"Sources say procurement rules were bent to accommodate this group."
"Sources say procurement rules were bent to accommodate this group."
All along, it seemed the Clark International Airport had always been there for the taking—by this particular group.
Starting with their unsolicited bid in 2017, the consortium led by Filinvest Development Corporation and JG Summit Holdings, Inc. appeared to be the most serious among the bidders for the operation and management of the CIA, albeit amid allegations it got a “little help” from no less than the Bases Conversion and Development Authority.
According to sources within the industry, the other bidders for the operation and management of the airport backed out of the bidding after the BCDA allegedly amended the Instruction to Bidders and postponed the bidding at least five times to give the Filinvest-led consortium time to comply with the requirements.
Accordingly, the date for the submission of bids was initially announced to be on July 20, but it was moved to August 20, then September 4, then October 30, and then November 5. Approaching November 5, the deadline was then pushed to November 9.
These postponements would be made within weeks, sometimes days, of the previously-set deadline, which presented challenges to potential bidders.
Throughout these postponements, the BCDA reportedly revised the Instructions to Bidder (ITB) several times, at times retracting their own amendments.
The initial ITB required the Bidder or a consortium’s Financial Lead to have a net worth of P5 billion. In July 2018, this was revised to P3.5 billion. In August 2018, this was further reduced to P2.8 billion. On October 4, 2018, the original P5 billion net worth requirement was restored.
The minimum equity requirement for the Operation and Management (O&M) Lead, initially set at 20 percent per the ITB, was lowered to 15 percent in August 2018.
The loan capability of the Bidder or Financial Lead was increased from the initial requirement of P10 billion to P11 billion in October 2018.
In a bulletin circulated on October 4, 2018, the BCDA also added the requirement that consortium members should have a minimum net worth of P5 billion multiplied by their interest in the consortium (P5 billion multiplied by 20 percent is P1 billion).
The BCDA also changed the payment terms for the winning concessionaire. In the initial ITB, the winning concessionaire was to pay P10 billion to the BCDA in equal installments over the first ten years of its concession.
In the revised version, the winning concessionaire will now be made to pay P500 million to the BCDA every year throughout the concession.
In a later bulletin, the BCDA further revised the ITB to allow consortium members to nominate Affiliates to satisfy the net worth requirements.
In response to a bidder query in June 2018, the BCDA allowed bidders to submit Interim Financial Statements dated no earlier than June 30, 2018 to allow more bidders to participate in the process.
However, this was revoked on October 18, 2018, when the BCDA suddenly prohibited the submission of Interim Financial Statements, which prevented bidders from increasing authorized capital to comply with net worth requirements.
This was the deal-breaker as sources say the terms in the ITB are suspiciously restrictive and seem to favor one bidder.
The initial ITB is strangely specific, even saying that the Bidder or O&M Lead has to have operated an international airport included in the Skytrax list of Top 20 Best Airports (later revised to Top 50).
According to the sources, there is no need to impose net worth requirements from the O&M Leads of consortia, because it is the Financial Lead that will be financing the project.
Further, my source says that the much-contested prohibition of airline-related entities is unreasonable. Ironically, when asked for justification, the source averred the BCDA provided none.
These puzzling acts of the BCDA, the source claims, may conflict with the equal-protection clause of the Constitution, as the terms of this supposedly public bidding seem to deliberately hinder many from participating in it. The constant extensions and amendments might indicate the conduct of the bidding was not done in accordance with procurement laws and regulations.
Also, the final bid submission dates were postponed within mere days of the previously set deadline, which could violate the notice requirements as prescribed by law.
In fact, the source says that the entire process has become so convoluted that the consortium including Metro Pacific Investment Corp. disclosed in October 2018 that it decided to no longer pursue bidding for the contract due to “various challenges.”
As such, the Filinvest-led consortium which now include Changi Airports Philippines Pte. Ltd., a 100 percent-owned subsidiary of Changi Airports International Pte. Ltd., operator of Changi Airport in Singapore and Philippine Airport Ground Support Solutions, Inc. won the bidding unopposed.
This is the same consortium that submitted an unsolicited bid for the airport in 2017, which was the event that triggered the conduct of this public bidding in the first place as if everything was actually reserved for them.