Bidding for Iloilo airport a failure - Finance

Philippine finance officials on Wednesday declared a failure the public bidding for the old airport in Mandurriao, Iloilo after all three bidders gave offer prices lower than the P1.2-billion floor price. Only three of the five pre-qualified bidders showed up during the auction held at the Department of Finance. Finance undersecretary John Philip said that the committee on privatization has pre-qualified Ayala Land Inc., Empire East Holdings Inc., Robinsons Land Corp., Rockwell Land Corp., and SM Prime Holdings Inc. But at the actual auction, only EELHI, Robinsons Land and SM Prime appeared. Sevilla said the other pre-qualified bidders informed the auction committee that they would not be participating. Robinsons Land made the highest bid of P1.089 billion for the property. EELHI bid P701 million while SM Prime bid P435.791 billion. SM Prime officials said the government's asking price was too high compared to the value of land surrounding the property. Sevilla however said the government was not likely to immediately adjust the floor price, despite the low bids it received for the property. He said there were other options for enhancing the attractiveness of the area. "We put this property on the block on an as-is, where-is basis. But there are informal settlers there and a couple of untitled portions that bisect the property. It is possible for us to clean this up ourselves before offering this again," he said. According to the finance official, the floor price for the old airport was based on separate appraisals made by different agencies on the 56-hectare area. "The difficulty is that this property is huge so the price is not as homogenous as you might expect in a smaller property," Sevilla said. The Finance department's privatization group has yet to decide whether to rebid the property, or to subject it to a negotiated sale. The group is waiting until after the national elections to make the decision on how to dispose of the property. "Legally, there is now law that requires us to rebid the property so a negotiated sale is also an option right now. We have asked the participants to give us until after the elections to sort this out," Sevilla said. The government has earlier said that part of the sale proceeds would be used to pay a P6.2 billion loan from Japan Bank for International Cooperation, which was used to finance the construction of the new Iloilo International Airport in the Sta. Barbara – Cabanatuan area. The proceeds will also be used to fund the construction of a first class highway interconnecting the provinces of Iloilo , Capiz, Antique and Aklan. - GMANews.TV