MCIA project bidder pleas for transparency

CEBU, Philippines - The Filinvest-Changi Airports consortium has appealed with the Department of Transportation and Communications (DOTC) for a transparent and fair post-qualification review.

This was after DOTC deferred awarding the contract for the P17.5-billion Mactan-Cebu International Airport (MCIA) expansion deal to the winning bidder.

Among the requests of Filinvest Development Corporation (FDC) is for the DOTC and MCIAA Pre-Qualification Bids and Awards Committee (PBAC) to seriously look into the violation of the conflict of interest provision of the project's bidding rules.

FDC raised the conflict of interest violation as having been committed by the GMR - Megawide consortium of GMR Infrastructure Ltd. (GMR) and Megawide Construction Corporation, and the First Philippine Airports Consortium, which includes Malaysia Airports Holdings Berhad (MAHB).

Megawide-GMR of India offered the highest bid for the MCIA project, while First Philippine Airports Consortium-MAHB offered one of the lowest bids.

"One of the conflict of interest provisions prohibits a board member or partner of a bidder, consortium member or its affiliates, from being directly involved in any capacity in the MCIA bid process for another bidder, consortium member or its affiliates" said FDC President and CEO Josephine Gotianun Yap, in a statement.

FDC said GMR and MAHB were partners in all of GMR's airport affiliates which, according to Article 5.6 of the bidding rules, constitute a violation of conflict of interest.

The managing director of MAHB reportedly sits as director in all four GMR airports, namely: Delhi International Airport Private Ltd., GMR Hyderabad International Airport Ltd., Istanbul Sabiha Gokcen International Airport Group, and GMR Male International Airport (Maldives).

Yap said that if the two groups are found to be in violation of bidding rules, they can be disqualified in spite of their offering the highest bid.

According to the bidding rules, any violation of the conflict of interest provisions would result in disqualification.  If the highest bidder is disqualified, the PBAC would move on to the next highest bidder for pre-qualification review.

"The conflict of interest rules apply even to previous board members and partners within two years prior to the publication of the Invitation to Pre-Qualify and Bid for the MCIA Project and also to future board members and partners within one year after award of the project," Yap explained.

FDC is calling for the DOTC to exercise its full authority in ensuring that bidding rules and its implementing rules and regulations (IRR) are strictly followed during the pre- and post-qualification review.

"We participated in the MCIA bid because we had trust and confidence in the process and the fairness of the DOTC/MCIAA committee spearheading the bid. We have high regard that the PBAC will continue to show the same fairness and level playing field in the post-qualification stage of the bidding process," said Yap.

The MCIA project bidding rules state that to ensure a competitive bidding process, bidders, consortium members and their affiliates must not have any conflict of interest.

The bidding process requires a post-qualification review period after the opening of the financial bids to verify the information, representations and statements made by the highest bidder in its submissions.

This is the stage where the PBAC reviews if the conflict of interest provisions have been violated or not.

The DOTC is now reviewing information disclosed pertaining to the GMR - Megawide Consortium.

"We are confident that the Philippine Government will preserve the sanctity of the bidding rules since other potential PPP bidders and the local and global business community is keenly monitoring how the bidding process and rules are implemented and managed," Yap said.

The DOTC was supposed to award the project on Jan. 6 and seal the contract by Jan. 27. The concession agreement had been scheduled for signing on February 6.

But the Filinvest-Changi Airport consortium wrote to the DOTC Bids and Awards Committee asking for the disqualification of Megawide Construction Corp. and GMR Infrastructure Ltd.

Meanwhile, business and local government officials are asking for the swift resolution of the situation.

Mandaue Chamber of Commerce and Industry president Philip Tan said all of the issues should have been resolved earlier, or prior to the awarding of the project on the first week of January.

"Why just now when everything was done? Why the government allowed it to take place? Why the private sector has not raised any question prior the pre-bidding qualification? There is no time for name blame and sourgraping. The bidding process should not have taken place if there are still unresolved issues," he said.

Cebu Chamber of Commerce and Industry president Lito Maderazo said businessmen expect an early resolution of the problem, saying that since infrastructure in the Philippines is quite low compared to our Asian neighbors, the MCIA expansion project could prod prospective local and foreign investors to participate in other projects under the Private Public Partnership (PPP) scheme.

Cebu Business Club president Dondi Joseph echoed the same sentiments, saying the government agency should be given a deadline to resolve the issue.

Lapu-Lapu City tourism officials and businessmen are likewise are urging DOTC to reach an immediate resolution of the bidding controversy.

Hembler Mendoza, head of the Lapu-Lapu City Tourism Office, said immediate implementation of the Mactan Airport expansion project would benefit not only Lapu-Lapu City but the whole Cebu province because it would attract more visitors, especially tourists.

The 10,000-strong Cebu Korean Association, Inc. has also announced its full support for the expansion project.

Bong Hwan "Charlie" Cho, Cebu Korean Association, Inc. president, said there are around 30,000 Koreans in Cebu, some of whom are permanent residents while others are regular tourists who came through direct flights from Korean to Mactan Airport.

Also, Filinvest MCIA bid representative Joseph Yap said its consortium member Changi Airport SA is a 100-percent subsidiary of Changi Airport International (CAI), which is fully owned by Changi Airport Group (CAG), which operates Changi Airport in Singapore.

Yap said that in joining the bid process, their intention is to bring the Changi experience to Mactan Cebu through CAI, which is a wholly-owned subsidiary of CAG.

Mr Jose Pantangco, Jr., CAI senior vice president, said that there had been misleading articles in the press and in social media, saying that it is a sister company of Changi Airport, which prompted the issuance of an official statement.

Pantangco said CAI chose a 100-percent-owned subsidiary, which met DOTC requirements, to qualify for the tender.

This, he said, does not mean lesser commitment, as CA is "fully committed to all its overseas projects."— Gregg M. Rubio, Jose P. Sollano, Grace Melanie I. Lacamiento /RHM (FREEMAN)