German investors to return once NAIA-3 dispute over

German investors are expected to return to the Philippines once the controversial Fraport-PIATCO-NAIA Terminal 3 dispute is resolved, according to German Ambassador Dr. Axel Weishaupt.

Once the compensation issue is settled, Weishaupt said German firm Fraport A.G. might also drop the complaint it filed before the World Bank International Center for Settlement of Investment Disputes.

In a talk with reporters, Weishaupt expressed confidence that German investors would return to the Philippines, especially in the infrastructure sector, once Fraport is compensated for its investment in the Ninoy Aquino International Airport Terminal 3 project.

Fraport recently reached a deal with the Manila Hotel Group whereby the local hotel group agreed to compensate the German firm $200 million and take over its stake in the Philippine International Airport Terminal Co. (PIATCO).

According to Weishaupt, "we had a stalemate for a long time. From our point of view, if this is going to be solved the way they are trying to solve it, it would be very helpful."

However, Weishaupt stressed that Fraport must be compensated.

He emphasized that "what they want is the compensation. That is still the bottom line. Their main issue is the compensation."

Unfortunately, Weishaupt further revealed, the compensation amount is still being "debated."

According to Weishaupt, "I suppose it will be or has to be part of the deal. They get compensation so they drop the case. I suppose it’s logical. They cannot get compensation and fight on."

Weishaupt admitted, though, that once Fraport receives payment it is unlikely to invest in the Philippines anytime soon.

However, there is still one other complication. Asia’s Emerging Dragon Corp. (AEDC) legal counsel Perfecto Yasay said in a statement that the government could have rectified the mistake it made against his client by nullifying the PIATCO contract.

The government "messed up its chance to correct itself by committing a series of mistakes that further delayed the completion of the much-needed international passenger terminal and complicated its takeover and opening," Yasay said.

According to him, the government failed to appreciate the legal significance and consequences of the Supreme Court decision nullifying PIATCO’s contract with the government and ignoring the AEDC’s enforceable rights.

He said the voiding of the PIATCO contract virtually reinstated AEDC as the only legitimate grantee of the NAIA-3 terminal, a build-operate-transfer (BOT) project.

Yasay also said the government cannot bid out the operation of the international passenger terminal without reneging on its contractual obligations to the AEDC because the memorandum of agreement signed by AEDC and the Department of Transportation and Communications (DOTC) on Feb. 26, 1996 is still valid. — With Sandy Araneta