The Supreme Court was asked by a non-profit group to stop the Mactan-Cebu International Airport (MCIA) takeover by the GMR-Megawide consortium.
The Business for Progress Movement (BPM), a group advocating the development of small and medium-scale industries, urged the Supreme Court on November 3 to issue a temporary restraining order or writ of preliminary injunction on the turnover, claiming the consortium “has no financial capacity to undertake the rehabilitation and expansion of the MCIA.”
On November 1, GMR-Megawide formally took over the operation and maintenance [O&M] of the country’s second busiest airport. The Department of Transportation and Communications [DOTC] and MCIAA’s 25-year concession agreement awarded to GMR-Megawide last April entails the construction of a world-class international passenger terminal building (PTB) beginning next year and its opening by 2018. The consortium will also refurbish the existing PTB, for completion in 2019.
In an 11-page petition BPM, represented by its president, Medardo Deacosta Jr., said awarding the contract to GMR-Megawide will cause the public “great and irreparable injury” due to the consortium’s implementation of an increase in the public service charge/terminal fees meant to fund the expansion.
Moreover, BPM cited international business reports stating that Megawide’s partner, GMR Infrastructure, is allegedly debt-ridden.
“Petitioner also learned that… [GMR Infrastructure] had to raise funds through asset sale, equity issue and to divest a few road and power plants in order to pay its corporate debts,” it said.
The petitioner, citing such news reports, argued that a firm with unstable financial standing should not be allowed to undertake an important public project.
BPM also noted a report that U.S. private equity firm KKR and Co. “agreed to provide about $175 million in financing to GMR Infrastructure Ltd. in a debt equity deal.”
The group added that the cancellation of GMR’s contract with the government of Maldives for the modernization of the Male Ibrahim Nasir International Airport “had greatly affected GMR’s revenues coming from its airport business.”
“The abovementioned circumstances put in serious doubt the financial capability of [GMR-Megawide] to commence the rehabilitation and expansion project of the Mactan-Cebu International Airport,” the petition read.
BPM added that “since [GMR-Megawide] has no financial capacity to start the rehabilitation of MCIA, both [DOTC and GMR-Megawide] had come up with the scheme of imposing an increased rate of terminal fees to cover the operating costs and expansion of the project.”
Citing such reports, the group doubted that GMR-Megawide could meet the financial requirements for the MCIA’s O&M with its bid of P14.4 billion.
“There appears a clear and present danger that the instant petition… will be rendered nugatory and ineffectual, and that the highest interest of justice will not be served if act complained of—that is, the immediate turnover of the operations of MCIA to GMR-Megawide would not be enjoined,” the petition said.
Earlier, Transport Secretary Joseph Emilio Abaya said immediate enhancements at MCIA can be expected within the next three months with the turnover.
Initial improvements will be to equip the immigration section with passport readers and computers and relocate it to a larger area. This will shorten queuing time and maximize use of airport space, as MCIA’s annual passenger count is expected to increase from the current 4.5 million to 12.5 million in 2018.
To provide a more pleasant, comfortable riding experience to the public, basic interior design enhancements will be carried out, including importing new seats for the waiting areas and rehabilitating comfort rooms. In addition, an air-conditioned room will be constructed at the arrival area to accommodate greeters and well-wishers.
MCIA’s IT system will likewise be upgraded to allow systems integration of the screening areas and check-in counters to further expedite passenger processing.
Photo from www.mciaa.gov.ph
