SSS, Megawide eye infra venture
State-pension fund Social Security System and Megawide Construction Corp. plan to form a joint venture that that will bid for the redevelopment of the Ninoy Aquino International Airport.
SSS chairman Amado Valdez said the two formed a task force that would conduct a feasibility study on the NAIA redevelopment, as well as other infrastructure projects like railways, tollroads, highways and airports.
The Megawide-SSS partnership will likely compete with the so called “super consortium” composed of Ayala Corp., LT Group Inc., Filinvest Group, JG Summit Holdings Inc., Aboitiz Equity Ventures Inc., Metro Pacific Investments Corp. and Megaworld Corp. The group earlier announced plans to submit an unsolicited proposal to the Duterte administration for the much-needed rehabilitation and upgrade of the country’s main gateway.
Amado said the SSS’ move to directly invest in infrastructure projects was aimed to boost the pension fund’s recurring income and help augment revenues amid the implementation of the pension hike approved by President Rodrigo Duterte.
SSS has been looking to participate in the booming infrastructure sector given the government’s focus on the “Build Build Build” infrastructure program.
Valdez said the infrastructure projects that SSS would join would be subject to a review by the risk committee of the pension fund.
“We will have the safety nets to protect the fund,” Valdez said.
The planned Megawide-SSS joint venture followed the pension fund’s decision to raise its stake in the construction firm to 5.12 percent in December.
“Our entry into Megawide is highly strategic. We see investments in the infrastructure sector as viable given the level of funding being poured by the public and private sectors into the infrastructure drive and volume of projects across the country,” Valdez said.
Megawide chairman Edgar Saavedra said SSS’ investment in the construction firm was a vote of confidence for the company.
“It is encouraging that SSS, the country’s biggest pension fund, is willing to invest in Megawide. It is an outstanding vote of confidence in the company’s vision and we are motivated to work even harder so we can deliver positive returns for all out stakeholders,” Saavedra said.
Megawide recently bagged the engineering, procurement and construction contract of the P12.5-billion Clark International Airport expansion project.
It also submitted an unsolicited proposal for the P51 billion East-West Railway Project.
Megawide in partnership with GMR of India won a 25-year concession agreement in December 2013 to upgrade Terminal 1 of Mactan Cebu airport and a contract design, financing, build and operate a second terminal.