Swiss challenge for NAIA rehab seen completed by Q1

By Arjay L. Balinbin, Senior Reporter

MEGAWIDE CONSTRUCTION Corp. expects the Swiss challenge for the P109-billion Ninoy Aquino International Airport (NAIA) rehabilitation project to be completed in the first quarter of 2021.

“The last requirement of NEDA (National Economic and Development Authority) is actually the submission of financial requirements, so we will be submitting that within the week,” Megawide Director Manuel Louie B. Ferrer said at a press briefing on Monday.

“Hopefully, this gets elevated to the Cabinet Committee level, after which is the Swiss challenge, so hopefully we can wrap up the whole thing by the first quarter of next year,” he added.

As an unsolicited proposal, Megawide’s project will undergo a Swiss challenge, in which other companies are invited to make competing offers while giving the original proponent the right to match them.

Megawide Chairman and Chief Executive Officer Edgar B. Saavedra said NEDA had raised concerns over the company’s financial capability to undertake the project.

“They were looking at the full P109-billion capital expenditure (capex) while we were looking only at the phase 1 [of the project], which was our understanding,” he said. “The total capex is P109 billion. This is a program of eight to 10 years. Now, 60% of that P109 billion will be by Megawide, 40% by GMR (GMR Infrastructure Ltd.).”

The company expects to spend P12 billion for the first phase of the project and P20 billion for the second phase in the first three to four years of implementation, Mr. Saavedra said.

The project will involve improvements to airside and landside; construction of a new passenger terminal building; and apron and taxilane improvements. Also, the cargo terminal and fuel farm will be moved to accommodate the new passenger terminal building and prevent disruption in operations.

Megawide will also build a bus rapid transit and elevated railway that will ferry passengers within the NAIA complex.

Mr. Saavedra is confident the company could raise the capital needed for the NAIA rehabilitation project.

“We have engaged with a couple of local banks and international bank investors, and we viewed that this asset is a good asset,” he said.

“Many investors and lenders want to support the fund-raising exercise even during the pandemic,” he added.

Since Megawide is a listed company, we have many investors in the capital market — investors or lenders who are very supportive — both local and offshore,” Mr. Saavedra said.

Transportation Undersecretary for Planning & Project Development Ruben S. Reinoso said in August that NEDA’s Investment Coordination Committee had asked the joint venture of Megawide and GMR to clarify issues “on financial capacity and the joint and solidary liability agreement of the consortium.”

Megawide and GMR operate the Mactan-Cebu International Airport (MCIA) through its subsidiary GMR-Megawide Cebu Airport Corp.

On July 15, the Megawide-GMR tandem was given the original proponent status for the development of NAIA, after the government revoked the one granted to the “super consortium” of the country’s top conglomerates.

Megawide shares on Monday closed 7.89% higher at P9.44 apiece.