Sunday, July 12, 2020

Megawide-GMR cements position as PH’s preferred airport developer

The partnership of Megawide Construction Corp. and India-based GMR Infrastructure Ltd. is apparently in line to win the coveted Ninoy Aquino International Airport (NAIA) rehabilitation project, after the bid of the “super consortium” of “conglomerates that are not San Miguel” fell apart this week.
The consortium of Ayala’s AC Infrastructure Holdings, Aboitiz InfraCapital Inc., Andrew Tan’s Alliance Global Group Inc., Lucio Tan’s Asia’s Emerging Dragon Corp., Gotianun’s Filinvest Development Corp., Gokongwei’s JG Summit Holdings Inc. and Metro Pacific Investments Corp. (MPIC) had been given original proponent status in September 2018 for an unsolicited P350-billion, 30-year concession for the NAIA project they submitted in February 2018 as a foil to San Miguel Corp.’s giant Bulacan airport project.
Wrangling among the partners and the government caused MPIC to bail out — presciently, as it turned out — in March this year, whittling the project down to a P150-billion, 15-year deal. This eventually fizzled out as well, with the consortium members explaining in separate disclosures on Tuesday that the government had rejected proposed changes that would “ensure the bankability of the NAIA project” in light of the near-destruction of the air travel industry, thanks to the coronavirus pandemic.
What the snubbed changes were, exactly, have not been disclosed by anyone involved, but reasonably credible conjecture from the grapevine is that the deal fell apart on the consortium’s demand for a better sovereign guarantee than what the government was offering.
The Department of Transportation (DoTr) had wanted to apply the same compensation provisions for “material adverse government action” — for example, an extended shutdown due to a pandemic — as those written into the Clark International Airport’s operations and maintenance concession contract. This apparently was not good enough for the consortium, and so the deal has gone into the bin. There has been a bit of disagreement over who blinked first — the DoTr has confirmed that the consortium withdrew its bid, and that the government had stripped it of its original proponent status — but at this point it hardly matters.
12/07/20 Ben Kritz/Manila Times
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