Megawide-GMR insists it can foot NAIA rehab bill as funding capacity questioned

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The Ninoy Aquino International Airport (FILE PHOTO)

Metro Manila (CNN Philippines, November 23) — Megawide Construction Corp. and its Indian partner insisted anew that they have the financial footing to take on upgrading the Ninoy Aquino International Airport after two agencies struck down their latest pitch for the project.

In a disclosure, Megawide and its partner GMR Infrastructure said they have submitted additional requirements for a "joint and solidary liability" sought by the National Economic and Development Authority, which, along with the Department of Finance, returned the group's proposal to rehabilitate the country's busiest gateway.

"The financial documents we submitted are sufficient to exclusively support the requirements of the NAIA project," Megawide managing director for transport Louie Ferrer said in a statement.

Ferrer said this should already convince the NEDA-led panel to approve their proposal and move ahead with a Swiss challenge, or a call to other contractors if they are interested to build the same project at cheaper or more favorable terms.

If no other bidders emerge, Megawide can bag the deal.

The NAIA rehabilitation plan is pegged to be worth ₱102 billion with a 15-year concession period. The country's largest conglomerates earlier formed the NAIA Consortium to take on the project, but that deal fell apart after years of talks.

Megawide-GMR came in as the new partner of the Department of Transportation in July. This is one of the government's 104 flagship infrastructure projects under the "Build, Build, Build" program.

A document seen by CNN Philippines showed that Finance Secretary Carlos Dominguez III and Acting Socioeconomic Planning Secretary Karl Kendrick Chua returned the plan of Megawide-GMR to the DOTr as the group appeared to be lacking funds to sustain the project.

In a letter dated Nov. 19, the Cabinet officials went on to explain that Megawide's ₱18 billion equity as of end-2019 was just about half the ₱32.9 billion needed to support the NAIA project.

"The financial capability of MCC is mostly hinged on uncertain sources. Most importantly, the requirement under the BOT (Build-Operate-Transfer) Law and its IRR is to establish the financial capacity at the time of submission of the proposal," the letter read, referring to Megawide's next steps of raising capital via treasury shares, preferred shares, retained earnings, and projected cash generation of the deal.

RELATED: Gov't to rehabilitate NAIA on its own if talks with PH firms break down

In a separate statement released Monday night, Megawide said the letter "merely asked for the full submission of the requirements from the Megawide-GMR consortium to demonstrate capabilities to deliver a first-world NAIA."

It added that it complied with the requirements on Nov. 20, submitting to the MIAA additional proof of capability to sustain financing requirement. Megawide, however, said it has not received any official communication from the government.

Megawide also denied a "false" news report that the proposal has been junked. It added that the incident may cause unnecessary delays and complications concerning the project. 

Megawide-GMR currently operates the Mactan-Cebu International Airport and recently completed upgrades to the Clark International Airport in Pampanga, which was the preferred contract of the economic team for NAIA.

"Now is the best time to get this project off the ground and we are ready to get to work as soon as we receive a formal notice of award," Ferrer said.

On the same day, Megawide Foundation turned over its donation of communications and disaster response equipment to the Presidential Communications Operations Office.

NAIA has grown congested without any alternative gateways to fly to Metro Manila, the country's main economic hub. President Rodrigo Duterte previously ordered the DOTr to have the Sangley airport in Cavite usable for general aviation by November in a bid to ease air traffic in Manila.

Meanwhile, San Miguel Corporation has committed to build a new international airport in Bulacan from scratch for ₱736 billion.