OSG insists on junking Piatco deal

The government is firm on its decision to seek the nullification of the deal it struck with Philippine International Air Terminals Co. Inc. (Piatco) to operate Ninoy Aquino International Airport’s new Terminal 3, which the company had built.

Solicitor General Alfredo Benipayo said the government’s position on the issue is "non-negotiable" as he belied acting Government Corporate Counsel Manuel Teehankee’s earlier statement that a panel of government lawyers has been formed to discuss a possible settlement with Piatco.

"No such panel exists. The validity of the Piatco contract is something the government will not accede to. This contract is void, therefore, all the provisions contained in them, the arbitration clause included, are likewise void and have no legal effect," he said when asked by reporters to comment on Teehankee’s statement.

Benipayo added that while the government is amenable to sit down with Piatco, it will only do so if the company admits that the 1997 deal is "all void."

"If Piatco does not agree to these fundamental points, there can be no basis for arbitration or renegotiation. We can only discuss the consequences of the nullity of the contracts," he said.

Teehankee told reporters Monday that the government was not closing the door for a mediation or arbitration following the Supreme Court’s advice for both parties to try to arrive at an amicable settlement.

"We are also arranging with the Office of the Solicitor General and the lawyers of Piatco for a face-to-face, non-binding meeting for purposes of exploring any alternative remedy," he said.

Last month, the Supreme Court told Piatco’s feuding partners to settle their dispute before it can decide on a government petition asking the court to declare Piatco’s contract illegal.

The government says alleged onerous provisions were inserted in the deal after it was signed. That prompted President Arroyo in November to abandon the Piatco contract.

Malacañang wants the dispute over so the government and Piatco can start new negotiations on the fate of the airport’s new Terminal 3.

The Supreme Court said there were some issues that needed to be threshed out by the two feuding partners before it can make a decision. Piatco’s foreign partner, German firm Fraport AG, agreed with Mrs. Arroyo’s decision to abandon the contract.

Fraport AG has a 30 percent stake in Piatco.

Piatco denied the contract was anomalous. "This insidious campaign is nothing more than a smokescreen to divert attention from the people who should be charged with corruption for plotting to wrest control of NAIA 3 from its builder, Piatco," Piatco lawyer Francisco Chavez, a former solicitor general, said in a statement. – With Rey Arquiza