Megawide: Dummy, dumb or damn lucky?

Infrastructure projects, especially airports in the Philippines, are almost always controversial – a disgruntled bidder, a right-of-way issue, environmental problems, etc. It’s no surprise our airports almost always take time to develop. The result is that some of our gateways have been lumped together with the world’s worst by travelers from the world over.

But when controversies prop up six years after an airport deal is sealed and the gateway is running efficiently with awards to boot, one wonders if there’s anyone pulling the strings behind the complaint.

Last October, the Department of Justice resolved to indict officials of GMR Megawide Cebu Airport Corp. (GMCAC) for violations of the Anti-Dummy Law and other laws, acting on the complaint filed by Larry Iguidez, a lawyer, in September last year.

GMCAC owns the franchise to operate and maintain the Mactan Cebu International Airport for 25 years starting in 2014.

It’s a curious case. The timing of the complaint coincided with the grant of Original Proponent Status to Megawide for another airport project last year, the NAIA rehabilitation, which in the end, did not materialize.

The complaint said respondents “conspired, connived, colluded, schemed and acted together” to violate the Constitution, the Anti-Dummy Law, the Anti-Graft and Corrupt Practices Act and the Code of Conduct and Ethical Standards of Public Officials and Employees.

The Mactan Cebu Airport, the complainant said is “operated, administered and managed by non-Filipinos, particularly an Irish, a Ghanaian, and some Indians.”

Complainant cited as examples of his contention several instances when the foreign nationals represented MCIA, such as ribbon-cutting and awarding ceremonies.

He said he is doing this for the Filipino people.

What is the Anti-Dummy Law?

The Anti-Dummy Law is an important law created to penalize those who violate foreign equity restrictions and evade nationalization laws of the Philippines. It prohibits dummy or using a proxy arrangement to accomplish a transaction not allowed under Philippine law, says an article in attorney.org.ph.

Against this backdrop, whether or not the case prospers, GMCAC would have to prove to the public that its existence and operations are all within the bounds of the law.

But the complainant would also have to prove his case, beyond saying that foreigners in ribbon cutting ceremonies mean violations of the Anti-Dummy Law.

As far as I recall, since covering listed companies such as Megawide over the past couple of years, there was never an Anti-Dummy case against GMCAC or similar violations.

On the contrary, the airport operator would be in the news mostly because of developments in the airport and awards.

Thus, the timing is suspect because it dropped like a bombshell when Megawide was vying for the NAIA rehabilitation project last year. (Its OPS was eventually revoked).

Could other businessmen be behind this?

But as I said, Megawide officials, led by chairman Ed Saavedra, would have to answer the charges and prove that the company’s business operations are all within the bounds of the law.

On a bigger, larger scale, I can’t help but wonder what’s the motive behind the complaint.

Could someone be hating Megawide’s guts or feel the group just got damn lucky with the Mactan Cebu Airport deal and shouldn’t be getting any more big-ticket projects?

For sure, Megawide has guts. The group is quite aggressive and audacious, as audacious perhaps as the pompadour hairstyle of Saavedra, a hairstyle named after Madame de Pompadour, the mistress of King Louis XV of France.

They’re so audacious they’re not afraid to bid on big projects and go head to head with the Big Boys of Philippine business. But they’re not dumb. They’re engineering and industrial design graduates from La Salle.

And it’s not as if they’re Lost Boys in Neverland. Their board of directors includes former chief justice Hilario Davide Jr., former UP president Alfredo Pascual and Celso Vivas, formerly of SGV.

Megawide is not afraid to borrow to expand. History will judge them later on if they’re on the right track in their aggressiveness. Or if their projects indeed succeed.

The MCIA is just one of their projects, and so far, it’s been recognized globally for its efficiency and for being an architectural marvel.

Robber barons

If this complaint leads back to big business trying to put down potential competition, Filipino consumers will end up at the losing end.

The result will be a business community with the same old boys and hardly a room for new players. It will also discourage starting entrepreneurs from growing a business if they can’t compete with existing players anyway.

Remember the robber barons of America in the 19th century, during the Gilded Age? The so-called robber barons were successful industrialists, but their business practices were often considered ruthless as they often restricted competitor firms.

I hope this isn’t the motive behind the case against Megawide. In any case, Megawide will have to face the complaint and prove its innocence if it indeed did not violate any law.

But if it’s all ugly wars and a case of crab mentality between big businesses and newcomers, then Filipino consumers will end up at the losing end.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com