Business

DOF, NEDA lecture Tugade: Don’t submit deficient BOT proposals to avoid Megawide fiasco

Finance Secretary Sonny Dominguez and acting National Economic and Development Authority (NEDA) Secretary Karl Chua are asking Transportation Secretary Art Tugade to be more circumspect in endorsing proposals for build, operate and transfer (BOT) projects.

Dominguez and Chua made the order after the Investment Coordinating Committee (ICC) rejected the P109 billion offer of Megawide Construction to rehabilitate and expand the Ninoy Aquino International Airport (NAIA) for bilyonaryo Edgar Saavedra’s lack of equity to undertake the project.

“May we request DOTr (Department of Transportation) to kindly ensure that all the requisite documents, as specified in the attached ICC checklist of documentary requirements for the unsolicited proposal for the comprehensive capacity enhancement project are complied with by the private proponent in form and substance,” said Dominguez and Chua in a November 19 letter rejecting Megawide’s offer.

Dominguez and Chua also added that DOTr should also evaluate any proposal in accordance with the Amended BOT Law and its IRR (implementing rules and regulations) “prior to the endorsement or resubmission of the unsolicited proposal for ICC/NEDA Board action.”

Under the IRR, DOTr should have exercised more due diligence in conferring Megawide with original proponent status (OPS) last July. As sponsor agency, DOTr should have not only submitted complete documents and fully reviewed the offer, it should have made sure that Megawide was qualified (legally, technically, and financially) prior to granting Megawide OPS.

Based on its findings, Megawide had only P18 billion in equity as of December 2019 or way short of the P32.3 billion equity requirement.

Dominguez and Chua said DOTr’s assertion that Megawide’s net worth should only be evaluated with respect to the initial phase of the project was in conflict with the BOT Law’s requirement that a proponent’s financial capability must be established for the “equity requirement of the entire project.”

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