MVP, Gokongwei tie up for Cebu airport
MANILA, Philippines - Publicly-held Metro Pacific Investments Corp. (MPIC) of Hong Kong’s First Pacific and JG Summit Holdings Inc. of taipan John L. Gokongwei Jr. have joined forces to boost their chances of bagging the P17.5-billion Mactan-Cebu International Airport project.
This developed as the Department of Transportation and Communications (DOTC) is no longer inclined on further relaxing the guidelines for the development of the country’s second largest international airport.
MPIC chairman Manuel V. Pangilinan told reporters on the sidelines of an event hosted by TV5 network at the Resorts World Hotel that the company has reached an agreement with JG Summit to form a consortium that would bid for the multi-billion peso project.
“We have reached an agreement in principle to manage the Mactan Cebu international airport as a consortium,” Pangilinan stressed.
Under that agreement, JG Summit – which owns budget airline Cebu Air Inc. (Cebu Pacific) – could own no more than 33 percent of the special purpose vehicle to be created should the partners win the public bidding process.
At the pre-qualification process the DOTC held at the EDSA Shangri-la Hotel yesterday, executives said prospective bidders for the airport project have reportedly increased from seven original participants to around eleven.
Last Feb. 2, the agency’s bids and awards committee (BAC) revised the bidding guidelines by finally allowing owners of airline and their affiliates to participate but on a limited basis in the P17.5 billion project.
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 that owns Cebu Pacific on the first terms of reference that was issued late last December.
Aside from providing the government with more competitive proposals from the private sector, the new guidelines would also protect against a potential conflict-of-interest situation through a strict competition safeguards in the concession agreement.
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.
According to the new guidelines that was uploaded in the DOTC website Friday evening, airline companies and entities having any relationship with an airline company may own up to a maximum of 33 percent of the shares in the winning bidder’s Special Purpose Company (SPC) that would be given the concession.
The guidelines, however, state that no airline company should be directly involved in operations. The terms still prevent airline companies and airline-related entities from having a direct interest in the facility operator who would actually operate the airport.