SC junks 2nd PIATCO motion; gov’t prepares for NAIA 3 takeover

The government is preparing to take over the operations of the Ninoy Aquino International Airport Terminal 3 (NAIA-3) following the Supreme Court (SC) decision junking the second motion for reconsideration by the Philippine International Air Terminals Co. Inc. (Piatco), the Office of the Solicitor General announced yesterday.

Solicitor General Alfredo Benipayo said they are also preparing to file criminal charges against Piatco officials.

Benipayo made the announcement after the SC issued a one-page en banc resolution on Feb. 17 which finally threw out Piatco’s appeal. The decision was only made public yesterday.

Benipayo said government officials who benefited from the Piatco deal will also be included in the criminal charges to be filed before the Office of the Ombudsman. Piatco officials, being private citizens, will be charged before the lower courts, he said.

Benipayo, however, said they are still gathering additional evidence to determine the appropriate charges to be filed against the respondents.

Benipayo said government lawyers will also seek remedial measures from the arbitration tribunals where Piatco earlier filed cases against the government.

Piatco and the German airport operator Fraport AG, which is part of the consortium, took their case before the International Chamber of Commerce and International Center for the Settlement of Investment Disputes at the World Bank, demanding compensation from the Philippine government for the construction of NAIA-3.

The cases are still pending, Benipayo added. "We don’t want to telegraph our punches," he said.

On Jan. 21, the SC had denied with finality Piatco’s appeal on the tribunal’s May 5 ruling that nullified all its contracts with the government in the construction and operation of the $650 million NAIA 3 project.

In a 46-page decision penned by Justice Reynato Puno, the court maintained the agreements between Piatco and the government is a violation of the Build-Operate-Transfer (BOT) Law and against public interest.

The court pointed out Piatco was not a qualified bidder in the first place as it failed to show its financial viability to undertake the project.

The SC also pointed out the agreements were "blatantly onerous" and lopsided in favor of the consortium as Piatco would be allowed to impose its own fees and charges as well the opportunity to monopolize airport operations in Luzon.

Since the airport facility was almost complete at the time the issue was being deliberated, the court said the government should also compensate Piatco as the builder if it would take over the airport operations.

The court stressed the compensation "must be just and in accordance with law and equity" as the government could not unjustly enrich itself at the expense of Piatco.

The high tribunal said the Constitution grants the State, in times of national emergency, the right to temporarily take over the operation of any business affected with public interest in the exercise of its police power.

The consortium that incorporated Piatco included People’s Air Cargo and Warehousing Co. Inc. (Paircargo), Philippine Air and Ground Services Inc. and Security Bank.

In its May 5 decision, the SC said Piatco should not include the entire net worth of Security Bank to reach the needed equity for the project estimated to cost at least $350 million or P9.18 billion.

The court junked all the five contracts entered into by the consortium with the government.

Among the junked contracts was the concession agreement signed on July 12, 1997 which gave Piatco the franchise to operate and maintain NAIA 3 for 25 years. The franchise may be renewed at the option of the government.