SMC buys 70% of Phl group in DMIA project

MANILA, Philippines -  Diversifying conglomerate San Miguel Corp. (SMC) is acquiring a 70-percent stake in Philco Aero, the Filipino partner in the Filipino-Korean consortium that submitted an unsolicited proposal to undertake the development and operation of Diosdado Macapagal International Airport (DMIA) Terminal II project for $144 million.

Philco Aero president Ricardo Penson told The STAR that SMC has placed its investment in the former in escrow and will be released as soon as they officially bag the project.

The STAR earlier reported that the Bases Conversion Development Authority (BCDA) has given subsidiary CIAC, particularly the latter’s joint venture selection committee, the go-signal to prepare the terms of reference to subject the Philco Aero proposal to a Swiss challenge as required by government rules for unsolicited proposals to undertake joint venture projects with the government.

Penson also confirmed that Metro Pacific Investment Corp. (MPIC) is no longer interested in joining the consortium.

MPIC earlier said that it was partnering with SMC for the DMIA Terminal II project, but it was learned that talks between the two companies for a possible partnership never happened.

Penson also said in an interview that SMC has reimbursed the cost shelled out by Philco Aero for the development of the unsolicited proposal submitted to CIAC.

MPIC chairman Manuel V. Pangilinan has said that he wants a more comprehensive approach to the development of the Clark Airport, to include not only the development of a second terminal but also the construction of a high-speed rail system that will connect Clark to Metro Manila.

But Penson said their group has a cheaper approach to connecting Clark to Manila, and that is by way of articulated transport buses.

He said that each RTB will cost around 15,000 euros per bus with each bus able to accommodate 200 passengers. “We would probably need 10 buses,” he said. This would mean the cost of the 10 buses would be around P9 million.

Aside from the buses, Penson said can construct a one-lane culvert dedicated for the buses.

He pointed out that unless DMIA is designated as a gateway, it would not make financial sense to spend so much for a transport system connecting Clark to Metro Manila, especially since a big portion of DMIA’s passengers come from Central Luzon and not from Metro Manila.

Penson revealed that since the mass transit system was not part of their unsolicited proposal to CIAC, their consortium can either amend their original proposal or submit the bus system project as a separate proposal.

He said that he has discussed the matter of the buses with SMC president Ramon Ang.

It is not yet clear how MPIC intends to enter the picture, although observers say the company can submit a better offer during the Swiss challenge phase. Under a Swiss challenge, any qualified group can submit a better proposal which the proponent of the unsolicited proposal has the right to match.

Pangilinan earlier said they are in talks with possible foreign partners involved in the aviation business for a comprehensive multi-billion airport project in Clark that will involve building and operating not only a second terminal at the DMIA but also a modern railway system connecting the airport to Manila.

“We need foreign partners for this project. Because basically, there is no one in this country who has built or made or run a big airport as big as this. We have to import expertise initially. We are talking to several groups involved in the airport business within the region,” Pangilinan said.

Another mode by which MPIC can come in is if the Department of Transportation and Communications (DOTC) pushes through with reported plans to junk Philco Aero’s unsolicited proposal and instead conduct a new bidding involving solicited proposals.

But Penson said that if the report is true, it is unclear why DOTC would want to take the solicited proposal route which would require sovereign guarantees.

“Why delay the project further? And the Clark airport is not under the DOTC. It is under CIAC which is a wholly owned subsidiary of BCDA which in turn is under the Office of the President, not the DOTC,” he emphasized.