Piatco got new projects sans bidding, says MASO lawyer

The renegotiated Piatco contracts were actually two new public works projects awarded without bidding, seven airport-service companies whose live contracts would be revoked under the Piatco agreement said.

In a memorandum to the Supreme Court, the companies said the second and third supplements, signed in September 2000 and June 2001, were new contracts for new projects for the construction of the NAIA Terminal 3.

Lawyer Francis Lim, the airport service providers’ lead counsel, said Piatco’s amended concession agreement "was later substantially amended four times by mere negotiation, imposing new burdens and financial obligations on the government, which was also made to assume some of Piatco’s obligations."

The first supplement, signed by Piatco president Cheng Yong and then Transportation Secretary Vicente Rivera, gave the government additional financial burdens, including the construction of an access road connecting NAIA Terminals 2 and 3.

"This is actually an entirely new contract between the government and Piatco, the latter not as a concessionaire of NAIA Terminal 3 but as a public works contractor for the clearing, demolition or disposal of improvements and waste materials in the site, which obligations the government could not do," Lim said.

The third supplement, meanwhile, imposed more obligations on the government and entailed another public works contract, Lim said.

Documents sent to the Senate Blue Ribbon Committee showed that the government has already spent close to P900 million in projects related to NAIA Terminal 3, and is already shelling out some P2.5 billion more.

Records of the government’s transactions with Piatco show that because of the "supplements," the government has already been made to shoulder some P120.4 million on "subterranean" works for NAIA-3, P186.1 million on a "quality assurance inspector," P50 million in partial payment to displaced concessionaires and employees of Nayong Pilipino, P344 million on a road upgrade program, and P197 million on the EDSA-Tramo overpass.

Lim said the Piatco contracts are not valid since they substantially deviated from the bidding rules and terms and conditions that Piatco’s rival, Asia’s Emerging Dragon Corporation (AEDC), was measured against.

He said the contracts already violated the BOT law since they put a subtle clause that in effect gave Piatco a direct government guarantee.

Piatco, since getting the award in 1997, did not start work until 2000, spending the next three years to change instead the contract terms that governed the AEDC bid.

The Senate Blue Ribbon Committee said it was possible that Piatco gave its bid "in bad faith," with the intent to change the key portions of its proposal after getting the award.