CONFLICT of interest issues have been raised against a bidder of the Puerto Princesa Airport Development project.
Ozamis City lawyer Bryan Bantillan wrote the Department of Transportation and Communications (DOTC) alleging “highly irregular acts of some DOTC personnel involved in the evaluation of the Technical and Financial Bids for the project.”
Bantillan’s letter to DOTC, copies of which were made available to airport reporters, alleged that one of the bidders, Kumho Industrial Co. Ltd., had ties with Incheon International Airport Corporation (IIAC) which was hired by the DOTC as consultant of the project.
Previously, Bantillan wrote in the pre-qualification notice dated May 2013, that IIAC, as lead partner of Kumho, “has fulfilled legal, technical and financial qualifications for the Mactan-Cebu International Airport expansion project, costing P17.5 billion.”
The DOTC hired the IIAC to prepare the tender documents and assist in evaluating technical proposals from the bidders including construction supervision after awarding. To guarantee fair bidding process, the consultant should not be connected with any of the bidders especially any prior consortium relation or partnership.
Hanjin Heavy Industries and Construction Co., and Kumho Industrial Co. are the two South Korean companies bidding for PPADP as civil works contractors.
South Korea is providing the loan for the project hence it is a tied loan that could only be participated in by Korean companies.
The Civil Aviation Authority of the Philippines, which will eventually manage the PPADP, has been excluded from the technical working group.
Bantillan pointed out that the IIAC and Kumho were in a previous joint venture to construct the Mactan-Cebu International Airport, a clear case of conflict of interest since Incheon could favor Kumho in the PPADP bidding.
He alleged that it is irregular for IIAC to evaluate the bid of Kumho due to their previous collaboration, and if IIAC is allowed to participate in the evaluation of the bid of Kumho, “the transparency, impartiality and neutrality of the bidding process will be seriously affected because conflict of interest is quite apparent.”
The bid evaluation consists of 70 percent technical and 30 percent financial proposal.
“In order to avoid any allegation of partiality, conflict of interest or collusion, it is respectfully recommended that the Bids and Awards Committee (BAC), prior to the negotiation with the lowest calculated bidder, be advised of Item 4.3, Sec. 1 of the instructions to bidders: ‘A bidder shall not have conflict of interest, all those found to have conflict of interest shall be disqualified,’” as per DOTC legal opinion.
During the opening of the bid last December 12, BAC Chairman Jose Perpetuo Lotilla, had told the bidders that the claim of conflict of interest should be resolved before entering the awarding procedure.
Bantillan said that Korean Export and Import Bank, which is providing the loan, received on December 20, 2013, a request for concurrence without coursing it through the BAC.
He said in order to guarantee transparency and fairness “DOTC should issue a legal opinion, clarifying conflict of interest as soon as possible. That is the only way that further delay could be avoided.”