When I accepted an invitation, coursed through this paper’s publisher, from Filinvest Development Corp. for a media briefing, I thought Filinvest would issue updates about its bid to disqualify GMR-Megawide in the Mactan-Cebu International Airport project.
There has been a lot of noise in the media after the Bangalore-based GMR Group and its Filipino partner Megawide bagged the airport project with its offer of P14.4 billion on top of the project cost. Filinvest, which partnered with Changi Airport Group came in second with a tender of P13.999 billion.
The megabuck venture calls for the development and management of the Mactan airport for 25 years and is decidedly one of the biggest public-private partnership projects being undertaken by the Aquino administration.
The airport facility is currently groaning under the weight of 6.7 million passenger arrivals in recent years, or 2.2 million more than its intended capacity of 4.5 million.
The stakes are galactic in terms of making Cebu an investment and tourism hub. Because the project defines control of the airport, politics is also in the equation.
Reports say the project is set to be awarded to GMR-Megawide at the end of the month when the Department of Transportation and Communications shall have completed its post-bidding evaluation process, mainly on the issues raised by Sen. Sergio “Serge” Osmeña III against the GMR-Megawide consortium.
Conflict of interest issues, and questions on their financial position as well as a cancelled project to its name, are being hurled at the winning bidder.
Top Filinvest officials were on hand to welcome the CDN group at the Quest Hotel last Wednesday but contrary to my expectation, Tristan Las Marias, Eleuterio Coronel, Joy Pollosos and James Montenegro did not refer to the controversial airport project.
Instead, they gave us a virtual walk-through of the businesses of Filinvest which is owned by the Cebuano Gotianun family.
Filinvest is into real estate development, infrastructure, banking, power generation, hospitality industry through management of hotels and upscale residences. Mr. Coronel told us the investment tote for Cebu is in the vicinity of P50 billion. In the Mactan airport development and management project, the Changi Airport Group is supposed to match Fiilinvest’s credentials.
The conversation over lunch was tweaked by CDN publisher Eileen Mangubat’s question about how Filinvest is rolling out its mandated 20 percent spending for socialized housing, a legal requirement for real estate projects. Filinvest executives talked about Corporate Social Responsibility (CSR) in a simplified way and I’m happy to note the interface with CDN urged Filinvest to commit itself to make CSR not just a social obligation but a key business element.
Without directly answering my question about issues surrounding the Mactan-Cebu Airport project, Filinvest, by giving us an overview of its business, stated in clear terms that it is a major and reliable partner in nation building. “We’re here in Cebu for the long haul,” said Coronel, the COO.
The following day, it was the turn of GMR-Megawide to meet the press at the Marriott Hotel.
The video presentation of GMR’s exposure in the fields of construction, development, operation and management of airports in Singapore, Turkey and especially in New Delhi and
Hyderabad in India had already started when I stepped into the function room. The video presented GMR as a global leader that works best using the PPP model.
GMR’s flagship project is the primary airport of India’s capital, New Delhi. The Indira Ghandi International Airport sits on 2,500 hectares of land, and with a capacity of 46 million passengers, it is one of the most modern and busiest airports in the world. IGIA has gained numerous awards from industry-based groups. The airport is noted for using Airport Collaborative Decision Making, a system developed by GMR to curb delays in landing and take-offs.
IGIA was previously managed by India’s Air Force until it was passed on to an agency similar to our Civil Aviation Authority. Perhaps aware that state bureaucracy is the single biggest hindrance in the development of aviation and related businesses, the Airports Authority of India passed on the management of the premier public airport to the Delhi International
Airport Limited, a joint venture led by the GMR Group.
Without returning tit for tat on Senator Osmeña’s accusations, GMR-Megawide through Andrew Harrison amply stated its financial and technical capability gained over the last ten years.
But just so the local media will be guided, Mr. Harrison amplified the consortium’s rebuttals in a separate presentation which was well-organized and sharp.
If GMR is perturbed that the congressional inquiry into the bidding of the Mactan Airport Terminal 3 could scuttle the project, it certainly did not show in the composure of Mr. Harrison.
This is not GMR’s first run-in with politicians. In 2010, GMR was about to develop the airport in Male, capital of Maldives when the $510 million contract was cancelled owing to what we call, “weather-weather” politics.
GMR brought the issue before a court in Singapore which ruled in favor of the Maldivian government. The issue had GMR criticizing Male for sending the wrong signals to foreign investors.
The impasse was finally settled out of court with the Indian company getting back its investments.
The Male airport is still a highlight in GMR’s journey in the sense that even an industry giant can’t win them all. On a positive note, India continues to have good relations with its neighbor.
GMR has not yet reached the level of criticizing the PH government for “sending the wrong signals to foreign investors,” and I think it stems from a confidence that after submitting to the legal process, it will eventually secure the project.
If this comes to pass, I am all for the idea of an infrastructure giant and industry leader giving Cebu a global airport with all the hi-tech trimmings on top of a tropical design.