MANILA, Philippines - Two of the country's biggest business groups have formed an exclusive and strategic alliance to pursue the P10 billion Mactan-Cebu International Airport passenger terminal project.
Ayala Corp. and Aboitiz Equity Ventures (AEV) announced on Monday, September 10, that they are pursuing the airport facility that will be auctioned off under the Aquino administration's public-private partnership (PPP) scheme.
This is the second strategic partnership for Ayala Corp., which has previously forged a joint venture with another conglomerate, Metro Pacific Investments Corp. (MPIC) for rail projects under the PPP.
Interestingly, MPIC chair Manuel V. Pangilinan has earlier said they are interested to also bid for the Mactan-Cebu airport facility, the second busiest and largest international gateway to the Philippines.
In a joint statement, Ayala and AEV said they have signed a memorandum of agreement to form a 50-50 joint venture firm that would serve as the corporate vehicle for the Mactan-Cebu infrastructure bidding.
The auction and development of the Mactan-Cebu facility is estimated to cost P10 billion.
“Both groups strongly believe in the potential of the Mactan Airport to be a compelling gateway to the country for international passengers and to the Visayas for the growing domestic travelers,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.
"We look forward to leveraging each other's strengths in developing and running a modern airport facility that Cebu and our country can be proud of…We cannot thing of a better partner for this project than the Aboitiz group," he added.
“We are equally excited about this partnership with Ayala, especially as it is for a project that gives AEV the opportunity to enter into a strategic new segment that is crucial to developing both the country’s transportation infrastructure as well as its tourism potential,” AEV President and Chief Executive Officer Erramon Aboitiz said.
"It allows us to harness the Aboitiz Group's competencies in construction, logistics, utilities and real estate development and management…The fact that the project is in Cebu, which is home to the Aboitiz Group, gives it more special meaning to us," Aboitiz added.
Something in common
Both the Ayalas and Aboitizes have Spanish roots.
Unlike the Ayalas, who are behind the development of Makati business district, the country's financial capital, the Aboitiz group's power base has largely been based in Cebu, a major commercial and political area in the Visayas region.
The Aboitiz wealth was spawned from shipping business, which the group eventually sold so it could focus on its stakes in the power industry. AEV is one of the biggest private players in the country's power industry with power plants providing supply to the major grids and to the state-owned National Power Corp.
Both conglomerates are also engaged in banking, power, real estate, and retail. Their principals -- Jaime Zobel de Ayala and Jon Ramon Aboitiz -- are among the country's richest.
AEV officials have recently said they are interested in expanding into other businesses, including airport operations, by participating in bidding for PPP projects.
Ayala won the bid for the Aquino government's first PPP project -- the 4-kilometer Daang Hari-SLEx toll road -- in December 2011.
The government is expected to announce the bidding for the Mactan airport project before the end of the year, the statement also showed.
“Both parties will enter into a definitive agreement once the bid rules or the terms of reference for the project have been finalized and published by the government and will likewise explore partnerships with experienced global airport operators to complete its consortium,” the joint statement said.
The Mactan Airport is operating at over-capacity with passenger volumes exceeding 5 million every year. It is one of the airports where an open-skies regime is in place. The deregulated environment in Cebu is meant to encourage foreign airlines to mount more flights and bring passengers to the area.
The redevelopment of the congested airport will require the construction of a new international passenger terminal.
Both will "eventually explore partnerships with experienced global airport operators" to complete their consortium, the statement said. - Rappler.com