Megawide, Indian partner submit best bid for Cebu airport

Posted at 12/12/2013 12:05 PM | Updated as of 12/13/2013 8:38 AM

MANILA, Philippines (3rd UPDATE) – A consortium led by Megawide Construction and New Delhi airport operator GMR Infrastructure submitted the best bid for the Mactan-Cebu International Airport project.

The consortium composed of Megawide Construction and GMR Infrastructure, which operates airports in India, Turkey and Maldives, submitted the highest bid of P14.40 billion.

Megawide chief financial officer Oliver Tan said that 70 percent of the bid amount will be raised via capital market in the first quarter of 2014. The other 30 percent will be raised by the subsidiary that it is forming with GMR.

Megawide and GMR aim to build an airport terminal that can accommodate 25 million passengers a year, more than three times the government requirement, Tan added.

But he said the plan would depend on developments in the tourism industry and the security situation, with Manila battling Muslim rebels in the south and a communist insurgency.

The group's bid reflects its "expectations in terms of the internal rate of return" of the project, Tan said, adding GMR would take a 40 percent stake in the joint venture.

GMR operates and maintains three airports in New Delhi and Hyderabad in India, and in Istanbul.

Megawide shares climbed as much as 5 percent in afternoon trade after the airport bids were announced, but later erased its gains to settle flat. The broader market was down 2 percent.

Megawide's PPP push

Megawide is involved in three other PPP projects—two school building projects, and the upgrade of the National Orthopedic Center.

Cosette Canilao, executive director of the Public-Private Partnership Center, said the Megawide-GMR consortium is “one of the top contenders” prior to the submission of bids based on its technical proposals.

“In the technical proposals, the passenger traffic forecasts were reflected and Megawide gave one of the higher passenger traffic forecasts,” she told ANC.

“GMR is actually an experienced airport operator. It is listed in India and is the operator of the Delhi, Turkey and Maldives airport. They’ve never lost in any PPP bids for airports,” she added.

The Department of Transportation and Communications (DOTC) opened the financial proposals of seven prequalified bidders for the country's first public private partnership (PPP) airport project on Thursday.

The six other bids are as follows:

•    Filinvest - CAI consortium which includes the operator of Singapore's Changi airport; (P13.99 billion)

•    Premier Airport group led by SM Investments Corp., Citadel Holdings Inc. and the operator of Zurich (Switzerland) airport (P12.5 billion)

•    Metro Pacific Investments Corp. - JG Summit airport consortium (P11.23 billion)

•    AAA Airport Partners led by the Ayala and Aboitiz groups (P11.08 billion)

•    San Miguel Corp. - Incheon Airport consortium (P9.05billion)

•    First Philippine Airports consortium led by First Philippine Holdings Corp. and Malaysia Airport Holdings (P4.7 billion)

The DOTC still has to evaluate the financial proposals before announcing the winning bid.

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Delays in the bidding process for high-profile PPP projects have clouded prospects of an infrastructure boost to sustain Philippine economic growth at 7 percent or higher.

 But Manila is now moving to expedite the process, opening bids for two projects this week.

On Monday, officials said a consortium of conglomerates Ayala Corp and Metro Pacific Corp gave the best bid for a 1.72 billion peso contract to operate a smart-card system for the elevated rail network in Manila.

The Mactan airport connects tourist spots in the central Philippines with direct flights from Asian cities such as Hong Kong, Singapore, Seoul and Tokyo.The existing terminal was designed with a 4.5 million passenger capacity, but 6.2 million passengers passed through in 2011. - With Lois Calderon, ANC and Reuters