GMR-Megawide inks MCIA contract, pays P14.4 billion

The signed concession agreement for the Mactan Cebu International Airport is presented by (L-R/Fifth to right) Srinivas Bommidala, GMR Group Airports Sector Chairman, Usec Jose Perpertuo Lotilla, Undersecretary for Legal and Procurement of the Department of Transportation and Communication and Michael Cosiquien, Chairman and CEO of Megawide Construction Corporation. Also in photo are: (L-R, Second to Left) Louie Ferrer, Chief Marketing Officer of Megawide Construction Corporation, Puvan Sripathy, Chief Executive Officer of GMR Airports, Sridarath Kapur, Chief Financial Officer, GMR Group, , Oliver Tan, Chief Finance Officer, Megawide, Engr. Nigel Paul Villarete, General Manager, MCIAA, DOTC, Edgar Saavedra, President/Chief Operations Officer, Megawide and Usec Rene Limcaoco, Undersecretary for Planning, DOTC.

This time, the ceremony was as fast as you can say Mactan Cebu International Airport.

In contrast to the over four month-delay in the awarding of the contract to undertake the expansion of the Mactan Cebu International Airport (MCIA), the Department of Transportation and Communications took less than a month to formally award the concession agreement to the GMR-Megawide consortium, the winner of the controversial bidding for the Aquino administration’s first major Public-Private Partnership project.

To quash doubts on their capability to bankroll the project, GMR-Megawide paid P14.4 billion up front to the MCIA Authority.

Signing the deal for the government was Transportation Undersecretary Jose Perpetuo Lotilla while inking on behalf of the consortium were Srinivas Bommidala, GMR Group Airports Sector chairman and Michael Cosiquien, chairman and CEO of Megawide.

In a statement signed by Cosiquien and Bommidala, GMR-Megawide said that by making the upfront payment of P14.4 billion within the stipulated time, the consortium have clearly demonstrated their credentials and capabilities to take up this prestigious project.

The signing marked the start of the transition phase before the operation of the MCIA is formally handed over to GMR-Megawide within a period of six months.

“It is about time they start a much delayed project, most important for tourism. Am sure, DOTC did all the checking,” said former tourism undersecretary Phineas Alburo.

Cebu Business Club president Gordon Alan Joseph said the signing of the concession agreement have saved the government’s PPP program from “disaster.”

“I hope the winning consortium lives up to our expectations and need for a world class airport,” Joseph added.

Among the new features are 33 additional aircraft parking stands, which will help minimize disembarkation delays, connected international and domestic terminals for easier flight transfers, 149 additional check-in counters, and an adjoining airport village and mall complex.

The DOTC Bids and Awards Committee announced in December that the GMR-Megawide consortium submitted the best bid for the MCIA expansion followed by the Filinvest-Changi group, Filinvest-Changi questioned the qualification of GMR-Megawide, citing conflict of interest as well as its financial capacity to fund the project.

The question led to delays, investigations from both the Senate and House of Representatives.

When the DOTC announced early this year that GMR-Megawide indeed won the bidding, Sen. Serge Osmeña filed a certiorary petition Supreme Court, praying that the high court stop the implementation of the project.