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Megawide-SSS group to bid for NAIA rehabilitation

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The Social Security System (SSS) and Megawide Construction Corp. are looking to submit an unsolicited proposal for the Ninoy Aquino International Airport rehabilitation. Photo by Arra B. Francia

By Arra B. Francia, Reporter

DIVERSIFIED engineering conglomerate Megawide Construction Corp. and Social Security System are planning to submit to the government an unsolicited proposal for the rehabilitation of Ninoy Aquino International Airport (NAIA).

SSS Chairman Amado D. Valdez on Friday said the state-run pension fund is looking to pursue more projects with Megawide after increasing its stake in the latter earlier this month.

“We’re looking into the feasibility of participating in a consortium in the redevelopment of NAIA,” Mr. Valdez told reporters in a press conference in Quezon City.

SSS officials noted Megawide has an advantage, as the company’s joint venture with Bangalore’s GMR Infrastructure Ltd. won the bid to build and operate the Mactan-Cebu International airport, which is set to be completed this June. The listed firm last month secured the contract to build the new passenger terminal of Clark International Airport.

“We have the edge — interoperability of these two airports will be critical. There will be an advantage when there’s just one operator,” SSS Commissioner Jose Gabriel M. La Vina said during the same event.

The consortium plans to submit the proposal for the NAIA rehabilitation within the first quarter.

The Megawide-SSS tandem’s proposal will be up against one submitted by a “super consortium” composed of Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corp., Andrew L. Tan-led Alliance Global Group, Inc., Lucio Tan’s Asia’s Emerging Dragon Corp., Gotianun-led Filinvest Development Corp., Gokongwei-led JG Summit Holdings, Inc., and Metro Pacific Investments Corp.

Aside from the NAIA, Megawide said it is also looking to participate in smaller regional airports in the country.

“We’re not limited to NAIA. There are more than 80 airports in the Philippines, so that presents us with a lot of airport opportunities,” Megawide Corporate Information Officer Manuel Louie B. Ferrer said.

Should the Megawide-led consortium win the bid for the project, Mr. Valdez said SSS would be able to take part in the construction of a project that directly affects its members.

Mr. Valdez said SSS and Megawide, as its construction partner, are also looking to work with the Bases Conversion Development Authority for other infrastructure projects in the future.

The state-run pension fund has recently increased its stake in Megawide to 5.17%, equivalent to 110.53 million shares. This comes as the SSS aims to participate in the infrastructure sector to take advantage of the government’s “Build, Build, Build” program.

SSS officials said they are looking to increase its Megawide stake by up to double of what they now have, bringing them closer to the 12.5% needed to get a board seat in the company.

“The commitment is more or less double of what we have now,” Mr. La Viña said.

However, Megawide gave SSS a board seat to be filled by Mr. La Viña as a special accommodation.

“We will see to it that all the safety stops will be followed in making the investments,” Mr. Valdez added.

For its part, Megawide said SSS’ investment in the company is a vote of confidence.

“We’re very happy, this is a vote of confidence, especially since SSS is a public fund. And for us, also we are very active now in going to this infrastructure business so we want partners. Also with SSS as one of the consortium members, we want to help because they want a higher yield,” Megawide Chairman Edgar B. Saavedra said.

Megawide booked a 7% increase in its consolidated earnings for the first three quarters of 2017 to P1.7 billion, on the back of a 4% rise in revenues to P14.3 billion.

Shares in Megawide climbed 22 centavos or 1.24% to P17.94 apiece at the stock exchange on Friday.