Finance Secretary Sonny Dominguez and Socioeconomic Planning Secretary Karl Chua have thumbed down the unsolicited proposal of bilyonaryo Edgar Saavedra to rehabilitate and expand the Ninoy Aquino International Airport (NAIA) for P109 billion.
The two officials returned the “second-in-time unsolicited proposal” for NAIA following the Investment Coordinating Committee’s (ICC) findings that Megawide’s equity position is insufficient to finance the equity requirement for the proposed project.”
Megawide only has P18 billion in equity as of December 2019 which is too small for the P32.3 billion required for the NAIA project.
Since the Department of Transportation endorsed Megawide’s proposal for approval to the ICC in July, Dominguez and Chua said “we still have not received any document” that would prove Megawide’s capacity to take on NAIA along with its other projects.
Dominguez and Chua declared Megawide’s plan to raise more cash through the issuance of preferred and treasury shares, increasing its retained
earnings, and cash generated from the project as “speculative.”
“(These) are not guaranteed to materialize…the financial capability of Megawide is mostly hinged on uncertain sources. More importantly, the requirement under the BOT (Build Operate Transfer) Law and its IRR (implementing rules and regulations) is to establish the financial capacity at the time of submission of the proposal,” Dominguez and Chua said in a letter dated Nov. 19.
The two officials pointed out that Megawide was also pushing for the 50-year integrated development plan of the Mactan-Cebu International Airport which required another P90.1 billion in equity.
“Megawide has yet to officially express such intent in writing and provide other financial documents to meet the P32.2 billion equity requirement for the entire NAIA project,” said Dominguez and Chua.