NO misnomer in that title. It’s just that the acronym for the primate intelligence agency in the world happens to also stand for Clark International Airport — the hottest issue in the corporate world nowadays. At any rate, be it in flying planes or downing regimes, CIA can illustrate the dilemma of that monkey which said, “Just as when I knew all the answers, they suddenly changed the question.”
The bid for the expansion of the facilities and services (they call it O & M — for operation and management) of the CIA had been regular at the start. This was in April last year, when the National Economic and Development Authority (NEDA) board approved the P5.61-billion Clark International Airport Expansion Project and O&M Public-Private Partnership (PPP) concession. That same month, the Bases Conversion and Development Authority (BCDA) opened the bidding for the purpose and received intentions from local and foreign firms, namely,
Malaysia Airports Holdings, GVK Airport Developers Ltd. of India, Groupe ADP of France, Zurich Airport of Switzerland, and AviAlliance of Germany. They were among the 30 companies that attended the pre-bid conference in May. The bid was for the operation and management of CIA’s existing terminal and an expanded complex consisting of a new terminal building, hangars, maintenance, repair and overhaul facilities, as well as airside lease and rental facilities for commercial activities. Everything was to be operational by June 2020.
According to Joshua Bingcang, BCDA senior vice president for business development and operations, of the 30 potential bidders which attended the pre-bid event, only 10 purchased bid documents, thereby making them the ones qualified for the bid process. When on December 19 the winning bidder was announced, it turned out to be the North Luzon Airport Consortium (NLAC) — neither among the 30 in the pre-bid affair nor one of the 10 that made the qualifying move of purchasing bid documents.
We learn what the NLAC is from a disclosure letter dated Nov. 9, 2018 to the Securities and Exchange Commission, the Philippine Stock Exchange, and the Philippine Dealing and Exchange Commission. In the letter, Sharon P. Pagaling-Refuerzo, assistant corporate secretary and corporate information officer of Filinvest Development Corp., informed the three regulatory entities that “Filinvest Development Corporation, together with JG Summit Holdings, Inc., Changi Airports Philippines (I) Pte. Ltd., and Philippine Airport Grand Support Solutions, Inc. have formed an unincorporated consortium named North Luzon Airport Consortium. The consortium submitted today to the Bases Development Authority (BCDA) its bid to manage, operate and maintain the existing and the new passenger terminals of the Clark International Airport.”
While the CIA bid process commenced as early as May last year, to a bidder who would come around only six months after would be awarded the plum contract.
That’s how millennials would pose the question. How did somebody who for a long period had not been there among the participants in the CIA bid process suddenly emerge winner?
Quite a windfall is to be had from the entire O&M CIA undertaking. That’s a given and no need to dwell on the matter. What needs looking into is the strange manner in which the bid process was undertaken. The deadline for submission of bids was set for July 2018 following the pre-bid occasion in May. That deadline was twice moved for later, for what reason only the bids committee of the BCDA must know, but at any rate witnessing rather gross modifications of the bid rules so that initial non-participants were conveniently accommodated in the process. Thus, after NLAC was formed on Nov. 9, 2018, as stated in the letter, and submitted on the same day its bid for O&M of CIA, did the bids committee set the final deadline for submission of bids?
NLAC’s bid offer turned out to be the highest, 18 percent government share from the gross income, nearly double the ceiling set by NEDA for the project, which is 10 percent. It certainly is a staggering rate, evidently calculated to outbid everyone else.
But, evidently as well, as an ultimate safety valve for the intended winning bidder, the bids committee made for its supreme requirement a rule that participants in the bid process must be developers of Skytrax-ranked airports.
Now, what is Skytrax? It is an inflight research entity based in the United Kingdom which conducts surveys from international travelers so as to rate cabin staff, airports, airlines, airline lounges, on-board catering, inflight entertainment and other appurtenances of air travel.
It certainly is an open book and quite well-known in the air industry that Changi Airports Phil., part of the NLAC Consortium, is a subsidiary 100 percent owned by Singapore-based Changi International Airport Group, hence must enjoy its parent’s Skytrax accreditation as the world’s Top 1 airport. So, although the BCDA bids committee went through the rigmarole of qualifying as bid participants operators and developers of some 50 Skytrax-listed airports the world over, by that very requirement, the bids process early on ensured that the NLAC would win.
Cool charade, might we say.
True enough, once NLAC entered the picture, BCDA scheduled pronto the announcement of the bids award.
And the winner is… taradyan… Changi!
Err… North Luzon Airport Consortium!
That announcement slip may not necessarily be erroneous. Chances are Changi is the dominant one among the four comprising the NLAC Consortium. What only needs further looking into is the actual percentage of its ownership of the group’s shares of stocks.
There is one aspect in this scheme that has been overlooked, and it is the requirement by the Board of Investments that in cases where foreign investors do business in the Philippines, their equity in the undertaking must be less than 60 percent, the minimum set for Filipino counterparts. It would be a fair guess that NLAC had also taken care of this and had limited, if only on paper, Changi’s ownership of the consortium to, say, 40 perecent? That makes things legit, with the 60 percent evenly apportioned among the other three at 20 percent apiece? Now, if these figures be true, you know as well as I do that the dominant partner in NLAC is… taradyan… Changi!
Final requirements for NLAC’s formalizing of the award are set for issuance by the BCDA January 19 or thereabouts. Nothing much to be excited about it. It’s been a done deal from the very beginning.