Megawide submits formal appeal for revoked preferential status on NAIA rehab project before MIAA, DOTr

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The proposed design of the Ninoy Aquino International Airport is inspired by the Banaue Rice Terraces (FILE PHOTO)

Metro Manila (CNN Philippines, December 21) — Megawide Construction Corporation on Monday filed a formal appeal to reinstate its preferential status on the plan to rehabilitate the Ninoy Aquino International Airport.

Megawide Chief Branding and Corporate Affairs Officer Manuel Louie Ferrer confirmed the filing of the motion for reconsideration before the Manila International Airport Authority and the Department of Transportation on Monday morning, a week after the regulator voted to strip Megawide and its Indian partner GMR Infrastructure of its original proponent status for the ₱109-billion project.

The NAIA rehabilitation is a long-delayed initiative as the government struggles to find a private partner that would agree to its conditions to repair, upgrade, and maintain the country's biggest and busiest gateway.

​During a Senate hearing last week, DOTr Secretary Arthur Tugade said the MIAA board voted to remove Megawide's first dibs status for the airport rehabilitation based on a November 19 letter from the National Economic and Development Authority that questioned the listed firm's financial position.

In November, Socioeconomic Planning Secretary Karl Kendrick Chua and Finance Secretary Carlos Dominguez III returned the plan of Megawide-GMR to the DOTr as the group appeared to be lacking funds to sustain the project, saying Megawide's ₱18 billion equity as of end-2019 was just about half the ₱32.6 billion needed to support the NAIA rehabilitation plan. Company officials argued during the Senate hearing that there was a difference in interpreting the 30% equity requirement.

READ: NEDA chief denies role in stripping Megawide of NAIA rehab project

Megawide said it only needs to foot 60% or ₱19.58 billion, while the remaining 40% will be funded by its foreign partner GMR.

CNN Philippines saw a copy of the letter of appeal submitted by Megawide-GMR to the regulators, where they argued that the MIAA's December 15 decision to remove them from the project "was based on an incomplete set of facts/documents."

"As a result, the decision should be reconsidered in light of new and material information addressing the very issue raised prompting MIAA’s decision," the firms added, saying they submitted additional documents between Nov. 20 and December 1 proving their financial capacity.

According to the submissions, Megawide showed that it has the ₱19.58 billion it needs for the equity, matched by an additional ₱13.05 billion from GMR. The remaining ₱76.13 billion will be funded through loans, with a financing facility on standby to release the funds once the project is cleared for rollout.

The private contractors also appealed for "equal treatment," pointing out that the first proponents – the NAIA consortium – was given two years of discussions. Megawide lost its original proponent status or OPS just five months after it was given that position.

"It was our interpretation coming from our Mactan experience as well as our past bid qualification experiences like the regional airport bid, etc. which also passed thru NEDA ICC (Investment Coordination Committee)," Ferrer told CNN Philippines when asked about the points raised in the company's letter of appeal.

"But to fast-track approval, we complied to their requirement and submitted additional documents the day after they sent the letter to DOTr," he added.

​The Megawide letter also revealed that the company only learned about the reasons of the MIAA in revoking the OPS during the Senate hearing, as the December 15 letter they received did not state any of the grounds for the removal of the preferential status.

Should Megawide win back the OPS, it would still need to go through NEDA Board approval and a Swiss challenge, where other companies are invited to submit more competitive proposals. If accepted, Megawide's pitch will grant them the right to operate NAIA for 25 years.

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​Megawide will take on the rehabilitation and operations of NAIA terminals 1-3, with the first phase involving the overhaul of terminal 1 with a design inspired by the Banaue Rice Terraces. 

Two other companies have submitted their own bids regarding NAIA. San Miguel Corporation said it wants to operate and maintain NAIA for just 10 years, but will not take on redesigns as planned by Megawide-GMR.

The conglomerate is also building the ₱740-billion New Manila International Airport in Bulacan.

Philippine Airport Ground Support Solutions, Inc., which currently runs ground handling services at the airport, also submitted its own NAIA proposal.

Megawide previously upgraded and is currently operating the Mactan Cebu International Airport as well as the Clark International Airport in Pampanga. Tugade said last week that there's still time for Megawide-GMR to ask for reconsideration.

TIMELINE: The NAIA rehabilitation project