12 airports up for upgrades

THE GOVERNMENT plans to upgrade 12 airports, including Manila’s dilapidated main international airport, as it seeks to attract 10 million foreign tourists by 2016 and help fuel one of Asia’s fastest growing economies.

Three of the projects have a combined cost of up to P54.6 billion while costs for others are still being finalized.

Half of the planned projects will be done through the Public-Private Partnership (PPP) scheme, Cosette V. Canilao, executive director at the agency overseeing the program, told reporters on the sidelines of an investors’ forum in Manila.

Ms. Canilao also said operations and maintenance of these airports could be "bundled" into one tender, which will be offered to investors later this year.

Transportation Undersecretary Rene K. Limcaoco said the government was looking at building a new terminal for the Ninoy Aquino International Airport (NAIA) in Manila, the Philippines’ main gateway, which is also undergoing repair.

The Puerto Princesa Airport on Palawan island, southwest of Manila, and Clark International Airport in Pampanga, north of the capital, are included in the list of gateways which the government wants to modernize and upgrade.

The planned upgrades will "ease our logistic costs, alleviate our traffic congestion and support the target of the Department of Tourism to achieve its 10 million tourists for 2016," Mr. Limcaoco said at the forum.

The Philippines attracted 4.7 million foreign tourists last year, 300,000 short of its goal, state data showed.

President Benigno Aquino wants to make the tourism sector one of the key drivers of the economy. The economy grew 7.2% in 2013, the second fastest in Asia after China.

Rehabilitation of NAIA Terminal 1 will be completed by early 2015 at the latest, while the airport’s Terminal 3 will be fully-operational in July this year, said Mr. Limcaoco.

He also said the Department of Transportation and Communications (DoTC) is sticking with its end-March target to award the P17.52 billion ($391 million) PPP contract for the Mactan-Cebu International Airport Terminal (MCIA).

‘WE WILL NOT BE BULLIED’
The consortium of GMR Infrastructure Ltd. and Megawide Construction Corp. (GMR-Megawide) has made the highest bid, P14.4 billion, for the MCIA project.

Awarding has been delayed two months, however, due to conflict of interest allegations by a rival bidder, the consortium of Filinvest Development Corp. and Singapore’s Changi Airports International (Filinvest-Changi).

There was also a Senate hearing earlier this month on GMR-Megawide’s ability to finance the project, which consortium officials assured in a press conference yesterday.

"The funds are ready. If we’re given the award, we’ll present the check," GMR Deputy Chief Executive Officer Andrew Acquaah Harrison said at the press conference in Cebu yesterday.

Mr. Harrison said "very advanced talks" are being held with three local banks. The Asian Development Bank, International Finance Corp. and Standard Chartered Bank have also issued testimonial letters on GMR-Megawide’s good financial standing, he added.

Manuel Louie B. Ferrer, Megawide chief marketing officer, said BDO Unibank, Inc., which also funds other Megawide projects, heads the consortium of local banks willing to support the airport projects. He added that the same group of local and foreign banks had also financed around 70% of the P14.4-billion upfront payment.

"We believe this [contract] is rightfully ours. We will not be bullied into retreating. We believe we have the financial and technical capability [to undertake the project]," Mr. Ferrer added.

CONFLICTING REPORTS
In a related development, Senator Sergio R. Osmeña III yesterday chided Ms. Canilao for purportedly announcing that the MCIA contract would be awarded to GMR-Megawide.

A newspaper had reported on its Web site on Tuesday that the PPP Center official had said the DoTC was keeping to its target to award the contract to the consortium by the end of March.

"It is highly irregular that Ms. Canilao has taken it upon herself to speak with authority that the DoTC is set to award the project to GMR-Megawide before the end of the month, even prior to the PBAC’s (Prequalification Bids and Awards Committee) submission of its findings and recommendations to the MCIA Board," Mr. Osmeña said in a press release yesterday.

Asked for comment, however, Ms. Canilao denied ever disclosing that the DoTC would do so.

"I don’t know where he [Mr. Osmeña] got the information that I said that. I did not [announce anything]," Ms. Canilao told BusinessWorld in a text message yesterday.

Mr. Osmeña, in turn, cited the said news report.

For his part, DoTC Spokesman Michael Arthur C. Sagcal told BusinessWorld in a separate text message that the department is still evaluating GMR-Megawide’s qualification requirements.

"We’re in the post-qualification stage, specifically financial evaluation." Mr. Sagcal said. -- Reuters with inputs from Marites S. Villamor in Cebu and M.L.V. Angeles in Manila

source:  Businessworld