SC asked: Void GMR-Megawide consortium’s Mactan airport contract

MANILA, Philippines – Senator Serge Osmeña has asked the Supreme Court (SC) to restrain the contract for expansion of the Mactan Cebu International Airport (MCIA) awarded to the GMR-Megawide consortium. It is a project that seeks to modernize the country’s second busiest aviation hub.

The senator filed a 31-page petition before the High Court on Thursday, April 3, to have the consortium of Filipino-owned Megawide Construction Corporation and Indian developer GMR Airports be disqualified as bidder in the airport expansion project.

Osmeña’s petition – filed a day prior to the announcement of the Department of Transportation and Communications (DOTC) that the public private partnership (PPP) project had been awarded to the GMR-Megawide consortium – in effect appealed for the nullification of the awarded contract.

An earlier disqualification case filed before the DOTC by the second highest contract bidder on the project, the Filinvest Group-Changi Airports (CAI) consortium, was dismissed. The case cited the same interlocking interests as basis for disqualification.

In his petition, Osmeña also raised consortium member GMR’s questionable “operating commercial viability.” The Indian airport developer tied up with local company Megawide Construction Corporation specifically to bid for the expansion of MCIA. 

“…GMR Infra reported operating losses over the recent past three (3) years,” Osmeña said, also emphasizing the consortium member’s “tendency to exploit the helpless public with unpermitted charges and fees.”

Osmeña said the “same Consortium has gained notoriety for unauthorized charging fees in New Delhi and the Maldives, and have been publicly sanctioned for these by the corresponding governments.”

One of the largest PPP projects in the country today, the MCIA’s modernization includes the construction of a new international passenger terminal building and expansion of the airport’s existing passenger terminal.

The modernization cost is pegged at P17.5 billion.

Osmeña earlier delivered a privilege speech revealing the ties of GMR with Frankfurt Airport Services Worldwide (Fraport), the operator partner and majority beneficial owner of consortium Philippine International Air Terminals Company Incorporated (Piatco).

“The Filipino people, especially the Cebuanos, do not deserve another Piatco. Perhaps more importantly, they do not need to have to be serviced by an operator with a derogatory track record and a recent history of financial operating losses,” the senator, also a Cebuano, said in his petition.

More than a decade ago, Piatco was involved in a separate airport construction project – the building of the Ninoy Aquino International Airport (NAIA) Terminal 3.

Piatco’s notorious contract – later on nullified by the SC – was mired in allegations of corruption and amendments deemed disadvantageous for the economy. 

Osmeña decided to bring to the High Court the fight to disqualify the GMR-Megawide consortium from the project, saying the SC had ruled favorably in the past to keep the integrity of the bidding process.

“…this Honorable Court exercised its solemn constitutional duty when it nullified the franchise awarded” to Piatco “for the operation of” NAIA 3, the senator’s petition read.

But DOTC Secretary Joseph Emilio Abaya defended the awarding of the contract by the Bids and Awards Committee (BAC) to the GMR-Megawide consortium.

“There are processes: the BAC should decide, MCIA Board should approve, the Secretary should approve, then we award. I think all these issues the BAC has addressed, really carefully addressing all issues,” he said.

Abaya added, however, that he respects “anyone’s right to go up to court and raise certain issues.” – Rappler.com