Group of Businessmen Petition SC to Stop MCIA Turnover to Private Firm

A business group calls on the Supreme Court to stop the Department of Transportation and Communication (DOTC) from turning over operations and maintenance of the Mactan-Cebu International Airport (MCIA) to a private company. The group said the turn-over might cause an increase in passenger service charges and terminal fees.

In a petition for injunction, the Business for Progress Movement, through its president Medardo Deacosta, said the project should not be awarded to GMR-Megawide Cebu Aiport Corp because the company has “no financial capacity to push the expansion project and take over its operations.”

The group even cited several reports that said GMR Infrastructure was “debt ridden” and had to resort to selling some of its assets and divesting some of its power plants to raise funds and pay off its corporate debts, GMA News Online reported. The traders’ group sought the issuance of a temporary restraining order (TRO) or a preliminary injunction against the turnover held last Saturday.

GMR-Megawide was the winning bidder in the 25-year concession deal for the private-public partnership project to rehabilitate and expand the MCIA. Report said the firm, a partnership between Megawide Construction Corp. and GMR of Bangalore, India, won the deal last Dec. 12 by bidding P14.404 billion for the public-private partnership undertaking.

It bested other investors led by SM Group, Ayala Corp., San Miguel Corp., JG Summit Holdings Inc., and Metro Pacific Investments Corp.

The multibillion-peso project includes the construction of a new passenger terminal starting January 2015 and ending in January 2018, as well as the renovation and expansion of the present terminal which is expected to be carried out from January 2018 to January 2019. The new terminal will have a capacity of 8 million passengers a year.

“With all the information… as to the financial capacity of private respondent, petitioners cannot help but question if indeed, private respondent met the financial requirements as the successful bidder of the project,” read the petition.

In the petition, the group highlighted the requirements found in the “Instructions to Prospective Bidders” earlier issued by the DOTC, such as:

1) the bidder must have a net worth of P2 or its equivalent, and a set-aside deposit of the same amount.
2) a letter testimonial from a domestic universal/commercial bank or an international bank with a subsidiary branch in the Philippines or any international bank recognized by the Bangko Sentral ng Pilipinas attesting that the bidder has good financial standing.

The petitioning group described itself as an organization of businessmen and executives advocating medium and small-scale industries and the promotion of business and commerce industry in general.

The petitioner also cited a newspaper report that the MCIA last October approved the increase of terminal fees at the airport starting November 1 – the same date of the turnover – to help fund the expansion project and cover increasing operating cost, report said.

From P200, the terminal fee for domestic passengers would have gone up by P220 starting last Saturday. The fee would eventually further go up to P300 starting January 2016. As for foreign passengers, the terminal would have gone up from P550 to P750, report said.

“It is important to stress that the public respondent already awarded the contract to private respondent GMR-Megawide, and yet the public is being made to suffer additional cost for the terminal fees,” read the petition.

Source: GMA News Online

Image Credit: www.rappler.com