April 08, 2014

MWIDE-GMR group clinches the Mactan-Cebu airport project

The consortium composed of Megawide Construction Corp (MWIDE) and Bangalore-based GMR Infrastructure was reported to have finally been awarded last Friday night the P17.4b Mactan-Cebu international airport expansion and modernization contract which was bid out under the Public Private Partnership program.

The consortium offered a P14.4b bid for the project, winning by a slight margin over the P13.99b offer by the consortium of Filinvest Development Corp and Changi Airports Mena Pte Ltd. The award was delayed as government had to address the protest by the FDC-Changi group regarding the alleged conflict of interest involving GMR.

Our take: The award is a welcomed development and should help restore positive investor perception on the PPP program which has been weighed by delays and protests.

The project is seen to be a key step towards realizing government’s thrust to beef up the country’s tourism sector and spur development in southern Philippines. What could delay the implementation of the project is if the court grants a motion for injunction filed by a senator in relation to allegations of conflict of interest vs. GMR.

At any rate, we believe MWIDE is becoming a key and credible play on the government’s infrastructure program. This will be the third (but the first major) infrastructure contract won by MWIDE. The first two pertains to school buildings construction contracts. – WealthSec