Poe hits double standard between Megawide, Dito on equity and project contracts

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Metro Manila (CNN Philippines, December 18) — Senator Grace Poe pointed out a double standard on the selection process for private firms taking on the government's infrastructure projects, finding fault in the sudden removal of Megawide Construction Corp. from the planned upgrade of the Ninoy Aquino International Airport.

Poe, who led the Thursday Senate inquiry regarding yet another delay in the NAIA rehabilitation project, found fault in the decision of the Manila International Airport Authority to drop Megawide's original proponent status at the first sign of trouble.

It was revealed that MIAA voted to strip Megawide's preferential status after the National Economic and Development Authority raised questions about the company's ability to fund the ₱109-billion plan, as it did not have the 30% equity component to foot the project.

Chua and Finance Secretary Carlos Dominguez III returned the plan of Megawide-GMR to the DOTr in November, saying Megawide's ₱18 billion equity as of end-2019 was just about half the ₱32.9 billion needed to support the NAIA rehabilitation plan.

TIMELINE: The NAIA rehabilitation project

Megawide officials told lawmakers that they submitted additional documents on November 20 and December 1 to prove they have the money. Jaime Feliciano, the company's chief business development officer, said questions on the equity component of the project only need to be clarified.

The Filipino firm led by Filipino businessman Edgar Saavedra said it only needs to have ₱19.58 billion as show money, or 60% of the equity component, while the remaining 40% will be funded by its Indian partner GMR Infrastructure. Feliciano said the money is available, combining ₱18 billion from its end-2019 available equity while the remaining was raised through a share sale this year.

"As we’ve seen in Dito (Telecommunity), their project cost is ₱250 billion and the equity of Dito is only ₱20 billion but the government is allowing it. So it seems very selective –– too stringent for one and too elastic for another one. The senators are just furious," Poe told CNN Philippines' The Source.

READ: Dito pushes back market rollout to March 2021

"Obviously, if Megawide did not make the cut and they violated the terms of agreement for an original proponent status, then definitely, disqualify them but please explain to us. From what we are seeing, it’s not very clear."

Megawide was granted OPS in July to replace the "super consortium" of the seven biggest conglomerates in the country, only to lose it five months later.

"There are a few companies that have a proven track record when it comes to operating and building airports. They have proven themselves in Mactan, the world-class airport that they built, seamless operations is exhibit A of what they can do," Poe said about Megawide.

"If they are so bad, why did the govenrment get them again for the rehabilitation and expansion of the terminal in Clark. They have the capability, at least give them a chance," she added.

READ: New Clark Airport passenger terminal completed – DOTr

Poe said equity is merely an issue of interpretation that could be easily resolved.

Two firms, including San Miguel Corporation, have filed their own proposals to operate and maintain the country's busiest airport. 

SMC, however, clarified Friday that it only seeks to bag an operation and maintenance contract for NAIA, which is starkly different from Megawide's proposal.

“Unlike all the proposals that required a share in the revenues of the NAIA –– including passenger fees and lease rentals –– we are not interested in the revenues. We want to improve NAIA for the passengers," SMC president and chief operating officer Ramon Ang said in a statement.

"We want it to be run more efficiently, for service levels to be improved, until the new airport is operational. All revenues will go to MIAA."