The GMR Infrastructure and Megawide Consortium submitted the highest upfront bid premium during Thursday’s opening of financial bids for the P17.5-billion Mactan-Cebu International Airport (MCIA) Project.
GMR/Megawide submitted a P14.4-billion upfront bid premium, which is the highest among the seven financial bids submitted to the Department of Transportation and Communications (DOTC).
The upfront payment is a downpayment delivered at the time a contract is signed.
“The P14.4 billion is the upfront payment, so we’ll just wait for the formal notice of award, and if I’m not mistaken, I think 20 days upon receipt of the formal notice of award we will have to deliver the P14.4 billion to the government,” said Oliver Tan, chief financial officer of Megawide.
He added that, “The concessionaire will spend, so on the top of the P14.4-billion bid premium we will pay for the government, we will still have to spent around P13 to P14 billion for the initial capex [capital expenditure].”
“No, there is no subsidy from the government,” Tan added.
The other bidders for the project are: MPIC-JGS Airport Consortium; AAA Airport Partners; Filinvest-CAI Consortium; SMC-Incheon Airport Consortium; First Philippine Airports Consortium and Premier Airport Group. According to Tan, the project will be financed through a mix of debt and equity.
“We’re looking at mixed 70- [percent]30- [percent]debt-equity,” Tan said.
The partnership structure between Megawide and GMR is 60-40. He added that, “It would be 60 percent by Megawide and 40 percent by GMR. So we put up a special purpose vehicle that would hold the concession for the 25-year build-transfer concession with the government,” Tan added.
GMR has done more than three airport projects, of which two are in India and one in Turkey.
Louie Ferrer, chief marketing officer of Megawide said that, “This is really a game changer for us, we’re known as a vertical building contractor, we’ve started doing PPP [public private partnership]projects, so this is really very important for us, its a big project, its a game changer.” The DOTC said that the notice of award will be on January 6, 2014, and January 27 the deadline of submission of post-award contracts. February 6 will be the signing of concessionaire agreement.
GMR/Megawide said that from all indications, the MCIA project will probably start toward the fourth quarter of next year.