Manila: GMR Infrastructure Ltd of India and a Philippine-based partner submitted the highest bid for exclusive rights to operate and improve the Mactan-Cebu Airport on a resort island in central Philippines.

GMR and builder Megawide Construction Corp. bid 14.4 billion pesos ($326 million) for the 25-year concession at the nation’s second-busiest airport, according to a presentation shown during bidding at the transportation department on Thursday in Manila. The amount trumped offers from Changi Airports International Pte and Incheon International Airport Corp.

The country’s transportation department will announce a winner on 6 January after evaluating the bids, transportation undersecretary Jose Perpetuo Lotilla told reporters. President Benigno Aquino plans to more than double state spending on public works to 824 billion pesos by 2016, or about 5% of gross domestic product, a ratio the World Bank says is needed to cut poverty and strengthen the economy.

GMR and Megawide also gave one of the highest passenger- traffic forecast for the airport, Cosette Canilao, executive director of the government’s Public-Private Partnership Centre, told ABS-CBN News in a televised interview. They expect to earn more commercial revenue from it.

GMR and Megawide’s offer beat the second-highest bid from the group comprising Changi and Filinvest Development Corp.

The National Economic and Development Authority extended the concession period by another five years to 25 years to encourage more competitive bids, the transportation department said last month. It also lengthened the ban on competing airports in Cebu province, excluding the islands of Camotes and Bantayan, to 25 years from 10 years.

Mactan-Cebu Airport, the Philippines’ second-largest with an annual capacity of 4.5 million passengers, handled 6.7 million air travellers last year. The project, estimated to cost 17.5 billion pesos, involves building a new terminal that can accommodate 8 million passengers annually and renovating the existing one, according to a project brief.

Meanwhile, Reuters reported that GMR has hired four banks including Citigroup and JPMorgan to manage the listing of its airport business that is expected to raise $300-350 million, people with direct knowledge of the matter said.

The company, whose business interests include airport, power and roads, has also picked Axis Capital, a unit of private Indian lender Axis Bank Ltd, and IDFC for the initial public offering (IPO), three people involved in the process said.

All the sources declined to be identified as the IPO plans are not public yet. GMR, Citigroup, Axis Bank and IDFC declined to comment. JPMorgan did not respond to a request for comment.

GMR operates airports in New Delhi, Hyderabad and Istanbul in Turkey in partnership with other companies. The company owns majority stakes in both the Indian airport joint ventures.

The group founders and private equity investors, including Standard Chartered, will sell some of their shares in the IPO of the airport unit, expected in the second half of next year, said the people cited above. BLOOMBERG

Reuters contributed to this story.

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