Award of Mactan-Cebu International Airport’s expansion project delayed

The Philippines Mactan-Cebu International Airport’s award of PHP17.5bn ($390.40m) expansion project has hit a hurdle after a losing bidder sought a reconsideration of the auction.

The Department of Transportation and Communications (DOTC) is responding by re-evaluating the winning Megawide-GMR consortium’s ability to take up the project.

Filinvest-Changi group alleged that financial woes, unsatisfactory performance record, and questionable long-term commitment of GMR would disrupt the ‘rare opportunity’ of establishing a world-class airport.

According to transport secretary Joseph Emilio Abaya, Filinvest-Changi Airport consortium wrote to the DOTC Bids and Awards Committee (BAC), seeking the cancellation of the Megawide-GMR consortium.

Abaya said that the issues raised by Filinvest-Changi will be addressed first before the notice of award is issued.

The consortium of Filipino-owned Megawide Construction Corp. and Bangalore-based GMR Infrastructure submitted the best bid for a project to operate and expand Mactan-Cebu International Airport in Philippines.

Megawide-GMR offered a PHP14.4bn ($321.24m) premium, which beat offers made by six other groups for the 25-year concession to operate the airport and establish one of its terminals.

The consortium led by banking firm Filinvest Development (FDC.PS) and Changi Airports Saudi had the second-highest bid, with a premium that was PHP401m ($8.94m) lower.

Other bidders for the project include the MPIC-JGS consortium, Premier Airport Group, the San Miguel-Incheon Airport consortium, AAA Airport Partners led by Ayala and Aboitiz groups, and First Philippine Airports Consortium.

DOTC was expected to award the project on 6 January, the contract was to be sealed by 27 January, while the concession agreement had been scheduled for signing on 6 February.

The public-private partnership (PPP) project involves the construction of a new international passenger terminal with a capacity to handle eight million passengers annually, and the renovation and expansion of the old terminal.

It also covers the installation of the required new equipment, and the operation of the existing and new facilities.

After the construction of the international terminal, the existing terminal will be converted into an exclusively domestic passenger terminal.