is interesting to find out is who is really behind this challenge and what is their motivation? Is this aimed at destroying the consortium’s reputation now that they are interested in developing NAIA?

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