PCC clears joint venture set to develop Sangley Point Int'l Airport

Antitrust watchdog Philippine Competition Commission (PCC) on Monday said it has cleared the proposed joint venture of the Cavite provincial government and a Virata- and Yuchengo-led consortium set to develop the Sangley Point International Airport (SPIA).

The PCC said it has determined that the proposed transaction involving a public-private partnership (PPP) project, to be implemented through a joint venture development agreement, “is unlikely to result in a substantial lessening, restriction, or prevention of competition in the relevant market.”

This comes as the Cavite provincial government in September 2022 awarded the $11-billion contract to develop Sangley Point to the SPIA Development Consortium, which includes Virata-led Cavitex Holdings Inc., and Yuchengco-led House of Investments.

The SPIA Development Consortium submitted an unsolicited proposal for the project in 2021, with a joint venture with the Cavite provincial government. It was granted the original proponent status in January 2022.

According to the PCC, its decision focused on three key points — competition in the construction services market, the relationship between the parties as major players in the market, and the possibility of overlapping businesses.

The PCC said it found that the competition between construction companies was “robust” due to the presence of “numerous qualified contractors” in the market.

The watchdog said that despite House of Investments having a majority stake in construction firm EEI Corp., it does not have enough market power to block other companies from getting what they need or finding customers, and that Samsung C&T Corp. as the main contractor helps ensure fair competition.

The PCC also found that firms in partnership for the project “do not have overlapping businesses,” and that the “numerous companies” in the market help in sustaining competition.

“The Commission noted that even if the companies involved wanted to limit their suppliers’ options, they would not have enough market power to do so,” it said.

“Additionally, the presence of strong competitors like Megawide Construction Corp. and Makati Development Corp. helps to prevent any unfair competitive practices by the joint venture,” the PCC added.

Under the project’s framework, the Cavite provincial government and the SPIA Development Consortium will have up to 18 months from the signing of the joint venture and development agreement to finalize the project’s design and business plan and to reach financial closing.

The first phase will include the first of four runways to be operational by 2028, while the second phase will result in a two-way runway system with airport facilities having a capacity of at least 75 million passengers per annum. —KBK, GMA Integrated News