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A lawmaker has called on the Department of Transportation (DOTr) to turn down Megawide Construction Corporation’s (MCC) unsolicited proposal for the expansion and operation of the the Ninoy Aquino International Airport (NAIA) after its rejection by the Department of Finance (DoF) and the National Economic Development Authority (NEDA).

PBA Party-list Rep. Jericho Nograles warned DOTr Monday (November 23) that it could face graft charges if it doesn’t heed the decision of DOF and NEDA.

“Should the DoTr continue to entertain this unsolicited proposal, then it is clear that the agency is favoring a private contractor for a contract that may be disadvantageous to the government. This is a crime under section 3 of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act,” he said in a statement.

In a three-page memo to Transportation Secretary Arthur Tugade, DOF and NEDA said MCC’s equity position was nsufficient to finance the equity requirement for the proposed expansion project. The two agencies are the main regulators that check and approve all Public-Private Partnership (PPP) and Build-Operate-Transfer (BOT) projects.

“We are returning the submitted unsolicited proposals and project documents in view of the findings of the ICC (Investment Coordination Committee) Secretariat’s evaluation that MCC’s equity position is insufficient to finance the equity requirement for the proposed project,” read the memo, which was signed by Finance Secretary Carlos Dominguez and NEDA Secretary General Karl Chua.

“Despite the ICC Secretariat’s reiteration in our 12 October 2020 letter and 23 October 2020 meeting with the agency that MCC does not meet the equity requirement of the project, we have still not received any document that proves otherwise,” the DOF-NEDA memo added.

Dominguez and Chua reminded Tugade that “Section 10.7 and 10.8 of Republic Act 7718 or the Amended BOT Law and its Implementing Rules and Regulations (IRR) require the sponsor agency’s due diligence in the review and conferment of the Original Proponent Status (OPS) to a private proponent.”

“ The agency, in this case, shall, among others, ensure that the proponent has submitted complete documents, complete the evaluation of the project and ensure that the proponent is qualified in accordance with pre-qualification requirements,” the DoF-NEDA memo said.

The two agencies also told the DoTr that under the BOT Law and its IRR, the project proponent’s financial capability must be established for the equity requirement for the entire project cost.

In the memo, DoF and NEDA noted that MCC’s equity position of P18 Billion based on its 2019 audited financial statement, is insufficient to finance the P32.3 Billion equity requirement of the project.

The regulators likewise dismissed the claim of the Manila International Airport Authority (MIAA) that MCC’s net worth should only be evaluated with respect to the initial phase of the project and stressed that this does not comply with the provisions of the BOT Law. It said that the prospective sources for the financing for the project’s succeeding phases “ are speculative and not guaranteed to materialize.”

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