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UPDATE 2-Philippines cancels $10 bln airport plan with Chinese-led group

Published 01/27/2021, 09:45 AM
Updated 01/27/2021, 05:10 PM
© Reuters.

© Reuters.

* Consortium did not meet requirements - governor
* Cancellation setback for President's China policy
* China's CCCC among U.S. blacklisted firms
* China urges fair treatment for its companies

(Recasts, adds details, background throughout)
By Neil Jerome Morales and Karen Lema
MANILA, Jan 27 (Reuters) - A Philippine province has
cancelled a decision to award $10 billion airport project to a
consortium led by a Chinese state firm, dealing a blow to
President Rodrigo Duterte's infrastructure ambitions and to his
policy shift towards Beijing.
The consortium of China Communications Construction Co
(CCCC) 601800.SS and Philippine firm MacroAsia Corp MAC.PS
was the only bidder in the 2019 auction to help the Cavite
provincial government upgrade Sangley airport, in what would
have been one of the country's most expensive infrastructure
projects.
Cavite's governor Juanito Victor Remulla told Reuters on
Wednesday the consortium's documentation was "deficient in three
or four items".
"We saw it as a sign they were not fully committed," Remulla
said.
MacroAsia made the announcement on Wednesday. It said
earlier that coronavirus travel curbs had prevented the
consortium from providing necessary documents.
Its shares closed up 0.36% having earlier fallen as much as
19% over the cancellation.
China's CCCC did not respond to a request for comment.
Remulla said the decision was not related to a U.S.
sanctioning of CCCC and other Chinese state firms in August.
The United States has blacklisted numerous Chinese companies
over their roles in building military installations on submerged
reefs in disputed areas of the South China Sea, including one
within missile range of the Philippines.
The Philippine foreign minister had recommend projects
involving those firms be terminated. Duterte's office, however,
rejected that arguing their completion was in the national
interest. The collapse of the airport deal will be a setback for
Duterte, whose opponents say he has gambled with sovereignty and
bet heavily on China transforming the Philippines' outdated
infrastructure with billions of dollars of investment that has
largely not materialised.
Duterte, whose six-year term ends next year, has seen dozens
of projects under his "build, build, build" programme delayed,
cancelled or downsized.
He has been criticised for threatening to cut ties with old
ally the United States while heaping praise on China's
leadership and refusing to confront it over the conduct of its
navy and coastguard in the South China Sea.
His spokesman, Harry Roque, declined to comment on the
airport deal or the president's China policy.
The Sangley airport was one of two multi-billion airport
projects intended to take pressure off Manila airport.
Governor Remulla said in a Facebook (NASDAQ:FB) post that Cavite would
start new negotiations for a private sector partner.
Chinese foreign ministry spokesman Zhao Lijian was not aware
of the issue but said the government supported legal operations
of Chinese firms in the Philippines.
"We hope the Philippines can provide a conducive business
environment for Chinese companies," he said.

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