Rigged for China?

Philippine Daily Inquirer

An exclusive report in this paper on Jan. 30 raised

questions about the selection process for a flagship
project of the Duterte administration that, according to
sources quoted in the report, appears to show that a
Chinese firm had been “favored from the beginning.”

The project is the $10-billion Sangley Point International

Airport in Cavite, a new gateway seen to help decongest
the country’s main international airport.

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A look at the documents showed, first of all, that the

feasibility study and the draft joint venture agreement
issued to potential bidders for the project already seemed
to make clear that the project would involve China.

“There were many direct references to the Chinese

government’s planned involvement in the project from its
feasibility study dated July 2019 to the draft joint venture
and development agreement issued to potential bidders
starting Oct. 11 last year,” noted the report.

The Cavite provincial government directly mentions China

in the draft agreement, a section of which reads: “…The
province has initiated discussions on the provision of debt
financing for Phase 1 with the development financial
institutions and policy banks of the People’s Republic of
China.”

The Sangley project, according to the feasibility study, will

be funded mainly through borrowings, with about 98
percent of the debt to be provided by the Chinese—
specifically the state-owned China Development Bank,
which will finance 75 percent or P413.25 billion of the
estimated project cost of P550 billion.

The remaining 23 percent will be underwritten by other

state-owned Chinese enterprises, and 2 percent by the
Cavite government.

Taken together, “There are traces all over that it’s

intended for the Chinese,” said one of this paper’s
sources, and that, as the report noted, “Reading all the
documents together implied that a potential Chinese
lender might not favor a non-China aligned partner.”

The “subjective criteria” was not the only red flag;

potential bidders also backed out because of an
“unrealistic” deadline of two months to prepare the
proposals, instead of at least six months to a year, which
indicated that the selection process was deliberately
rushed for the favored bidder.

“It was clear to us that the project is really for China,” one
of the proponents told the Inquirer.

The outcome of the bidding seems to bear this out. Six

companies initially expressed interest in the project by
purchasing bid documents on Oct. 11 last year —
MacroAsia, Metro Pacific Investments Corp., Prime Asset
Ventures Inc., Philippine Airport Ground Solutions Inc.,
Langham Properties Inc., Mosveldtt Law Offices, and
Megawide Construction Corp.

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When the deadline to submit proposals ended on Dec. 17,

only one bidder came forward — the Lucio Tan-owned
MacroAsia, in partnership with China Communications
Construction Co. Ltd. (CCCC), a China state-run
infrastructure company.

With no other bidders, the MacroAsia-CCCC consortium

is expected to be formally awarded the joint venture
public-private partnership project with the Cavite
government.But if the selection process was indeed
rigged from the beginning to favor a China-aligned party,
that would only add to the reservations that have been
raised about the likely winning bidder.

In 2009, for instance, MacroAsia’s partner CCCC, China’s

biggest firm, was blacklisted by the World Bank due to
alleged fraudulent practices. And one of CCCC’s
companies that will work on the Sangley project, CCCC
Dredging (Group) Co. Ltd., built China’s illegal military
installations on islands seized from the Philippines in the
West Philippine Sea.
Alarmed observers have also warned about the national-
security implications of giving Chinese companies owned
or controlled by the Chinese government access to
strategic defense installations such as the Sangley airport,
which was developed by the Americans as a military base
vital to the protection of Manila, the country’s capital.

While the Duterte administration is busy undoing, or trying

to undo, supposedly “onerous” contracts with local
companies, it visibly relaxes its stern gaze when it comes
to China and Chinese deals.

To date, Chinese companies have been allowed to set up

telecommunications equipment right inside Philippine
military camps, bag critical infrastructure projects such as
dams and bridges, provide CCTV coverage to parts of
Metro Manila, and virtually run the country’s power grid.
Soon, Beijing is likely to add the Sangley airport project to
its list of no-sweat acquisitions.

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