Megawide-GMR ready with P14.4-B down payment for airport project

MANILA, Philippines - The tandem of Filipino-owned Megawide Construction Corp. and Bangalore-based GMR Airports Ltd. said yesterday the joint venture is ready with P14.4-billion down payment for the P17.5-billion Mactan-Cebu international airport project.

In an interview with The STAR, GMR Airports chief executive officer Puvan Sripathy said the joint venture is ready to pay the government the P14.49-billion bid it submitted last month once the Department of Transportation and Communications (DOTC) issues the notice of award to the company.

“Our down payment is ready. According to the rules, when the notice of award is issued we have to pay them within 20 days. But we are ready with the money,” Sripathy said.

He pointed out that the GMR Group which is into airports, energy, highways, and urban infrastructure has $1-billion cash on hand that is ready for investments around the world.

 â€œWe are not a small institution. We are not only into airports but we are also into energy highways and urban infrastructure. Our balance sheet shows almost $1 billion in hot currency or cash so the insinuations that we will not be able to pay are rubbish,” he said.

To fund the P17.5-billion public private partnership (PPP) project involving the Mactan-Cebu international airport, Sripathy said the partnership with Megawide is already talking to three international banks for loans.

“We are already talking with three banks. At least there are three of them and we will choose one from them,” he said as the joint venture intends to source 70 percent of the total project cost from loans and 30 percent from equity,

The Megawide-GMR tandem submitted the highest bid of P14.4 billion for the project last Dec. 12 followed by the Filinvest – Changi Airport Consortium with P13.999 billion, and Premier Airport Group of SM Group of retail magnate Henry Sy with P12.5 billion.

The MPIC-JGS Airport consortium led by infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) and JG Summit Holdings submitted a bid of P11.23 billion while AAA Airport Partners led by the conglomerate Ayala Group and Cebu-based Aboitiz Land forwarded a bid of P11.088 billion.

The San Miguel Corp.-Incheon Airport consortium submitted a bid of P9.05 billion while the Lopez groups’ First Philippine Airports submitted the lowest bid of P4.7 billion.

However, the Filinvest Group has questioned the financial capacity of the Megawide-GMR Consortium and accused the group of conflict of interest due to partnerships with Malaysian Airports.

Sripathy, on the other hand, turned the tables on the Filinvest Group saying the company has no experience in undertaking infrastructure projects as it was only engaged in property development and some energy development projects.

 â€œThese people are not into infrastructure. Filinvest is a property developer so they do not know what they are talking about. All I know is they are developing an energy project somewhere but what do they know about infrastructure,” he argued.

Aside from a healthy balance sheet, he stressed the GMR Group never defaulted in the payment of any loan.

“We have never every defaulted,” he added.

For his part, Delhi International Airport Ltd. deputy chief executive officer Andrew Acquaah-Harrison said the airport projects of the GMR Group includes the GMR Hyderabad International Airport with a capacity of 40 million passengers, the Delhi International Airport with a capacity of 100 million passengers, and the Sabiha Goken International Airport in Istanbul, Turkey with a capacity of 25 million.

 Harrison said the company intends to boost tourism not only in Cebu but the entire country to help boost economic growth.

 â€œWe want to build a better community. We will be bringing in more traffic not just for Cebu but the whole country,” he added.