Unsolicited Proposals Find No Favor With Govt

Sangley consortium, Chelsea Logistics’ airport offers rejected

16 April 2018

Two more unsolicited airport development proposals—one of them from a businessman said to be close to President Rodrigo Duterte—have been turned down by the Transportation Department.

Along with the rejection of Aboitiz Equity Ventures’ (AEV) P148- billion bid to upgrade and run the Iloilo, Bacolod-Silay, Laguindingan and New Bohol airports, the department last month also ruled against Chelsea Logistics’ P67-billion bid for the Davao and Bohol airports and the Sangley Airport Infrastructure Group’s $12-billion plan to develop an alternative to Metro Manila’s Ninoy Aquino International Airport (NAIA), documents obtained by The Manila Times show.

Chelsea, owned by Davao-based businessman Dennis Uy, was seen as having gained an advantage after the rejection of AEV’s proposal, which the holding firm disclosed last week. The Sangley consortium’s offer, meanwhile, has been viewed as going up against San Miguel Corp.’s P700-billion plan to build a NAIA alternative in Bulacan, which has already received the endorsement of the National Economic and Development Authority.

Public bidding preferred
The Transportation department, in letters dated March 27, said it was pursuing a policy of offering projects for public bidding. Chelsea Logistics and the Sangley consortium, however, were still welcome to participate once projects are rolled out.

In the letter to Sangley consortium President and CEO Wilson Tieng, Transportation Assistant Secretary Airene Robinson said that “should the government pursue the Sangley Airport Development project, it will be implemented using its own resources, thus cannot accept your unsolicited proposal.”

“In view of this, you may retrieve all the submitted documents of your proposal … Notwithstanding the above, the government reserves the right to publicly solicit bids for the develop of the Sangley International Airport and all qualified interested entities will be invited to participate and submit bids,” it added.

The Sangley Airport Infrastructure Group is a consortium formed by the Tieng-owned All-Asia Resources and Reclamation Corp. and Sy-owned Belle Corp., which aims to develop an airport in Cavite — to be named the Philippine Sangley International Airport (PSIA) – “at no cost to the government”.

The consortium, which was looking to secure a 50-year concession, had said it would build a world-class “aerotropolis” via the reclamation of about 2,500 hectares of land from Manila Bay in addition to the development of the existing Danilo Atienza Air Base in Cavite.

With regard to Chelsea Logistics’ offer, Robinson’s letter to the company’s President and CEO, Chryss Alfonsos Damuy stated that the Transportation department had “adopted a policy to competitively bid out the O&M (operation and maintenance) of airports under government jurisdiction through a concession, particularly those airports that are deemed to exhibit viability, and thus, will no longer process your unsolicited proposal.”

“In view of this, we will no longer be needing your submission of the financial and economic models of your proposal that we earlier requested in our office … Further, you may retrieve all submitted documents of your proposal,” it said.

“Notwithstanding the above, your firm may participate and submit bids in the public solicitation for the operations, maintenance, improvement and expansion of the subject airports which the government will subsequently undertake.”

Chelsea Logistics had proposed to operate and maintain all existing assets of the two airports, except of those that would remain under the control of the Civil Aviation Authority of the Philippines, while undertaking the necessary development works to meet future passenger and aircraft movements.

It said the Davao International Airport would be upgraded to handle up to 30 hourly aircraft movements with the construction of a new taxiway. The cargo terminal’s capacity would also be expanded to almost three times the current volume.

The Panglao International Airport’s cargo terminal facility, meanwhile, will be expanded by 25 percent, Chelsea Logistics said.

No to bundled projects
Speaking to reporters last week, Transportation Secretary Arthur Tugade said that he was against offering bundled projects.

“Personally, ayaw ko ho nun. Yung iba gusto. Bakit ayaw? Kasi gusto mo ba na isang tao lang mag-aadminister ng limang airport? (I do not want that but others do. Why am I against it? Do you want just one person administering to five airports?) “

While Tugade clarified that the Transportation department would still accepts unsolicited proposals, “there are certain airports that are better be bidded such as Davao.”

He also noted that the country needed more airports as NAIA would “not last forever”.

A so-called “super” consortium composed of seven Philippine conglomerates – including AEV – and the GMR-Megawide consortium have also submitted unsolicited offers to improve, operate and maintain the country’s main gateway.

Tugade said the proposals should not only address increasing NAIA’s passenger capacity but also consider the traffic situation outside the airport.

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