Taipan’s group offers to reimburse Piatco cost of NAIA-3 construction

A company owned by beer and tobacco tycoon Lucio Tan has offered to compensate Philippine International Air Terminals Co. Inc. (Piatco) for the cost it incurred in constructing the new Ninoy Aquino International Airport terminal in order to gain control over it.

Asia’s Emerging Dragon Corp. (AEDC) is asserting its right to operate the facility and has made the offer to help resolve the legal dispute between the government and Piatco over the terminal.

Piatco is asking for over $600 million in compensation after the government expropriated the terminal in December 2004 but the government is contesting the amount.

In a letter to Transportation and Communications Secretary Leandro Mendoza, AEDC lawyer Perfecto Yasay asked the government to resolve its legal dispute with Piatco, including AEDC’s claim to operate the terminal.

AEDC made an unsolicited offer to build and operate the terminal but it failed to match Piatco’s offer.

However, in 2002, the Supreme Court nullified Piatco’s "build-operate-transfer" contract because of provisions that the tribunal ruled were detrimental to the government.

"The construction of the terminal project by Piatco cannot deprive AEDC of its right to operate the (airport terminal) project. It merely created an obligation on the part of the ADEC to assume payment of just compensation once determined," Yasay said in his Sept. 1 letter to Mendoza.

AEDC also views the entry of Piatco’s new management, Manila Hotel Corp., into the consortium with "grave concern," Yasay said.

He said Manila Hotel Corp.’s buyout of Frankfurt airport operator Fraport AG’s stake in the consortium undermines AEDC’s right to operate the terminal, being the "legitimate and unchallenged bidder of the project."

"From all indications, the government has disregarded and ignored our client’s legitimate and valid claim by giving imprimatur to the Manila Hotel-Fraport deal," Yasay’s letter stated.

Manila Hotel Corp. gained control of Piatco after it bought the equities of Fraport as well as those of two other foreign partners of the consortium, which built the new terminal.

Fraport’s decision to accept Manila Hotel Corp.’s $200-million offer for its stake in Piatco effectively ends its dispute with its local partners in Piatco and with the government.