Cavite cancels award for China firm’s $10 billion Sangley project

MANILA, Philippines — The province of Cavite has cancelled its award of a $10-billion airport deal in Sangley Point, among the biggest projects involving a Chinese firm under President Duterte, who has pursued warmer ties with Beijing since taking office in 2016.

China Communications Construction Co. (CCCC) and Philippine company MacroAsia Corp. won the auction in 2019 to partner with the Cavite provincial government to upgrade the Sangley airport.

“The notice of selection and award for the Sangley Point International Airport Project issued on 12 February 2020 was cancelled,” MacroAsia told the stock exchange yesterday.

Cavite Gov. Jonvic Remulla told Reuters the consortium’s documentation was “deficient in three or four items.” Its shares closed up 0.36 percent having earlier fallen as much as 19 percent over the cancellation.

China’s CCCC did not respond to a request for comment.

Remulla said the decision was not related to a US sanctioning of CCCC and other Chinese state firms in August.

The US has blacklisted numerous Chinese companies over their roles in building military installations on submerged reefs in disputed areas of the South China Sea, including one within missile range of the Philippines.

The Philippine foreign affairs secretary had recommend projects involving those firms be terminated. Duterte’s office, however, rejected that, arguing their completion was in the national interest.

The collapse of the airport deal will be a setback for Duterte, whose opponents say he has gambled with sovereignty and bet heavily on China transforming the Philippines’ outdated infrastructure with billions of dollars of investment that has largely not materialized.

Duterte, whose six-year term ends next year, has seen dozens of projects under his Build, Build, Build program delayed, cancelled or downsized.

He has been criticized for threatening to cut ties with old ally the United States while heaping praise on China’s leadership and refusing to confront it over the conduct of its navy and coast guard in the South China Sea.

His spokesman, Harry Roque, declined to comment on the airport deal or the President’s China policy.

The Sangley airport was one of two multibillion airport projects intended to take pressure off Manila airport.

Remulla said in a Facebook post that Cavite would start new negotiations for a private sector partner.

Chinese foreign ministry spokesman Zhao Lijian was not aware of the issue but said the government supported legal operations of Chinese firms in the Philippines.

“We hope the Philippines can provide a conducive business environment for Chinese companies,” he said.

NAIA consortium to the rescue?

Meanwhile, a superteam of conglomerates – the so-called NAIA consortium that previously bid to rehabilitate Ninoy Aquino International Airport (NAIA) – could reunite to take a shot at the Sangley airport project.

“We will consult with the other members of the consortium... the original NAIA consortium,” AC Infrastructure Holdings Corp. president and CEO Jose Rene Almendras told The STAR when asked if the Ayala Group would want to take a crack at the now stalled airport project.

Aside from AC Infrastructure, members of the consortium include Aboitiz InfraCapital Inc., Alliance Global Group Inc., Asia’s Emerging Dragon Corp., Filinvest Development Corp., JG Summit Holdings Inc. and Metro Pacific Investments Corp. (MPIC).

For his part, MPIC chairman Manuel V. Pangilinan said the SPIA project “looks interesting.” MPIC purchased bid documents for the Sangley project, but did not submit an actual bid.

“We don’t know enough about the project – the little we know we’ve gleaned from media accounts. But it looks interesting – not least because the airport connects to our southern tollways,” Pangilinan told The STAR.

Aboitiz InfraCapital president and CEO Cosette Canilao said the company is open to explore opportunities in the airport sector. “We have always believed that airports will be key to reviving the economy, and we remain open to look at opportunities in the sector,” she said.

Meanwhile, Megawide Construction Corp. said it has not thought about the SPIA project yet. “We can’t say at this point. We’ll have to assess the terms first. But right now, we’ll focus on other existing projects,” Megawide chief business development officer Jim Feliciano told The STAR.

In December 2019, sole bidder CCCC-MacroAsia consortium bagged the $10-billion project to upgrade Sangley airport. The consortium was previously given three extensions by the Cavite provincial government yet failed to complete post-qualification requirements.