New MIA rehab plan needed after elimination of bidder

New rehab plans are needed for the Manila International Airport. This, after the MIA Authority eliminated the bidder that wants to refit and run the gateway for 25 years.

The MIAA revoked the other week the original proponent status (OPS) of Megawide Construction Corp. It came after the administration’s top economic managers deemed Megawide’s capital and submissions deficient.

Megawide executive director Louie Ferrer confirmed the rescinding on national radio Monday. “Ang balita namin mabilis din na-revoke ‘yung OPS namin (We heard that our OPS was also swiftly revoked),” he said in a dzBB interview. Formal notice is being awaited, he added.

An OPS privileges a grantee as the sole party the government deals with for a major infrastructure work. It presupposes legal, technical and financial compliance. Contenders may pose a Swiss challenge under the Build-Operate-Transfer Law. But the OPS holder can retain the project by simply matching any superior offer.

With Megawide removed, government has two options, sources cite legal procedures. One, MIAA and its mother Dept. of Transportation can evaluate the next in line of two other unsolicited proponents to rehab and operate the aged airport. This is not obligatory; under the B-O-T Law, an agency can reject any or all unsolicited offers.

Two, revenue-rich MIAA can undertake the rehab by itself. Builders and suppliers will be selected via open public bidding. No more need to cede MIAA’s multibillion-peso annual income for decades to a private operator. No need too for five-fold increases of passenger terminal fees and other MIAA charges to recover the rehab costs. MIAA is financially equipped. It has P47 billion in assets as of end-2019, according to the Commission on Audit.

Airport stakeholders prefer the latter, insiders say. Airside, cargo and passenger facilities and services direly need upgrade. MIA is often rated among the world’s worst gateways. Flights are delayed due to no space for additional runways. Forty-five million passengers per year crowd the terminals built for only 31 million.

A super consortium of seven conglomerates initially held the OPS. It withdrew after DOTr rejected its plea for revised terms, considering low airport traffic due to pandemic. Days later DOTr endorsed Megawide under the softer terms the seven giants had sought.

The MIAA Board – voting six-zero, with three abstentions – cancelled Megawide’s OPS last Dec. 4. Resolution No. 2020-067 took back the privilege granted last July. Taped deliberations dwelt on findings of the National Economic and Development Authority-Investment Coordinating Council. With the DOTr secretary as chairman and the MIAA general manager as vice, the Board consists of reps from the Office of the President; Departments of Justice, Finance and Tourism; Civil Aviation Authority and two from the private sector.

As NEDA-ICC co-chairs, Finance Sec. Carlos Dominguez and Economic Planning Sec. Karl Chua had declared that Megawide lacked capital. Its end-2019 equity of P18 billion was short of the 30 percent, or P32.3 billion, required for its P109-billion rehab plan. Future fund sources “are speculative and not guaranteed to materialize.” Returning Megawide’s proposal Nov. 19, they told endorser DOTr Sec. Arthur Tugade to ensure completeness of future submissions.

Megawide tried to solve the issue. Indian technical consultant GMR Infrastructure Ltd. was elevated to 40-percent partner. Megawide and GMR also operate the Mactan-Cebu International Airport terminal.

Last month the NBI charged Megawide and GMR execs with dummying in the Cebu project. The airport GM was charged with graft.

That further complicated Megawide’s plan in Manila. DOTr’s policy is to shun bidders with cases against the government.

A Megawide lawyer falsely accused me last week of misrepresenting and biased reporting in my column “Lawsuit in Cebu Airport Affects Rehab in Manila,” Dec. 4, 2020. Supposedly I did not get or present their side. Yet three paragraphs were about what executive director Ferrer and chairman Edgar Saavedra stated in our Zoom meeting.

Supposedly I did not explain the Anti-Dummying Law. Yet I devoted a paragraph on it and the constitutional limit of 40 percent on foreigners in public utilities like airports.

Supposedly I did not mention the date of the DOTr policy and its accompanying press release. Yet in my sixth paragraph, I wrote: “The Memorandum of June 26, 2018 ‘no longer allows prospective bidders with pending cases against the government to participate in all [DOTr] biddings’.”

Most preposterous, the lawyer claimed they are not covered by that policy since Megawide is not a bidder but an unsolicited proponent. In the eyes of government a proposal is a bid; no amount of hairsplitting can change that. The B-O-T Law governs unsolicited proposals and proponents. In that law and its implementing rules and regulations, the words are interchanged with bid and bidder 382 times.

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