GMR-Megawide consortium may bag Philippines project

Written by fe Bureau | New Delhi | Updated: Dec 13 2013, 09:08am hrs
Delhi airport operator GMR Infrastructure, along with Philippine lead partner Megawide Construction, are likely to win an airport terminal tender for Philippines second-largest commercial airport.

At an auction on Thursday, the consortium led with a bid of 14.4 billion peso ($326 million) for a 25-year concession to both operate the Mactan-Cebu International Airport and build one of its terminals. The consortium expects to invest $700 million for the airport towards a 25 million capacity, with Hyderabad-based GMR contributing about $84 million.

GMR Group president and CFO (airports) Sidharath Kapur said, GMR has 40% equity interest in the consortium. The expected capex for first phase is $325 million plus the upfront payment to government of $325 million (plus VAT). The total expected investment is about $700 million.

Another official added, About 70% of the $700 million will be raised by Megawide in the form of debt. Of the remaining 30%, GMR will fund 40%.

GMR beat six others in the bid, where participants included heavyweights such as the operators of Singapores Changi Airports International and South Koreas Incheon International Airport.

In fact, a rival bid by Filinvest-CAI consortium, which included Changi Airports, came close with a 13.99 billion peso bid. The tender for the airport, opened for bids by the Philippines Governments Department of Transportation and Communication, is touted as the largest so far under Philippines private-public partnership programme.

GMR, whose 25-year contract to develop and operate Maldives Male airport was cancelled last year after a regime change, currently also operates airports in New Delhi, Hyderabad and Istanbul. The Philippines venture will be the third effort to develop an airport overseas.

Philippines second-busiest Mactan-Cebu Airport connects central Philippines with direct flights to major asian destinations such as Hong Kong, Singapore, Seoul and Tokyo. The current terminal was designed with a 4.5 million passenger capacity, but in 2011 it handled about 6.2 million passengers.

Though the government bid had targeted 8 million capacity, the GMR-Megawide bid aims to build a larger terminal with over three time the target 25 million capacity. GMR Infra shares at the BSE closed 1.37% up at R22.15 on Thursday.