Conflict of interest.
The public-private partnership (PPP) initiative is the vehicle by which the country expects to attract foreign investors to fund important projects. Among these are the Puerto Princesa Airport Development Program (PPADP).
But conflict of interest issues have been raised against a bidder.
Ozamis City lawyer Bryan Bantillan, representing concerned parties, wrote the Department of Transportation and Communications (DOTC) to show that Kumho Industrial Co. Ltd., had ties with Incheon International Airport Corporation (IIAC), which was hired by as consultant in order to guarantee fair bidding process.
He said: "Any consultant's involvement with a bidder is strictly prohibited under Instruction to Bidders for the PPADP which was provided for by DOTC."
But in the pre-qualification notice dated May 2013, Bantillan noted that IIAC was lead partner of Kumho in the legal, technical, and financial transaction for the Mactan-Cebu International Airport expansion project, costing R17.5 billion.
Hanjin Heavy Industries and Construction Co. and Kumho Industrial Co. are the two South Korean companies bidding for PPADP as civil works contractors. South Korea is providing the loan for the project hence it is a tied loan that could only be participated in by Korean companies.
The bid evaluation consists of 70 percent technical and 30 percent financial proposal, the criteria proposed by IIAC.
Bantillan pointed out that the IIAC and Kumho were in a joint venture to construct the Mactan-Cebu International Airport, a clear case of conflict of interest since Incheon could favor Kumho in the PPADP bidding.
This view was also concurred in by a memorandum from lawyer Gerard L. Chan, officer-in-charge of the Office of the Assistant Secretary for Legal Affairs and Director for Legal Services of the DOTC, addressed to Undersecretary Gonzales who is in charge of Bids and Awards Committee (BAC) Secretariat.
Chan said that in order to avoid any allegation of partiality, conflict of interest, or collusion, Item 4.3, Sec. 1, of the instructions to bidders should be followed, which says: "A bidder shall not have conflict of interest; all those found to have conflict of interest shall be disqualified," as per DOTC legal opinion in a memorandum dated December 16, 2013.