Cebu airport officials face antidummy case

MANILA, Philippines — The National Bureau of Investigation (NBI) on Friday sought the criminal indictment of an airport official and executives of a private consortium for allegedly violating the antidummy law in connection with a P14.4-billion deal to operate the international airport in Cebu.

NBI Director Eric Distor said the respondents, among them 11 foreign nationals, “conspired, connived, colluded, schemed and acted together” when they allowed foreign contractors to take over the management of the Mactan-Cebu International Airport Authority (MCIAA).

The MCIAA is the state agency tasked with supervising and operating the main airport in the Visayas region.

Distor said NBI investigators found that the airport was being operated and managed by foreigners under an arrangement that was made “with the knowledge and approval of the Filipino officers of MCIAA” and GMR Megawide Cebu Airport Corp. (GMCAC), the consortium of Megawide Construction Corp. and India-based GMR Group.

Megawide said all its dealings were legal and expressed confidence of being cleared of wrongdoing in any court case.

NAIA contract

The Megawide-GMR tandem is also the frontrunner in a P109-billion proposal to transform Ninoy Aquino International Airport (NAIA), the country’s main gateway, into a world-class hub.

The offer remains under evaluation by the government.

The project is among the big-ticket items under the Duterte administration’s “Build, Build, Build” program.

‘Profound control’

“Based on the evidence, the MCIA (Mactan-Cebu International Airport) is operated, administered, and managed by non-Filipinos, more particularly by an Irish, a Ghanaian and several Indians who have profound control, enjoyment and control over a Philippine public utility,” the NBI said in a complaint filed in the Department of Justice.

“Evidence submitted … and gathered by the investigators showed that the foreign nationals were actually performing executive and managerial positions,” it said.

Named respondents in the complaint were MCIAA General Manager and CEO Steve Dicdican, and GMCAC executives Manuel Louie Ferrer, Edgar Saavedra, Oliver Tan and JZ dela Cruz.

Also charged were GMCAC foreign executives Srivinas Bommidala, P. Sripathy, Vivek Singhai, Andrew Acquaah-Harrison, Ravi Bhatnagar, Ravishankar Saravu, Michael Lenane, Sudarshan MD, Kumar Gaurav, Magesh Nambiar, and Rajesh Madan.

According to Distor, the respondents did not only violate Commonwealth Act No. 108, or the antidummy law, but also the 1987 Constitution, which bars foreigners from controlling and owning public utilities such as airports.

The NBI brought a separate complaint for graft against Dicdican in the Office of the Ombudsman.

Confident

In 2014, the consortium secured a 25-year concession agreement from the national government for the development and operation of MCIA.

Besides the rehabilitation of the old airport terminal, the contract also covered the expansion and operation of MCIA, including the construction of a new passenger terminal and the installation of other facilities such as information technology equipment.

Sought for comment on Friday, Megawide pointed to a stock exchange filing two days earlier in response to a news website’s report on the NBI charges.

In the filing, Megawide said its venture with GMR infrastructure at MCIA and its other national government projects followed “all pertinent laws, rules, and regulations.”

Questioned project

“We, together with GMR, upon official receipt of correspondences, will answer such allegations and we are confident that these will not prosper in court,” Megawide told the stock exchange.

An industry source said the NBI complaint was linked to Megawide-GMR’s ongoing bid to rehabilitate and expand NAIA, whose privatization had been questioned by Rep. Jericho Nograles. The congressman had raised concerns about Megawide’s financial capacity.

The company responded by convincing GMR to take a 40-percent equity stake to comply with the government’s requirements. This was formalized through a submission to the Manila International Airport Authority on Nov. 20.

Through a proposed 25-year concession, Megawide-GMR plans to add capacity and flights to NAIA, where congestion was worsening before the arrival of the COVID-19 pandemic.

It also plans to build an elevated railway that will link NAIA’s passenger terminals to each other.