Filinvest wants top Cebu airport bidder disqualified
Megawide Construction says Filinvest Group's allegations are meant to influence the bidding process – itself a violation of bidding rules

TO BE DISQUALIFIED? Filinvest accuses Megawide of violating bidding rules. Photo courtesy of the PPP Center

MANILA, Philippines – The second-highest bidder for the Mactan-Cebu International Airport expansion is asking the Department of Transportation and Communications (DOTC) to disqualify the top bidder for alleged conflict of interest.

The Filinvest Group-Changi Airports (CAI) partnership, which submitted the second highest bid, said partners Megawide Construction Corporation and GMR Infrastructure of India, as well as the First Philippine Airports Consortium and the Malaysia Airports Holdings Berhad (MAHB) violated bidding rules because they have interlocking interests.

Disqualifying them from bidding for the big-ticket project will preserve the integrity of the bidding process for Public-Private Partnership (PPP) projects, said Filinvest Development Corporation president and chief executive officer Josephine Gotianun Yap.

“We are confident that the Philippine Government will preserve the sanctity of the bidding rules since other potential PPP bidders and the local and global business community is keenly monitoring how the bidding process and rules are implemented and managed,” Yap said in a letter dated January 2.

The P17.5-billion Mactan-Cebu International Airport project is the first airport deal to be bid out under the PPP program.

The Megawide-GMR Infrastructure partnership was poised to win the project after offering a P14.4-billion premium bid, the best offer among bids submitted by 7 firms last December.

The Filinvest and its partner CAI Consortium submitted the next highest offer of P13.999 billion.

Filinvest pointed out, however, that GMR and Malaysia Airports are or were partners in all of GMR’s airport affiliates – a violation of Article 5.6 of the bidding rules.

The managing director of MAHB sits as a director in all 4 GMR airports, namely Delhi International Airport Private Ltd., GMR Hyderabad International Airport Ltd., Istanbul Sabiha Gokcen International Airport Group, and GMR Male International Airport (Maldives).

“One of the conflict of interest provisions prohibits a board member or partner of a bidder, consortium member, or its affiliates from being directly involved in any capacity in the MCIA bid process for another bidder, consortium member, or its affiliates,” Yap stated in the letter.

The two firms can be disqualified from the race should it be proven that they violated bidding rules, despite offering the highest bid.

“The conflict of interest rules apply even to previous board members and partners within two years prior to the publication of the Invitation to Pre-Qualify and Bid for the MCIA Project and also to future board members and partners within one year after award of the Project,” Yap explained.

The Filinvest Group is asking DOTC to ensure that the bidding rules and its implementing rules and regulations during the pre- and post-qualification review are strictly adhered to. 

“We participated in the MCIA bid because we had trust and confidence in the process and the fairness of the DOTC/MCIAA committee spearheading the bid. We have high regard that the PBAC (prequalification bids and awards committee) will continue to show the same fairness and level playing field in the post-qualification stage of the bidding process,” Yap said. 

False allegations

For its part, the Megawide and GMR consortium in a statement said the petition of the Filinvest Group “is yet another attempt by the Filinvest-CAI consortium to exert undue influence on PBAC and seek our disqualification after we emerged as the highest bidder for the Mactan-Cebu Airport project.”

The firm claimed that the new allegations of conflict of interest is the second attempt of the Filinvest consortium to have Megawide and GMR disqualified from the race as it earlier raised the issue of whether GMR is capable of undertaking the project.

“Having failed in their previous attempt to achieve our disqualification, Filinvest-CAI consortium is now exhibiting a trend of raising one irrelevant issue after another in their pursuit of the Mactan-Cebu Airport project in the pre-award verification stage and thereby undermining the bid rules laid out for all bidders,” the consortium said.

The group also denied that there is conflict of interest between Megawide-GMR consortium and the First Philippine Airports Consortium.

“The bidding entity representing GMR in our consortium is GMR Infrastructure and Tansri Bashir of MAHB has no role to play in the bid since he is not a member of the board of directors of GMR Infrastructure. Moreover, the presence of Tansri Bashir on the boards of our 4 airport subsidiaries is not in violation of any of the PBAC rules governing the bid process,” the firm added.

Megawide also stressed that the allegations made by the Filinvest camp are only intended to influence the outcome of the bidding process – itself a violation of the bidding rules.

“These are mischievous in nature, are clearly aimed at unduly influencing the outcome of the bidding process and pre-empting the post-qualification process being conducted by DOTC at present. It is our belief that these actions are a clear violation of Section 11.c of the Instructions to Bidders,” the statement read.

The DOTC’s PBAC is presently conducting a review of the information disclosed concernning the Megawide-GMR consortium. 

Transportation Secretary Joseph Emilio Abaya has said that his department is already reviewing the issues raised.

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