MANILA, Philippines — The Philippine Competition Commission (PCC) has cleared a proposed joint venture for the construction of the $11-billion Sangley Point International Airport (SPIA) after it ruled that the partnership would not diminish market competition.
The PCC said the proposed partnership between the Cavite provincial government and the private consortium for the development of the SPIA would “unlikely” result in a substantial lessening, restriction, or prevention of competition in the relevant market.
The private consortium was formed by Cavitex Holdings Inc. and House of Investments Inc.
The public-private partnership (PPP) project will develop, own, operate, manage and maintain the SPIA in Cavite City, which is intended to alleviate congestion at the Ninoy Aquino International Airport, according to the PCC.
The competition commission’s decision on the joint venture revolved around three key points: competition in the construction services market, the relationship between the parties as major players in the market and the possibility of overlapping businesses.
The PCC said competition in the construction services remains robust due to the presence of numerous qualified contractors in the construction services market.
“Should the parties themselves decide to limit competition, consumers will still have the ability to explore other options in the market due to the numerous available choices,” the commission said in a statement yesterday.
The PCC also ruled that the companies involved in the project do not have overlapping businesses and interests.
Furthermore, the presence of numerous companies would sustain competition in the domestic construction market.
“The Commission noted that even if the companies involved wanted to limit their suppliers’ options, they would not have enough market power to do so,” it said.
“Additionally, the presence of strong competitors like Megawide Construction Corp. and Makati Development Corp. helps to prevent any unfair competitive practices by the joint venture,” it added.
Furthermore, the commission decided that the companies involved in the project do not have enough market power to block other companies from getting what they need or finding customers. The PCC noted that the House of Investments owns a majority stake in EEI Corp., a major construction company in the country.
“Additionally, having Samsung C&T Corp. as the main contractor for the airport project helps ensure fair competition,” it said.