GMR emerges highest bidder for Philippines airport project

GMR Group of India in consortium with Megawide Construction Corporation of Philippines has emerged as the highest bidder for the development of the Mactan-Cebu International Airport expansion project in the Southeast Asian country. The consortium offered a Peso 14.4 billion (approximately Rs.2,100 crore) premium bid for the airport expansion project.

The other six bidders who submitted the financial bids were San Miguel Group and Incheon Airport Consortium (Peso 9 billion); Metro Pacific Investments Corporation and JG Summit Holdings (Peso11.23 billion); First Philippine Airports consortium (Peso 4.7 billion); Premier Airport Group (Peso 12.5 billion); Filinvest-Cai consortium (Peso14 billion); and AAA consortium (Peso 11.09 billion).

The Bids and Awards Committee of the Department of Transportation and Communications, Government of Philippines, will scrutinise the financial bids by January 6, 2014, and award the project on the same day. DOTC is planning to sign the contract by February 6.

The Mactan-Cebu International Airport project is the first airport agreement under the PPP scheme of the Philippines government. The project involves the construction of a new international passenger terminal building with an annual capacity of 8 million passengers while the existing passenger terminal would be expanded to accommodate more. The project, estimated to cost Peso 17.5 billion, would become the second-largest Philippines airport after the Ninoy Aquino International Airport.

GMR Infrastructure, a GMR group company, has entered into an agreement with TAV Airports Holdings of Turkey to sell off its 40 per cent stake in Istanbul’s Sabiha Gokcen International Airport for Rs.2,500 crore. Though it has signed the agreement, GMR needs the approval of its partners, Malaysia Airports Holdings which owns 20 per cent and Limak Holdings which owns 40 per cent stake.

GMR Group has a cumulative debt burden of around Rs.41,000 crore and a part of the proceeds from the transaction would be used to bring down the borrowings. The group may also use the funds to increase its shareholding in Delhi International Airport Ltd by buying Fraport AG’s 10 per cent stake in DIAL as the German company plans to exit the venture in May 2014. The group is also in talks with Malaysia Airports Holdings Berhad to buy its 10 per cent stake in the venture for Rs.450 crore. The deal is likely to be concluded by March 2014. After both transactions GMR’s shareholding in Delhi Airport would rise from 54 per cent to 74 per cent.

GMR Group operates the Delhi and Hyderabad airports in India.