GMR-Megawide Consortium still needs to pass financial review

THE Department of Transportation and Communications (DOTC) is still in the process of reviewing the financial proposal of front-runner GMR Infrastructure Ltd. and Megawide Construction Corp. Consortium for the P17.5-billion Mactan-Cebu International Airport (MCIA) New Passenger Terminal Project.

Transportation Undersecretary Jose Perpetuo Lotilla said it is still possible should the GMR-Megawide Consortium fail to hurdle the review, the agency will have to review the proposal of the bidder with the second-best tender.

The partners offered a P14.4-billion premium on top of the project cost, allowing the Filipino-Indian consortium to secure the top position in the auction held last December.

Bidding rules, according to Transportation Secretary Joseph Emilio Abaya, provide that only the winning bidder’s financial evaluation shall be evaluated.

If its offer fails the review, that is the only time the agency can move forward to assessing the financial bid of the second-best bidder, which in this case is the tandem of Filinvest Development Corp. and Changi Airports Mena Pte. Ltd.

The Filipino-Singaporean partners offered a lower P14-billion premium for the project.

“If Megawide-GMR fails, the bids and awards committee will move to Filinvest-Changi. That’s what the rules provide,” Abaya told the BusinessMirror via text.

Awarding for the project was originally scheduled last January. It has been delayed for about three months now because of allegations of conflict of interest between two parties involved in the auction.

Filinvest-Changi alleged that the managing director of Malaysia Airports Holdings Bhd. Tansri Bashir sits as a director in 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).

The Malaysian firm participated in the auction for the said project together with Filipino partner First Philippine Holdings Corp.

Megawide-GMR, however, explained that Bashir, who is a board member of the four airports enumerated, “has no role to play in the bid, since he is not a member of the Board of Directors of GMR.”

Transportation Spokesman Michael Arthur Sagcal admitted that the government is having a hard time collecting pieces of evidence to validate the accusation, noting that there is a “dearth” in the proof available.

“There is no decision yet as to which group will win the contract.  No recommendation has been made to the secretary,” Sagcal said. “[The agency] is being thorough in resolving the matter to ensure that its decision will be in accordance with what the law and the rules alone prescribe.”

“We will, of course, endeavor to achieve the target date,” Lotilla, who chairs the bids and awards committee of the agency, said separately.

According to bidding rules, the special prequalification bids and awards committee (Special PBAC) shall recommend a winning bidder to Abaya for the awarding of the project. After the Transport chief’s approval, the Mactan-Cebu International Airport Authority (MCIAA) shall then assess the recommendation.

The MCIAA Board of Directors will then decide on whether or not to approve such award.  Only after these steps are observed can the concession be considered as having been awarded.

The Special PBAC discusses and debates on the relevant issues throughout the procurement process, to ensure proper decisions are made.  From pre-qualification to post-qualification, the Special PBAC reviews the recommendations of the technical working group (TWG) and its consultants.

In each of the bidding stages, the TWG and the consultants are required to present their findings to the Special PBAC, which then has the opportunity to dissect the summary reports prepared and submitted by the TWG.

All these steps are taken in accordance with the Build-Operate-and-Transfer Law, which provides for the particular actions required in the conduct of bid activities.

Megawide has cemented its image as a mainstay in the government’s flagship infrastructure program, bagging a number of public-private partnership (PPP) projects: the P16.42-billion PPP for School Infrastructure Project (PSIP) Phase 1, two of the five contracts under the P8.8-billion PSIP Phase 2 and the P5.7-billion deal for the construction, operation and maintenance of the Philippine Orthopedic Center.

It has also purchased bid documents for the P64.9-billion Light Rail Transit Line 1  Cavite Extension Project and the P2.2-billion Integrated Terminal System Southwest Terminal Project.

The airport deal involves the construction of a new passenger terminal, renovation of existing terminal, operation and maintenance of both the new and the existing passenger terminals during the entire concession period, and relocation of Philippine Air Force facilities.

source:  Business Mirror