Megawide trumpets gains in Cebu airport PPP project
Engineering and infrastructure conglomerate Megawide Construction Corp. trumpeted the success of its major publicprivate partnership (PPP), the Mactan-Cebu International Airport, in a forum yesterday.
Speaking during an economic forum organized by BusinessWorld yesterday, Megawide chief financial officer Oliver Tan said the company’s experience with the Cebu airport via the PPP mode has been positive.
He compared the Mactan-Cebu airport to the new Iloilo Airport which was pursued by the government and funded through a loan from the Japan Bank for International Cooperation (JICA).
Comparing the financing mode of the two projects – ODA versus PPP – Tan said the delivery period of the Iloilo airport took nine years and two months, while for the Mactan-Cebu airport, the delivery period is only three and a half years including a one-year delay as a result of a case filed by the losing bidder.
Under the previous administration, Megawide won the bid to operate the Mactan-Cebu Airport, which the government turned over to the company in 2014.
In the first quarter of the year, the company’s revenue from airport operations jumped 32 percent, contributing P570 million or 12 percent of Megawide’s consolidated revenues.
GMR MEGAWIDE Cebu Airport Corporation is Megawide’s subsidiary which operates the airport.
Net income grew 44 percent to P271 million, representing 49 percent of total consolidated net earnings.
Tan said the consortium has also been able to improve the Cebu airport significantly.
“Since we took over, checkin time has improved to 10.5 minutes from 6.85 minutes,” he said.
Getting the luggage from the plane has improved to 6.5 minutes from 11 minutes while going through airport security from pre-check-in stage has improved to 3.9 minutes from nine minutes, Tan said.
In all, he said that based on the company’s experience with the Mactan-Cebu International Airport, the PPP financing mode for infrastructure has been positive and faster.
Moving forward, he said the company would continue to support the Duterte administration’s infrastructure program.
At the same time, Tan said there is no one size fits all funding mode for implementing government infrastructure projects and there are inherent risks whichever the mode.