The Philippine Competition Commission (PCC) said Monday it approved the proposed joint venture between the Cavite provincial government and the consortium of Cavitex Holdings Inc. and House of Investments Inc. for the development of the $11-billion Sangley Point International Airport (SPIA).
It said the proposed transaction, which involves a public-private partnership (PPP) project to be implemented through a joint venture development agreement, “is unlikely to result in a substantial lessening, restriction or prevention of competition in the relevant market.”
The entities involved will develop, own, operate, manage and maintain the SPIA in Cavite City, which is intended to alleviate congestion at the Ninoy Aquino International Airport.
The decision focused on three key points: competition in the construction services market, the relationship between the parties as major players in the market and the possibility of overlapping businesses.
The PCC said in its decision the competition between construction companies was robust due to the presence of numerous qualified contractors in the construction services market.
If said that if the parties themselves decided to limit competition, consumers would still have the ability to explore other options in the market due to the numerous available choices.
The PCC examined the relationship between House of Investments and EEI Corp. (EEI), a major construction company.
It said that despite House of Investments owning a majority stake in EEI, EEI does not have enough market power to block other companies from getting what they need or finding customers.
Having Samsung C&T Corp. as the main contractor for the airport project helps ensure fair competition, it said.
The PCC said the companies working together on the project do not have overlapping businesses, and that the presence of numerous companies in the market helps in sustaining competition.
The commission said that even if the companies involved wanted to limit their suppliers’ options, they would not have enough market power to do so.
The presence of strong competitors like Megawide Construction Corp. and Makati Development Corp. helps to prevent any unfair competitive practices by the joint venture, it said.
SPIA Development Corp., which is composed of Cavitex Holdings, Yuchengco Group, MacroAsia Corp. and their foreign partners earlier said that project includes the construction of a four-kilometer connector road, with provisions for rail connectivity, fully-integrated logistics and aviation support facilities. With the development of the first runway, SPIA can operate as a satellite runway to immediately relieve the extreme congestion of the runway at NAIA.
It is expected to create 50,000 jobs and be a catalyst project to bring in foreign direct investments that will promote trade and economic development, the group said.
