P14.4 B SAFE IN LAPU BANK

By: Marites Villamor Ilano, Victor Anthony V. Silva June 23,2015 - 12:22 AM

Will Mactan airport board make sure funds stay in Cebu?

Mactan-Cebu International Airport. (CDN FILE PHOTO)

Mactan-Cebu International Airport. (CDN FILE PHOTO)

The P14.4-billion premium paid last year by the winning bidder of the Mactan Airport upgrading project is still intact in a government bank in Lapu-Lapu City.

Airport general manager and chief executive officer Nigel Paul Villarete said the amount is in a “blocked account” in the name of the Mactan Cebu International Airport Authority (MCIAA).

But for how long?

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

The question of whether the money would remain in Cebu and directly benefit Cebuanos –- or be turned over to the national government was raised by former governor Emilio “Lito” Osmeña, who wrote President Aquino and invoked the issue of local autonomy because “it is uncertain that such amount would all be spent for Cebu.”

Former governor Emilio “Lito” Osmeña  says the status of the P14.4 billion payment will show whether Mactan airport board members are independent or just “puppies waiting for orders from the top” in Manila. (CDN FILE PHOTO)

Former governor Emilio “Lito” Osmeña says the status of the P14.4 billion payment will show whether Mactan airport board members are independent or just “puppies waiting for orders from the top” in Manila. (CDN FILE PHOTO)

Whether the money should stay with MCIAA and be used to finance airport improvements or be remitted in whole or part to the national treasury has been the subject of discussions in the board since last year.

Similar discussions have been made in the Senate.

The MCIAA board of directors, chaired by Transportation Secretary Joseph Emilio Abaya, has yet to issue guidelines on how the money will be spent.

“I’m just going to abide by the decision of the MCIAA board. As of now, the position of majority of the board members is that it will be kept within MCIAA,” Villarete said in a phone interview yesterday.

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In the meantime, Villarete said the board is crafting a 25-year investment program that will be funded from the premium payment. The program includes a proposed second runway to support the airport’s expansion.

BLOCKED ACCOUNT
The blocked account was opened by MCIAA on April 14, 2014 at the Lapu-Lapu branch of state-owned Land Bank of the Philippines.

A blocked account is a bank account that can only be used “in accordance with the provisions of the concession agreement” governing the airport project.

The upfront premium payment of P14,404,570,002.99 was deposited about a week later, on April 22, shortly after winning bidder GMR-Megawide consortium remitted the amount to MCIAA, Villarete said.

The 25-year concession agreement between government and GMR-Megawide was signed on April 22 last year. This came after full premium payment was made to MCIAA. The agreement provides that the full amount is deposited to the blocked account of MCIAA.

A director of MCIAA, who asked not to be named, said Cebuano representatives in the board “will do everything we can to make sure that MCIAA will benefit” from the premium.

“Of course, the Cebuano representatives are in favor of keeping the money here in Cebu. We are making sure that MCIA’s interest is protected,” the director said.

Cebu is represented in the board by Gov. Hilario P. Davide III for the government and five private sector representatives.

Aside from Villarete, other private sector representatives to the board are University of San Jose – Recoletos law school dean Jonathan Capanas, contractor Pericles Dakay, retailer Melanie Ng, and businessman Franklyn Ong.

Other members of the board are the secretaries of tourism, justice and finance and the director general of the Civil Aviation Authority of the Philippines (CAAP). Their deputies serve as alternate members.

CONFUSED

Gov.  Hilario Davide III, in a visit to Samboan town, says  Osmeña’s charge that powers of the Mactan airport board are diminished or that funds will be used by the Liberal Party for the eletion  is “without basis”. (CDN PHOTO/ LITO TECSON)

Gov. Hilario Davide III, in a visit to Samboan town, says Osmeña’s charge that powers of the Mactan airport board are diminished or that funds will be used by the Liberal Party for the eletion is “without basis”. (CDN PHOTO/ LITO TECSON)

Governor Davide, in a separate interview yesterday, said Lito Osmeña’s statements were “without legal basis” and mere speculations.

“When I read his (Osmeña’s) statement, I got so confused. I think it doesn’t have any basis. It’s just speculation,” he said.

Davide said he would provide documents next week to prove that Osmeña was wrong in saying that Cebu has been getting a meager share from the national government.

He said it is not true that Cebu is not earning from the airport.

“MCIA is earning. In fact, in the three-way concession agreement, there is a sharing of income. It is impossible that Cebu doesn’t have any. The airport is operating here,” Davide said.

In a letter he made public, Osmeña wrote to President Benigno C. Aquino III expressing his “dismay” that Aquino “stripped” the MCIAA board of autonomy by signing into law Republic Act No. 10149, the Government Owned and Controlled Corporations Governance Act.

He said the MCIAA board of directors were now like “puppies waiting for orders from the top.”

Osmena, who has declared his intention to run for governor again in 2016 to “correct mistakes”, said it was an “insult” to Cebuanos that there was uncertainty over whether the P14.4 billion payment would be spent for Cebu or not.

Osmena said he hoped that rumors that the Liberal Party was generating funds for the election this way were not true.

Governor Davide is the LP chairman in Cebu.

“The P14.4 billion is the bid price of the contract, paid by the winning bidder, which goes to the treasury of the national government,” Davide told reporters during the inauguration of a covered court in Samboan town yesterday.

“For me, it has not diminished the power of MCIAA… The purpose (of the GOCC Governance Act) is for these GOCCs to become more transparent and accountable,” he said.

The 2011 law was enacted following a series of controversies over the excessive honoraria of directors in some GOCCs.

The Mactan airport authority board and charter was created in 1990 during Osmeña’s term as Cebu governor. The bill was sponsored by then Cebu CIty Rep. Raul del Mar.

Osmeña recalled that the MCIAA Charter was approved by the late president Corazon Aquino and made the airport authority autonomous. Before that, all airports in Cebu were under centralized authority in Manila.

PPP PROJECT
The P14.404-billion premium payment, a one-time upfront payment, was the winning bid offer for the concession right to undertake the P17.52-billion MCIA upgrading project, the first public-private partnership (PPP) contract awarded by the Aquino government.

The project involves, among others, the construction of a new passenger terminal with an annual capacity of 8 million passengers and renovation of the existing terminal, a facility designed for 4.5 million but currently serves about 7 million passengers.

GMR-Megawide Cebu Airport Corp., a special purpose company created by winning bidders GMR Infrastructure of India and listed Filipino construction company Megawide Corp., took over terminal operations on Nov. 1 last year.

Renovation of the existing terminal is ongoing while construction of the new terminal is targeted to start before the end of this month.

Construction has been delayed because the MCIAA is still clearing the project site, where the Philippine Air Force base terminal stands. An agreement for PAF to gradually transfer base terminal operations to the MIP (Most Important Person) Lounge was reached only recently. Clearing started on June 2.

The new terminal, which will become the international departure and arrivals terminal, is targeted to be completed in three years, or in 2018.

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TAGS: Cebu, Hilario Davide III, Lito Osmena, Mactan airport, Mactan-Cebu International Airport (MCIA)

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