MCIA row: Sending wrong signal to potential investors

Last week, I had the opportunity to accompany around Metro Cebu (together with representatives of the Board of Investments – Cebu Office and the Department of Tourism - from Manila and Cebu) a senior executive from a Middle Eastern multinational and multibillion-dollar company that is instrumental in the development and progress of Dubai, United Arab Emirates.  After such brief but relevant ocular inspection, he unequivocally expressed his interest in working with the government through the public-private partnership (PPP) scheme (as the first priority).  Indeed, it was a very refreshing thought worth entertaining as a confidence vote to our country’s supposed laudable vision and good governance.  One caveat though.  He isn’t aware of the brewing controversy of the expansion project at the Mactan Cebu International Airport (MCIA).

To recall, the Filinvest Group, the second highest bidder, protested the outcome of the bidding.  In a letter they sent on January 2, 2014, they questioned the selection of GMR – Megawide Consortium as the highest project bidder due to a “conflict of interest”.  In such protest, the language is so simple and self-explanatory.  Interestingly, just like such easily understandable protest, our rules are also clearly set out in this regard. Rule 5 (Qualification of Bidders) of the implementing rules and regulations of R. A. No. 6957, as amended by R. A. No. 7718, “An act authorizing the financing, construction, operation and maintenance of infrastructure projects by the private sector and for other purposes”, clearly stipulated all pre-qualification requirements.  For one, subsection (a) of Sec. 5.4 (the section that establishes pre-qualification requirements) requires the submission of documents that would establish the identity of the bidders and its stockholders and officers.  Moreover, the second paragraph of subsection (c) of Sec. 5.4 states that, “For purposes of the above, joint ventures/consortia shall submit as part of its pre-qualification statement a business plan which shall, among others, identify its members and its contractor(s), if the experience of its contractor(s) are necessary for the determination of the capacity of the joint venture/consortium to undertake the project and the description of the respective roles said members and contractors, if necessary, shall play or undertake in the project.”  Thus, if the submitted documents and information were scrutinized, the identities of the bidders and their partners could have been easily established at the pre-qualification stage.

Going back to the controversy at hand, the very heart of the complaint is on the “Conflict of Interest” rule.  When we talk about conflict of interest, we certainly refer to the identities of the bidding participants (the bidders’ partners included).  The question is, are these identities known during the prequalification stage?  The answer is an absolute yes.  Then, why just raise a howl now when the sealed bids are opened and the best bid is revealed. 

With such fact obtaining and yet unrevealed during the prequalification stage, there could only be two possibilities.  It’s either the Pre-qualification, Bids and Awards Committee (PBAC) is so negligent.  Or, some bidders (like Filinvest) knew of such fact but have kept it closer to its chest for future use (like the complaint they filed now) as leverage to stay relevant project-ownership-wise.

Today, Filinvest Development Corp., thru its EVP and COO, Mr. Eleuterio Coronel, said that “we are hoping that they will abide by the rules and if they follow the rules, they will recognize the validity of the issues we are raising”.  We can’t help but agree wholeheartedly with Mr.  Coronel.  But is it not also part of the rules that determining of “conflict of interest”, if it does exist, be done during the pre-qualification stage? 

Worst, as has always been customary, some politicians a.k.a. lawmakers have joined the fray.  Well, supposedly, as usual, in aid of legislation.  The question is, are they really getting involve in this controversy on their own volition as lawmakers or are they making some noise now because a bidder prodded them to do so.  Whatever is true, we don’t know and we will never know.  One thing is certain though, politicians/lawmakers will not get involve for nothing.  Customarily, they shall dip their hands into something either for publicity or for something fishy.

Indeed, this ongoing MCIA row presents several possibilities.  Consequentially though, there could only be one clear possibility,and, it could be worse.  We are sending wrong signal to prospective investors.

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